Commerce Commission’s continued focus on the health sector

Wednesday 20 August 2014

Authors: Jenny Stevens, Torrin Crowther and Glenn Shewan

​The Commerce Commission (the Commission) has launched a new website aimed at helping participants in the health sector better understand competition and consumer laws, including what they need to do to comply.

The website is the latest in a string of initiatives launched by the Commission as part of its "health advocacy project", which is aimed at lifting the understanding of competition and consumer laws in the health sector. This project was launched in late 2012 in response to concerns by the Commission regarding a lack of knowledge of competition laws by health professionals.

As part of the advocacy project the Commission undertook surveys with various health professional groups to assess knowledge of competition laws in late 2012/early 2013. The results of the surveys showed that while the majority of respondents were aware of the Commission's role, and the laws that it enforces, few were confident about how competition laws applied to them. The research showed that health professionals found it hard to identify possible price fixing arrangements.

The Commission subsequently voiced its concerns in its 2013-2016 Statement of Intent, making special mention of the risks that accompany the health sector’s shift towards greater collaboration resulting from more integrated models of care.

This new website should be seen as a positive and proactive step on the part of the Commission to address the concerns it has identified.

The website provides access to the following health sector specific fact sheets published by the Commission since November 2013.

  • How competition and consumer laws apply to the health sector – an overview of the relevant competition and consumer laws applicable to the health sector.

  • Offering credit to patients – explaining how the Credit Contracts and Consumer Finance Act applies in relation to health professionals who offer credit to patients.

  • Professional bodies – specifically aimed at explaining the application of the Commerce Act to members, officers and employees of professional health bodies.

  • Promoting your services – describing the application of the Fair Trading Act to the promotion of health professionals’ services.

  • Setting your fees – a specific explanation of when and how the Commerce Act will apply to the setting of fees.

The website also provides access to the Commission’s most recent health sector specific publication, Powerful purchasers. This new fact sheet explains how the rules in the Commerce Act against anti-competitive behaviour (such as price fixing) apply to particularly powerful purchasers of goods and services in the health sector, including discussion of their application to Crown agencies. The issues covered in this fact sheet arise frequently in practice, stemming particularly from the increased collaboration occurring in purchasing and the emphasis that health providers are putting on effective procurement programmes.

While this initiative should be welcomed by the health sector, and provides a useful body of reference documents for those seeking to understand New Zealand’s competition laws, the sector needs to continue to be on high alert for any potential competition law issues. Often when the Commission releases sector specific guidelines it also dedicates additional resources to monitoring and enforcement of the sector. We see the health sector as no different in this respect.

The Commerce Commission’s new website can be accessed here.


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • Jenny Stevens

    Partner Wellington
  • Torrin Crowther

    Partner Auckland
  • Glenn Shewan

    Senior Associate Auckland
Related areas of expertise
  • Competition
  • Health