Midwives, Medicos, Markets and Maternity Care: Can the Harper Review Reforms Tackle Anti-Competitive Behaviour in Australian Maternity Health Care?

Abstract

No industry has managed to successfully evade ‘root and branch’ competition scrutiny like the Australian health services sector, which operates on a bedrock of—to name a few—information asymmetry, influence of third-party payers, supplier-induced demand, allocative inefficiency and excessive regulation. In 2009, incumbents in the maternity healthcare segment of the sector faced an unprecedented challenge: competition in the form of privately practising midwives. The new entrants are a genuinely competitive threat, with the potential to innovatively disrupt poor quality services and high prices across both public and privately funded maternity services. Incumbent firms and their professional associations, emboldened by limited government stewardship and regulatory capture, responded with strategic anti-competitive behaviours aimed at raising rival’s costs and restricting competition, often in plain sight. This thesis examines the regulatory and structural framework that enables strategic anti-competitive behaviours against privately practising midwives and posits three hypotheticals of such behaviours for examination through the lens of competition law reforms introduced by the Australian Competition Policy Review Panel (Harper Review) in 2015. It is argued that, unlike the previous competition regime, the Harper Review reforms, specifically the new concerted practices and misuse of market power provisions, can be used to effectively address the anti-competitive conduct identified in the hypotheses. There are, however, two important caveats. First, regulators must move away from misplaced assumptions about the role of competition in maternity health care. Second, the courts must acknowledge the role strategic barriers to entry play in health services markets, where professional autonomy, regulation and infrastructure combine to favour incumbents. Such changes would not only benefit the maternity health sector but also likely the health sector as a whole.