The competition regulator intends to block Catholic Health Australia’s private hospital members from collectively boycotting large private health insurers, should negotiations for increased hospital funding arrangements fail. Source: The Australian.
The decision comes at a trying time for relations between private hospitals and insurers, with Healthscope recently breaking its contracts with Bupa and members of the Australian Health Services Alliance over their refusal to increase payments for hospital stays.
CHA, whose members operate 63 hospitals nationally, in July applied to the Australian Competition & Consumer Commission (ACCC) for the right to be able to “potentially engage in limited collective boycott conduct against only the five largest health insurers in Australia (by national market share)”.
CHA argued in a submission to the ACCC that shifts in the insurance and health markets have acted against its members’ interests, and it needed the ability to conduct boycotts as a negotiating tactic with the increasingly larger entities on the other side.
“Canon and civil law requirements typically make it difficult for Catholic hospitals and aged care facilities to merge their operations, as has occurred in the for-profit health sector,” CHA said in its submission.
“For-profit operators have been able to realise cost savings and efficiencies through a significant degree of consolidation.
“For Catholic hospitals and aged care facilities, in the absence of a full merger, and as a matter of financial viability, collaboration is essential for Catholic hospitals and aged care facilities to operate efficiently and effectively for the benefit of Australians.”
The ACCC disagreed with CHA that allowing boycotts would benefit consumers, and has disallowed the conduct in a draft determination released yesterday.
It was “not satisfied that there were likely public benefits arising from this conduct that would outweigh the likely public detriment”.
CHA is also seeking authorisation for its members to collectively negotiate with suppliers and engage in a collective boycott of large suppliers where negotiations fail, which the ACCC has said it will approve.
CHA said in a statement it welcomed the decision to allow it to collectively bargain with funders and suppliers.
FULL STORY
Catholic hospitals won’t be allowed to follow Healthscope down the boycott road (By Cameron England, The Australian)
