The Australian Competition and Consumer Commission (ACCC) has announced its draft decision to deny Catholic Health Australia’s (CHA) proposal to collectively boycott major private health insurers if funding negotiations break down.
CHA represents a large network of non-government hospitals, aged care facilities, and community health providers across Australia. These hospitals negotiate funding arrangements with private health insurers to determine the scope of benefits provided to their members. Other funding entities include aged care organisations, government agencies, and third-party payers.
The request to collectively boycott insurers targets major companies, including HCF, HBF, Medibank, Bupa, and nib. On the supplier side, the proposal applies to businesses with annual Australian revenue exceeding $5 million or global turnover above $10 million. This could include suppliers of pharmaceuticals, energy, pathology, and other medical goods and services.
The ACCC concluded that allowing such a boycott could cause more harm than good, outweighing any potential public benefits.
ACCC deputy chair Mick Keogh said that collective boycotts can create significant risks, including disruption to businesses targeted by the action and those involved in the boycott itself.
“In this case, we are concerned that the collective boycott could create disruption for health fund members seeking treatment in member private hospitals,” he said.
Despite this, the regulator has indicated support for CHA members to collectively negotiate funding agreements with private health insurers and other funding bodies.
CHA has also sought permission for its members to collectively negotiate with suppliers and, in some cases, boycott those suppliers if negotiations fail.
The ACCC has signalled approval for this aspect of the application, continuing an arrangement that has been authorised in various forms since 2014.
Keogh said that the potential risks tied to collective action against suppliers are mitigated by the scale and diversity of the affected companies, which often operate globally.
“Private hospitals and private health insurers rely on each other. 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,” he said.
Additionally, the ACCC has proposed allowing CHA members to share data for benchmarking purposes. All proposed authorisations, except for the private insurer boycott, would be granted for a 10-year period.
The ACCC is accepting submissions on its draft determination until Jan. 24, after which it will issue a final decision.
Details about the application, consultation process, and how to make a submission are available on the ACCC’s public register under Catholic Health Australia’s application.
