The Australian Competition and Consumer Commission has authorised a network of Catholic health facilities to collectively bargain with health funds, the Repatriation Commission and other suppliers.
The ACCC has also allowed the health facilities to share certain types of information in aggregate form, such as data concerning a hospital's activities, efficiency and costs, for the purpose of benchmarking.
The arrangements, which are proposed by St Vincent's Health Australia Limited (formerly Sisters of Charity Health Services Limited), had previously been authorised by the ACCC until March 2009.
"The ACCC considers the proposed collective bargaining arrangements may result in transaction cost savings and lead to more efficient negotiation outcomes," ACCC Chairman, Mr Graeme Samuel, said. "The information sharing arrangements can facilitate efficiency improvements in the operation of a health facility."
However, the ACCC has not authorised the network to collectively decide not to deal with health funds, the Repatriation Commission and other suppliers if collective negotiations fail.
"Collective boycotts significantly increase the anti-competitive effects of collective bargaining," Mr Samuel said.
In its draft determination, the ACCC expressed concern about the potential harm from the proposed boycott arrangements to market participants, including health funds, the Repatriation Commission and consumers.
"The ACCC was particularly concerned that 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. No new information has come to light to suggest that the ACCC should take a different view in its final decision."
"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 arrangements put forward by St Vincent's Health Australia Limited are likely to generate sufficient benefit."
Authorisation provides protection from court action for conduct or arrangements that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Authorisation is granted where the ACCC is satisfied that the benefit to the public from the conduct outweighs any public detriment. A party to whom authorisation had been granted may also apply to the ACCC for a minor variation of that authorisation.
The ACCC's final determination will be available from the ACCC website.
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