The Australian Competition and Consumer Commission (ACCC) has released (19 December) a draft determination proposing to deny Catholic Health Australia (CHA) authorisation to collectively boycott major private health insurers in the event of failed funding negotiations. The ACCC raised concerns about potential disruptions to health fund members and broader public detriments outweighing any benefits.
While the ACCC recognised the pressures facing the private hospital sector post-pandemic, Deputy Chair Mick Keogh highlighted that collective boycotts could significantly harm both targeted businesses and participating hospitals.
“The private hospital sector and insurers are interdependent,” Mr. Keogh said. “A collective boycott risks creating disruptions for health fund members seeking treatment in these hospitals.”
Authorisation Granted for Other Activities
Despite rejecting the insurer boycott proposal, the ACCC is inclined to authorise CHA to:
- Collectively bargain with private health insurers and other funding organisations.
- Negotiate with suppliers and, in limited circumstances, collectively boycott those suppliers.
- Share data for benchmarking purposes.
The proposed authorisation for these activities would last for ten years, continuing a framework that has been in place since 2014.
The supplier boycott approval applies only to large suppliers with an Australian annual turnover exceeding $5 million or a global turnover over $10 million. According to Mr. Keogh, this limitation ensures that such conduct does not significantly harm competitive markets.
Public Consultation Open Until January
The ACCC is inviting submissions on its draft determination until 24 January 2025, with a final decision to follow.
More details about the application and submission process can be found on the ACCC public register.
Background
CHA represents a significant portion of non-government health facilities in Australia. Its members negotiate funding agreements with private health insurers and other entities such as aged care funders and government bodies.
The ACCC’s decision continues a longstanding precedent of balancing competition protections with the operational needs of CHA’s members. Since 2004, CHA and its affiliates have sought and received various authorisations for collective bargaining and limited boycotts under specific conditions.
This draft determination highlights the ACCC’s ongoing role in ensuring that collective actions align with public interest and do not unduly disrupt critical health services.
