The ACCC is proposing to deny authorisation for Catholic Health Australia’s private hospital members to collectively boycott large private health insurers when negotiations for hospital funding arrangements fail.
The ACCC is not satisfied that there are likely public benefits arising from this conduct that would outweigh the likely public detriment.
However, the ACCC proposes to grant authorisation for Catholic Health Australia members to collectively bargain hospital funding arrangements with private health insurers and other funding organisations.
“We recognise the challenges currently facing the private hospital sector, particularly in the aftermath of the COVID-19 pandemic,” ACCC Deputy Chair Mick Keogh said.
“However, collective boycotts have the potential to cause significant harm to not only the target business, but businesses participating in the boycott.”
“In this case, we are concerned that the collective boycott could create disruption for health fund members seeking treatment in member private hospitals,” Mr Keogh said.
Catholic Health Australia is also seeking authorisation for its members to collectively negotiate with suppliers and engage in a collective boycott of large suppliers where negotiations fail. The ACCC is proposing to grant authorisation for this aspect of the conduct, which has been authorised since 2014.
“Private hospitals and private health insurers rely on each other,” Mr Keogh said.
“However, in the case of suppliers of other goods and services, we consider that the size thresholds of targets and their broad international customer base mitigate any substantial detriment arising from that conduct.”
The ACCC is also proposing to authorise Catholic Health Australia’s members to share information for benchmarking purposes.
Authorisation, other than for the private health insurer boycott, is proposed to be granted for 10 years.
The ACCC is seeking submissions in response to the draft determination by 24 January 2025 before making its final decision.
More information about the application, the ACCC’s indicative timeline, and how to make a submission, is available on the ACCC’s public register at Catholic Health Australia.
Note to editors
ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act.
Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
The ACCC conducts a public consultation process to assist it to determine whether a proposed arrangement results in a net public benefit.
Background
Catholic Health Australia represents a large grouping of non-government health, community, and aged care facilities across Australia.
Private hospitals generally negotiate funding arrangements with private health insurers. These agreements determine the level of benefits that the insurer will pay for treatment provided at those hospitals to its members. Other funding organisations that hospitals negotiate funding arrangements with include aged care funders, government entities, the Repatriation Commission, and other third-party organisations.
Catholic Health Australia is seeking authorisation to collectively boycott HCF, HBF, Medibank, Bupa, and nib in the event that collective negotiations for funding arrangements fail.
The supplier boycott is limited to suppliers with an annual Australian turnover of $5 million or an annual global turnover of $10 million globally. This includes suppliers of goods and services such as medical and surgical supplies, pharmaceuticals and pharmacy services, banking, insurance, energy, and pathology.
The conduct has been authorised in various forms on three occasions since 2004.
In 2004, Sisters of Charity Health Service Limited was authorised to collectively negotiate with health funds and the Repatriation Commission, collective bargain, and boycott suppliers and to share data. Certain hospitals were permitted to engage in a collective boycott of health funds and the Repatriation Commission.
In 2009, St Vincent’s Health Australia was authorised to collectively bargain with health funds and the Repatriation Commission, collectively bargain with suppliers and share information. The ACCC did not grant authorisation for a collective boycott of suppliers or health funds and the Repatriation Commission.
In 2014, the ACCC granted authorisation to St Vincent’s Health Australia to collectively bargain with funding organisations and suppliers and share information. A collective boycott of certain suppliers was also authorised.