ACCC allows proposed merger of Launceston private hospitals

The Australian Competition and Consumer Commission has authorised* the proposed acquisition of St Vincent's Hospital Launceston by the Little Company of Mary Health Care Ltd, ACCC Chairman, Mr Graeme Samuel, said today.

St Vincent's Hospital is operated by the Sisters of Charity Health Service. LCMHC owns St Luke's Hospital, the other overnight private hospital in Launceston.

"The ACCC accepted that the proposed acquisition is likely to generate cost savings, in particular by substantially reducing duplication between St Luke's and St Vincent's", he said. "The ACCC was also confident that LCMHC is likely to use the cost savings to improve the range and quality of services available to private patients in northern Tasmania.

"The proposed acquisition will reduce the number of overnight private hospitals in Launceston from two to one. However, the ACCC accepted that the public detriment flowing from the proposed acquisition would be limited by the likelihood that, if it did not proceed, one private hospital in Launceston would close within two to five years. In the intervening period, the ACCC was satisfied that the countervailing power of health funds would be likely to limit any price rises sought by the merged hospital.

"In making its decision, the ACCC took into account a court-enforceable undertaking ensuring that the merged hospital will not be sold to a for-profit operator for a period of three years".

Little Company of Mary Health Care Ltd, a not-for-profit service of the Sisters of the Little Company of Mary, is a national, Catholic health and aged care services provider with services in five states and territories.

The determination will be available shortly.

Background

*The Trade Practices Act 1974 prohibits certain forms of anti-competitive conduct including mergers which substantially lessen competition. Authorisation provides immunity from court action under the Act for engaging in anti-competitive conduct. Authorisation may only be granted where the ACCC is satisfied that the public benefit arising from the conduct outweighs any public detriment.