The Australian Competition and Consumer Commission (ACCC) has instituted Federal Court proceedings against Ramsay Health Care, an ASX listed company running 70 hospitals and surgeries across Australia, claiming it promoted anti-competitive conduct by threatening surgeons who planned on opening a regional rival.
Ramsay Health Care operates the only private hospital and day surgery in
Coffs Harbour, NSW, a monopoly that would've been threatened if a group of
its surgeons were successful in their plans to open a rival.
The surgeons worked for Ramsey, at its Baringa Private Hospital and Coffs
Harbour Day Surgery, and developed plans to establish a competing private
day surgery throughout 2014 and 2015.
But court documents obtained by CHOICE claim senior staff – including the
hospital's chief executive, the NSW regional manager and the Australian
chief executive of Ramsay Health Care – intervened to snuff out the
prospect of competition.
The ACCC claims a strategy was developed and enacted over several months
between Malcolm Passmore, the NSW regional operations manager, and
Elizabeth Ruthnam, the chief executive officer of the Coffs Harbour
hospital and surgery, where Ruthnam would meet with individual surgeons in
an effort to deter their involvement in the competing surgery.
Three surgeons were allegedly threatened with having their operating
theatre time at the hospital "substantially reduced or entirely withdrawn" throughout the months of June to October, 2015.
A fourth surgeon was said to be given the same ultimatum by Daniel Sims, the chief
executive officer of Ramsay Health Care.
The surgeons gave into pressure in October 2015 by abandoning their plans
to start a private day surgery.
Patients will pay the price for Ramsay Health Care's anti-competitive
conduct, says Rod Sims, chair of the ACCC.
"Misuse of market power and other anti-competitive practices can cause
significant harm to consumers, other businesses, and the competitive
process more generally, which is why we believe this is an important case
for us to take.
"New independent day surgeries in other areas have increased competition,
reduced waiting lists and costs, delivered greater choice, and improved
access to surgical procedures. It is vital to ensure such competition is
not stamped out by established operators."
Ramsay Health Care released a statement to the ASX saying it takes its
obligations under Competition and Consumer law seriously.
"Ramsay intends to vigorously defend the matter," read the statement.
"As this matter is now before the court, Ramsay will not be making any
further comment on the allegations, other than as required to keep the
market informed in accordance with its continuous disclosure obligations."
Ramsay Health Care generated revenue of $8.7bn in the last financial
The ACCC is seeking pecuniary penalties, declarations, compliance program
orders and costs.