The recent fines incurred by four Palmerston North Eye Surgeons highlights the risks of co-operating with competitors when negotiating arrangements to supply goods or services. It also emphasises the current focus of the Commerce Commission on conduct in the health sector.
In 1998/99 MidCentral Health Limited (MCH) approached the four ophthalmologists to seek provision of eye services (in particular, 24 hour seven day on-call services which then could not be provided by the hospital).
The four ophthalmologists agreed among themselves that they would negotiate jointly and not separately with MCH. They agreed on prices and other terms on which they would supply publicly funded eye services to MCH. They then acted on this understanding by negotiating jointly with MCH. Negotiations culminated in the ophthalmologists entering into a contract to provide eye services at specified rates that applied to services supplied by each of them.
