The Australian Competition and Consumer Commission is inviting submissions in response to its draft determination proposing to allow prospective members of the Private Hospital Collective Bargaining Group to bargain collectively with suppliers and health funds.
The proposed authorisation would be subject to a condition limiting the size of the bargaining group, and it would also allow the hospitals to share certain information for benchmarking purposes.
"The ACCC considers that the collective bargaining is likely to result in cost savings and provide small private hospitals greater input into their contracts," ACCC chairman Rod Sims said.
"Performance benchmarking has the potential to improve the management or efficiency of participating private hospitals."
The PHCBG is newly formed and does not yet have any members, but the ACCC considers that these benefits are likely to occur once the PHCBG is established.
The proposed five year authorisation would provide prospective members of the PHCBG, private hospitals and groups of private hospitals with up to 200 beds, statutory protection to negotiate as a collective with health funds and medical and non-medical suppliers. The authorisation would also protect the PHCBG for sharing information about processes and procedures for the purpose of benchmarking.
The ACCC has noted the concerns raised by some health funds and suppliers about the potential size of the PHCBG. The ACCC proposes placing a condition limiting the size of the bargaining group to 50 hospitals with no more than ten hospitals in any one state or territory.
The ACCC's preliminary view is that this will increase the likelihood that the arrangement will result in an overall benefit and it invites comments from interested parties on the appropriateness and effectiveness of such a condition.
Authorisation does not represent ACCC endorsement of a group or scheme. Rather, it provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
The ACCC is seeking submissions from stakeholders and interested parties on the draft determination. The draft determination is available from the ACCC's website at: www.accc.gov.au/AuthorisationsRegister