ACCC institutes proceedings against Calvary Hospitals

10 December 2014

The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against Little Company of Mary Health Care Limited and its subsidiary Calvary Health Care Riverina Limited (together, Calvary) for imposing by-laws regulating the use of Calvary medical facilities by medical practitioners, which the ACCC alleges had the purpose of substantially lessening competition.

To use Calvary medical facilities, a medical practitioner enters into a contract with Calvary granting them rights to use Calvary medical facilities. In March 2011, Calvary introduced a new set of by-laws that governed the conduct of medical practitioners who wish to use Calvary’s medical facilities. The by-laws included provisions that allowed Calvary to refuse to grant, or to revoke, the right of a medical practitioner to use its facilities if the medical practitioner had become involved in the operation of a business in competition with Calvary.

The ACCC alleges that, by granting medical practitioners the right to use its medical facilities subject to these by-laws, Calvary entered into contracts with the medical practitioners which had the purpose of substantially lessening competition in day surgery markets, particularly in Wagga Wagga, in contravention of the Competition and Consumer Act 2010.

“In recent years there has been an increase in the establishment of independent day surgeries. It is not uncommon for these day surgeries to be run by medical practitioners who also treat patients at other medical facilities,” ACCC Chairman Rod Sims said.

“The ACCC is concerned that by-laws or contractual conditions of this kind applied by a significant national health care organisation could prevent the establishment of new day surgeries. The consequence of this would be to limit the availability of day surgery procedures to consumers.”

The ACCC is seeking pecuniary penalties, declarations and costs.

The matter is listed for a directions hearing in Sydney at on 4 February 2015 at 9.30am  before Justice Foster.

Medical practitioners that are surgeons will generally have rights to use multiple medical facilities including hospitals and day surgeries. This allows increased access for consumers to surgical procedures. Where medical practitioners are involved in the operation of a medical facility they may also still treat consumers at other medical facilities.

Calvary is a national healthcare organisation. It operates 10 private hospitals and a range of other medical facilities across Australia. In addition to its medical facilities, it operates a number of retirement and social welfare facilities and services.

Release number: 
MR 304/14
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