General Superintendence suggests condemnation of a cartel in the market of hospital services in four Brazilian States

The General Superintendence of the Administrative Council for Economic Defense – CADE recommended, through an Official Opinion published on September 25th the condemnation of 23 hospitals and healthcare centers for the practice of cartel in the market of hospital services in the states of Paraná, Paraíba, Bahia, and Espírito Santo.

The Superintendence also suggested the condemnation of four representative bodies – two in Paraíba and two in Bahia – for having influenced the practice of collusion between its members.

According to the investigations, the hospitals and healthcare centers tried to negotiate with health insurance companies to charge higher prices for hospital services in these localities. If these companies decided not to accept the increases claimed, the hospitals, healthcare centers and health insurance companies would revoke their credentials.

The Superintendence understood that the negotiation and the joint assignment of prices and other conditions by the health institutions being investigated characterize the practice of cartel. The consumers were being harmed by a lack of healthcare – provoked by the simultaneous’ credentials annulment of various health services; and also by the increase of the service costs – due to the transfer of the price increases to customers by the health insurance companies.

In Londrina, four medical establishments were accused of imposing price increase of services to “Caixa de Assistência, Aposentadoria e Pensões dos Servidores Municipais de Londrina – CAAPSML” and also of threatening and, afterwards, revoking credentials of the services from the health insurance. The administrative proceeding no. 08012.007033/2006-57 was established based on the complaint of Consumer Protection Office of Paraná.

In Paraíba, the administrative proceeding n. 08012.001020/2003-21 also started with denouncement of Consumer Protection Office of Campina Grande against eight hospitals and health centers located in the city. Besides the collective bargaining, the institutions boycotted the health insurance companies in the municipality. It was verified that the State of Paraná’s Association of Hospitals and the State of Paraíba’s Union of Healthcare Centers influenced the practice of those conducts by its members.

The administrative proceeding n. 08012.000377/2004-73 also investigated negotiations and boycotts against health insurance plans by eight institutes of the city of Feira de Santana, in Bahia. The companies were supported by the State of Bahia’s Association of Hospitals and Health Services and the State of Bahia’s Union of Hospitals and Health Services. The case started being investigated with the complaints of Bahia’s Public Ministry, Norclínicas, Sul América Saúde S/A and União Nacional das Instituições de Autogestão em Saúde – Unidas. CADE’s General Superintendence suggested the condemnation of the hospital units and the representative bodies.

In Vitória, three healthcare centers were accused of imposing prices and homogeneous conditions on contracts with health insurance companies. They were denounced for revoking credentials of customers from diverse providers. The administrative proceeding n. 08012.005004/2004-99 was established based on a claim from Unidas.

The cases now proceed to judgment by CADE’s Tribunal, responsible for the final decision. If condemned, the investigated parties are subject to payment of a fine, along with other penalties prescribed by law.