Thursday, 06 June 2024 18:16

Icon Group's proposed lease acquisitions raise concerns for competition regulator Featured

By Gordon Peters

The ACCC has published a Statement of Issues outlining its preliminary competition concerns with Icon Group’s proposed acquisitions of leases at St Andrew’s Ipswich Private Hospital in Queensland, St Vincent’s Private Hospital Northside in Chermside, Queensland and St John of God Geelong Hospital in Victoria.

The Australian Competition and Consumer Commission watchdog says Icon is one of the largest providers of radiation oncology services and cancer care services across Australia, and the two largest providers, Icon and Genesis Care operate 94 per cent of all private radiation clinics in Australia.

The next largest private radiation oncology provider, Cancer Care Associates, operates four clinics in New South Wales.  

“We are concerned that the proposed acquisition will entrench Icon’s already strong market position, which may increase its ability to raise the prices it charges or reduce the level of service it provides patients” ACCC Commissioner Stephen Ridgeway said.

The ACCC says it considers that these proposed lease acquisitions could impact the supply of radiation oncology services in the greater Geelong and Brisbane areas, and it is also considering the impact in one or more markets within broader geographic regions, such as south-east Queensland.

“We are concerned that Icon’s plans to enter into new lease arrangements in South-East Queensland and Geelong may increase barriers to entry or expansion for new and existing providers,” Commissioner Ridgeway said.

“There are a limited number of relevant specialists in Australia and Icon’s expansion may restrict its competitors’ ability to attract and retain radiation specialists in these regions.”

The ACCC also notes that there are currently no providers of radiation oncology services in Ipswich and the nearest facility is approximately a 30-minute drive away - while in Geelong, there is only one other private radiation oncology clinic, which is also operated by Icon.

“There are currently six private radiation oncology clinics in the Brisbane area, of which Icon operates four and two are operated by GenesisCare,” the ACCC says, adding that it understands that “the decision to open a new radiation oncology facility will depend on factors including expected patient demand and available specialists and other medical staff in the relevant region”.

“An acquisition enabling Icon to expand its radiation oncology services is concerning if it insulates Icon from competition” Commissioner Ridgeway said. 

“A key issue for the ACCC is the extent to which radiation oncology providers may experience economies of scale and scope in the relevant geographic areas. This could include economies of scale associated with increased utilisation of specialists and staff as well as equipment at, or between, clinics,” the Commission said.

“The ACCC is considering whether Icon’s proposed lease acquisitions at Chermside and Ipswich would increase the economies of scale and scope for Icon in the south-east Queensland area and the extent to which this could have an anti-competitive effect,” the ACCC concluded.

The ACCC has invited submissions from market participants on the issues identified in the Statement of Issues and on any other issue that “may be relevant to the ACCC's assessment of this matter”.

Submissions should be emailed to mergers@accc.gov.au by 20 June 2024.

The Statement of Issues and more information is available on the public register:

The ACCC decided to not oppose the Icon Group’s proposed joint venture with Cyberknife Australia Pty Ltd on 22 May 2024.

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