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Australian Health Insurance Association. “ The ACCC View of Key Competition Issues Impacting on Private Health” Presented By John Martin Commissioner Australian Competition & Consumer Commission 10 th November 2005 Melbourne.

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australian health insurance association
Australian Health Insurance Association

“The ACCC View of Key Competition Issues Impacting on Private Health”

Presented By

John Martin

Commissioner

Australian Competition & Consumer Commission

10th November 2005

Melbourne

the accc view of key competition issues impacting on private health
“The ACCC View of Key Competition Issues Impacting on Private Health”
  • How ACCC Operates
  • Application Of TPA To Health Sector
  • Monitoring Report To Senate
  • Broad Areas Of Concern
  • Specific Issues
  • Mergers & Authorisations
  • Recent Health Mergers
  • How Mergers Are Assessed
  • Going Forward
how accc operates
How ACCC Operates
  • Independent Agency
      • 7 Commissioners
      • Range of Skills
      • Operates Like Board
      • Committee Structure
  • 500 Plus Staff
      • Decentralised
  • Key Role Via TPA
      • Anti Competitive Conduct
      • Misleading, Deceptive Trading Practices
      • Unconscionable Conduct
  • Complaints Driven
      • Proactive As Patterns Emerge
  • Strong Investigation & Evidence Gathering Powers
      • Emphasis On Compliance & Avoidance Of Problems
application of tpa to health sector
Application Of TPA To Health Sector
  • TPA To Enhance Welfare Of Australians
      • Promotion Of Competition & Fair Trading
  • All Health Business Subject To Competition Provisions Of TPA
      • Unincorporated Subject To State Fair Trading Acts
  • Health Insurance Technically ASIC
      • Since 1998 Legislative Changes
      • But ASIC Delegate To ACCC
      • Health Services Rather Than Financial Services
  • ACCC Ensure Health Funds Do Not Mislead
      • About Premiums or Conditions
monitoring reports to senate
Monitoring Reports To Senate
  • Certain Sectors Subject of Formal Monitoring
      • In Some Cases Pricing Approval (eg. Australia Post)
      • Other Sectors Monitoring & Reporting
  • ACCC Reports To Senate Since 1999 On
      • Anti Competitive Or Other Practices
      • By Health Funds Or Providers
      • To Detriment Of Consumers
  • Originally 6 Monthly Now Annual
      • Report Drawn From Internal Material & Submissions
  • ACCC Contacts Over 100 Interested Parties
  • Latest Monitoring Review
      • 23 Submissions
      • Including 5 From Health Funds
areas of concern
Areas Of Concern
  • ACCC Only One Of A Number Of Regulators
      • Also Ombudsman & State Health
  • Spike In Approaches To ACCC Over Past Year
      • Medical Info Kit
  • Over 11,000 Info Kits Distributed
      • 400 Extra Inquiries
  • Overall Complaints To ACCC Flat In 2004
      • 774 Health Complaints In 2003-04
      • Of Which 143 Related To Health Funds
  • Main Complaint Area Against Health Funds
      • Advertising Or Statements By Staff
      • Premium Increases Or Benefit Changes Or Notice There Of
      • Suspected Arrangements Between Competitors
      • Providers Not Having HPPAs With Certain Funds
specific issues
Specific Issues
  • Key Features Guide
  • Exclusions & Restrictions
  • Intermediaries
  • Portability
  • Contracts Between Hospitals & Health Funds
  • Purchaser Provider Negotiation Code Of Conduct
mergers authorisations
Mergers & Authorisations
  • Prohibition On Mergers That Substantially Lessen Competition
  • Merger Requests Generally Informal Clearance Process
      • Most Do Not Raise Concerns
  • Where Concerns Exist
      • Either Do Not Proceed
      • Or Acquirer Offers Conditions Eg. Divestment
  • Where Acquirer Persists Despite ACCC Opposition
      • Resolved In Court
  • Alternative Avenue Is ACCC “Authorisation” Of Merger
      • Where Acquirer Seeks To Demonstrate Public Benefit Outweighs Detriment
  • Note new Legislation To Change Process
recent health mergers
Recent Health Mergers
  • 3 Hospital Mergers 2005
  • Ramsay Acquisition Of Affinity
      • Undertaking By Ramsay To Sell 19 Hospitals
  • Health Scope Acquisition 14 Of Ramsay Merger Hospitals
      • Ramsay In Sale Process For Other 5
  • Earlier In Year Authorisation For Little Company Of Mary
      • Owner Of St Lukes Launceston
      • Acquired Other Launceston Private Hospital
how mergers are assessed
How Mergers Are Assessed
  • Hospital Mergers Inherently Complex
      • Due To Health System Complexity
  • Assessment Focus On Local Markets
      • Patients Tend To Use Local Facilities
      • Supply Of Hospital Services To Health Funds
      • Collectively Negotiate On Behalf Of Members
  • Spotlight On Health Fund – Hospital Markets Shows
      • Price & Consumer Choice Issues
      • Based On Market Power Of Merged Hospital
  • Ramsay Merger Case Study
      • 3 markets Price Rises could Not Be Resisted
      • Example Of Gosford
  • Authorisation Alternative
      • Improved Prices Or Quality Of Service
  • Medibank Private Sale Issue
going forward
Going Forward
  • ACCC Role Permeates Health Sector
      • Given Important Of Health Services
      • To Consumer Interests
  • Regret Timing Because Unable To Brief On Latest Senate Report
      • Unlikely To Be Surprised
  • Continuing Issues In Some Areas
      • Improvements In Other
  • Mooted Medibank Private Sale Issue For Future
  • Titillating Note To Finish
  • Welcome Comments & Questions
contacting the accc
Contacting the ACCC

ACCC

PO Box 1199

Dickson ACT 2602

Information Centre: 1300 302 502

http://www.accc.gov.au

Happy to Answer Questions