The Australian Competition and Consumer Commission proposes to authorise* a network of Catholic health facilities to collectively bargain with health funds, the Repatriation Commission and other suppliers, ACCC Chairman, Mr Graeme Samuel, said today.
The ACCC also proposes to allow the facilities to share certain information, such as data concerning a hospital's activities, efficiency and costs, for the purpose of benchmarking.
The arrangements, proposed by the Sisters of Charity Health Services Limited, had previously been authorised by the ACCC until March 2009.
The ACCC considers that the proposed collective bargaining arrangements may result in transaction cost savings and lead to more efficient negotiation outcomes. The information sharing arrangements can help efficiency improvements in a health facility.
However, the ACCC does not propose to allow the network to collectively decide not to deal with health funds and the Repatriation Commission if collective negotiations fail.
"Collective boycotts significantly increase the anti-competitive effects of collective bargaining," Mr Samuel said. "The ACCC is concerned about the potential harm to market participants, including health funds, the Repatriation Commission and consumers. The proposed collective boycott arrangements have the potential to disrupt the availability of private hospitals to health fund members and result in higher health insurance premiums.
"Parties seeking authorisation for collective boycott proposals should be aware that substantial public benefits are necessary in order to outweigh the considerable anti-competitive detriment associated with boycotts," Mr Samuel said. "In this instance, the ACCC is not satisfied that the collective boycott arrangement put forward is likely to generate sufficient benefit."
The ACCC's draft determination will be available from the ACCC website, through Public Registers, then Authorisations & notifications register, Authorisations register.
The ACCC seeks submissions from interested parties in relation to its draft determination.
Submissions can be made to: The General Manager, Adjudication Branch, Australian Competition and Consumer Commission, GPO Box 3131 Canberra ACT 2602 or lodged by email to adjudication@accc.gov.au.
For media inquiries to the ACCC Chairman, Mr Graeme Samuel, please call Ms Lin Enright, ACCC Media, on (02) 6243 1108 or 0414 613 520.
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