Healthe Care Australia Pty Ltd - proposed acquisition of Brisbane Waters Private Hospital

Acquirer(s)

  • Healthe Care Australia Pty Ltd

Target(s)

  • Brisbane Waters Private Hospital

Summary

Healthe Care Pty Ltd proposed to acquire Brisbane Waters Private Hospital from Healthscope Limited.

Market definition

The ACCC considered the proposed acquisition in the context of markets for the supply of:

- Private hospital services (encompassing general medical and surgical services) to patients in the New South Wales Central Coast area. The ACCC's review considered a range of high and sub-acute surgical procedures and focussed on the geographic areas of Woy Woy, Gosford and Berkeley Vale, however the ACCC did not consider it necessary to form a concluded view on the scope of this market; and

- Private hospital services to health funds and the Repatriation Commission. The ACCC did not consider it necessary to form a concluded view on the geographic scope of this market, but noted that there are national, state-based and local elements to competition in this market.

Competition analysis

The ACCC concluded that the proposed acquisition was unlikely to substantially lessen competition in any relevant market.

The proposed acquisition would result in Healthe Care owning two of the three private hospitals in the Central Coast of New South Wales with Ramsay Health Care owning the third, Berkeley Vale Private Hospital.

Healthe Care previously proposed to acquire the Brisbane Waters Private Hospital in 2006. Following a public review, the ACCC announced it would oppose the proposed acquisition. The ACCC's decision was made on information which indicated that Healthscope's Brisbane Waters Private Hospital and Healthe Care's Gosford Private Hospital competed closely with each other to attract the services and referrals of medical specialists in the relevant market. At the time of the ACCC's review in 2006, Brisbane Waters Private Hospital had a reputation as the leading cardiac hospital in the region and provided a range of high-acuity surgical procedures as well as an intensive care unit.

For the purpose of the 2014 review, the ACCC found that the service offering of the Brisbane Waters Private Hospital had changed in recent years such that it had a significantly differentiated service offering to Healthe Care's Gosford Private Hospital. Brisbane Waters Private Hospital closed its intensive care unit in 2012 and ceased offering high acuity surgical services, instead expanding its mental health offering while continuing to provide low acuity surgical services and general medical services, particularly for geriatric patients.

On the basis of information provided by the merger parties and other industry participants, the ACCC considered that the Brisbane Waters Private Hospital was no longer a close competitor to Healthe Care's Gosford Private Hospital.

The ACCC also considered it highly unlikely that Brisbane Waters Private Hospital would compete closely with Gosford Private in the future. The ACCC considered there were substantial barriers to Healthscope, or an alternative acquirer of the Brisbane Waters Private Hospital, from recommencing an intensive care unit or high-acuity surgery offering at that hospital in the foreseeable future absent the proposed acquisition. The ACCC therefore concluded that competition in the counterfactual was unlikely to be significantly different compared to the factual.

The ACCC also concluded that the proposed acquisition of the Brisbane Waters Private Hospital would be unlikely to materially alter Healthe Care's ability to negotiate rate increases with health funds and the Repatriation Commission.

Timeline

DateEvent
06/12/2013ACCC commenced review under the Merger Process Guidelines.
10/01/2014Closing date for submissions from interested parties. ACCC assessing information provided during market inquiries and consulting with merger parties on any relevant issues or concerns arising.
04/02/2014Former proposed decision date of 6 February 2014 delayed pending receipt of further information from the merger parties.
10/04/2014ACCC received further information from the merger parties.
16/04/2014ACCC announced it would not oppose the proposed acquisition.