ACCC to oppose aquisition of Australian Hospital Care by Mayne Nickless

The Australian Competition and Consumer Commission will oppose Mayne Nickless's bid for Australian Hospital Care, Acting ACCC Chairman, Mr Rod Shogren, said today.

"Mayne Nickless and Australian Hospital Care are the two largest for-profit private hospital providers in Australia.

"The acquisition is likely to result in a substantial lessening of competition in Melbourne and on the Gold Coast in various markets relating to the provision of private hospital services. The impact of the acquisition could well be an increase in prices and/or a reduction in service quality".

The ACCC has conducted extensive inquiries and found widespread concern among market participants in relation to the merged entity's position on the Gold Coast and in Melbourne.

After the acquisition, patients, doctors and health funds would have practically no choice in the Gold Coast and in some parts of Melbourne. As a result, Mayne Nickless would not have to compete as vigorously.

"Currently Australian Hospital Care is the only competitor that is able to match Mayne Nickless's capacity and network across Melbourne".

Due to its strong position, it is likely that Mayne Nickless would be able to negotiate increased prices with the health funds after the proposed acquisition. Higher prices to health funds are likely to translate into increased health insurance premiums for consumers.

The ACCC is also concerned about the impact of the acquisition on the quality of service provided by hospitals. Competition between private hospitals ensures improvements in patient services and investment in new medical technology.

"The number of people with private health insurance has increased enormously in the past 12 months as a result of recent reforms in the industry. These people deserve a competitive private hospital sector. They should not be limited in their choice of hospital providers", Mr Shogren said.