On 25 August 2011, the ACCC issued a final determination granting authorisation for a management services agreement between two private health funds, the Reserve Bank Health Society (“RBHS”) and Lysaght Peoplecare Limited.  RBHS is the smallest private health fund in Australia and is restricted to offering private health care insurance to current and former employees of the RBA, Note Printing Australia and their dependents.  Due to these restrictions, RBHS is unable to match the economies of scale of other private health insurers.   Under the agreement Peoplecare will provide RBHS with services relating to operational matters, such as marketing, product development, hospital contract management and governance, to allow RBHS to improve the services it offers to members.

The information flow between RBHS and Peoplecare, and Peoplecare’s role in advising the RBHS Board on premiums and benefits, could potentially contravene the cartel provisions under the CCA.  The ACCC considered that the arrangement would allow RBHS to pass cost efficiencies through to consumers in the form of lower premiums and increased access to services.  Both funds are small participants in the industry and will have little ability or incentive to coordinate their conduct beyond the scope of the management services agreement.  As a result, the benefits from the agreement are likely to outweigh any public detriment.  The ACCC’s authorisation will provide the parties with immunity from legal action under the CCA and will last for 10 years.