The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against Ramsay Health Care Australia Pty Limited (Ramsay) for alleged anti-competitive conduct involving misuse of market power and exclusive dealing in the Coffs Harbour region.
Ramsay operates Baringa Private Hospital and the Coffs Harbour Day Surgery, the only private hospital and private day surgery facilities in the Coffs Harbour region. Coffs Harbour surgeons use operating theatres at Ramsay’s facilities to perform surgical procedures on private patients.
The ACCC alleges Ramsay became aware that a group of Coffs Harbour surgeons were planning to establish a competing private day surgery facility in Coffs Harbour. In response to this competitive threat, the ACCC alleges senior Ramsay executives told these surgeons that if they were involved with the proposed new day surgery they would have their access to operating theatre time at Baringa Hospital substantially reduced or withdrawn.
The ACCC alleges that Ramsay engaged in this conduct for the purpose of deterring or preventing a new entrant in the day surgery market in Coffs Harbour, or substantially lessening competition in that market.
“The ACCC alleges that Ramsay sought to preserve its position in day surgery services in the Coffs Harbour region by making threats to reduce or withdraw individual surgeons’ access to operating theatres at Baringa Hospital if they were involved in a competing day surgery facility. It is alleged that the surgeons suspended their plans to establish a competing day surgery facility as a result of these threats,” ACCC Chairman Rod Sims said.
“New independent day surgeries in other areas have increased competition, reduced waiting lists and costs, delivered greater choice, and improved access to surgical procedures. It is vital to ensure such competition is not stamped out by established operators.”
“Misuse of market power and other anti-competitive practices can cause significant harm to consumers, other businesses, and the competitive process more generally, which is why we believe this is an important case for us to take,” Mr Sims said.
The ACCC is seeking pecuniary penalties, declarations, compliance program orders, and costs.
Background
Ramsay is wholly owned by Ramsay Health Care Limited which is an ASX-listed global healthcare provider with reported revenue of $8.7 billion for the last financial year. It is Australia’s largest private hospital operator with about 70 hospitals and day surgeries nationwide. Each year, Ramsay facilities in Australia admit almost one million patients and account for more than half a million procedures.
The ACCC has previously taken action in relation to exclusive dealing conduct in this sector. In October 2015, the Federal Court declared that Little Company of Mary Health Care Ltd (LCMHC) and Calvary Health Care Riverina Ltd (Calvary Riverina) had engaged in exclusive dealing conduct that was likely to have an anti-competitive effect in the supply of day surgery services in Wagga Wagga.