The Australian Competition and Consumer Commission has granted conditional authorisation to a proposal for public and one private health service in Melbourne and Geelong to jointly tender for agency nursing services, ACCC Chairman, Professor Allan Fels, said today.
The authorisation granted by the ACCC follows an application by Health Purchasing Victoria. At the time it was lodged, the application was primarily aimed at limiting the rising cost of agency nurses resulting from the general nursing shortage. However, on 1 March 2002, the Department of Human Services chose to address this issue by issuing a direction to public health services under the Health Services Act 1988 capping the rate at which they can pay agency nurses and limiting the instances in which agency nurses can be employed to unexpected absences of permanent staff.
"The ACCC was not required under the authorisation process to assess whether the DHS direction generates a benefit to the public outweighing any detriment to the public", Professor Fels said. "The ACCC has no view on this matter. The ACCC has assessed the likely benefits and effects on competition of the proposed tender process, given that the DHS direction is in place.
"As would be expected in the context where this direction is in place, the ACCC considered the separate impact of the collective tender process to be minimal. In particular, the ACCC considered that there is unlikely to be a significant reduction in agency nurses' remuneration from the collective tender process in addition to any reduction achieved by the price cap in the DHS direction. The ACCC considered that the proposed arrangements will generate administrative cost savings allowing more funds to be devoted to improving patient care.
"The ACCC has imposed certain conditions requiring HPV to amended clauses of the tender documents which form the basis of the contractual arrangements which HPV and successful tenderers will enter into. While these conditions clarify the intent and effect of the tender arrangements and ensure a net public benefit will result, they do not change the nature of the arrangements for which authorisation was sought.
"The ACCC has therefore concluded that, subject to these conditions, the public benefits likely to result from the proposed tender process, while small, outweigh any anti-competitive detriment that may arise. Accordingly, the ACCC has granted authorisation to the proposed arrangements".
The final determination can be found on the ACCC website.