The nation’s largest private hospital company, Ramsay Health Care, and specifically its Australian chief executive, stand accused of threatening doctors after they moved to set up a competing clinic.
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The Australian Competition and Consumer Commission on Monday launched federal court action against Ramsay claiming the ASX-listed company, which had revenue of $8.7 billion last year, had heavied local surgeons at Coffs Harbour who were considering opening their own clinic.
It also claims that the company’s Australian chief executive, Daniel Sims, was personally involved in warning at least one doctor not to be involved in the clinic or risk a backlash.
Ramsay Health Care says it has co-operated with the ACCC in its investigation. Photo: Bloomberg
Ramsay operates the only private hospital and private day surgery facilities in the Coffs Harbour region, and local specialists use those operating theatres to perform surgical procedures on private patients.
The ACCC alleges Ramsay moved after it became aware that local surgeons were planning to establish a competing day facility.
“The ACCC alleges that Ramsay sought to preserve its position in day surgery services in the Coffs Harbour region by making threats to reduce or withdraw individual surgeons’ access to operating theatres at Baringa Hospital,” ACCC chairman Rod Sims said in a statement on Monday.
“It is alleged that the surgeons suspended their plans to establish a competing day surgery facility as a result of these threats.”
Ramsay released a statement to the ASX saying that it took its obligations seriously and had co-operated with the ACCC in its investigation.
“Ramsay intends to vigorously defend the matter,” it says.
Court documents show that the ACCC alleges Ramsay’s regional manager Malcolm Passmore and Baringa chief executive Elizabeth Ruthnam devised a strategy to convince the surgeons not to go ahead.
“Mrs Ruthnam implemented that strategy by meeting with individual surgeons … and informing four surgeons who operated in Coffs Habour that if they were involved with the proposed new day surgery they would have their access to operating theatre time at Baringa substantially reduced or entirely withdrawn.”
The ACCC’s statement of claim also alleges that Mr Sims”also informed one of these surgeons that if he was involved with proposed new day surgery he would not be permitted to operate at Baringa”.
Ramsay declined to comment on the role of its senior executive beyond its ASX statement.
The ACCC claim says the surgeons felt the threats were credible and abandoned their plans.
Mr Sims said the ACCC was taking action against Ramsay because misuse of market power and other anti-competitive practices could cause significant harm to consumers and other businesses.
“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,” he said.
The ACCC is seeking penalties, declarations, compliance orders and costs.
Shares in Ramsay Health Care dropped $1 (1.39 per cent) to $70.70 yesterday.