In 1995, the ambit of the Trade Practices Act was extended to cover all
the professions, including medicine. While most accepted they were running
businesses and should be treated as such for the purposes of the Act,
there has been resistance from some doctors and their lobby, the
Australian Medical Association. However, doctors and other health
professionals are not a special case. They are in business (as well as
being professionals) and while they have obligations under the Act not to
engage in anti-competitive practices they also have rights. The Act
protects them against the anti-competitive practices of others and their
access to facilities and hospitals. It protects them in dealings with
Walk into a doctor’s surgery and you will inevitably see a list of
charges on the wall, sometimes an additional amount if the consultation
extends beyond a fixed time. You are usually asked to pay on your way out.
No mistake, you have entered a business and this is understandable;
doctors have to earn incomes to support their families and pay their
There seems to be the impression among some in the medical profession
that a lack of competition is good for quality and service. The dubious
claim is that competition law interferes with doctor-patient relationships
and even prevents GPs forming out-of-hours rosters. Rosters are not a
breach of the Act and no court proceedings have been launched against
those establishing them. They increase the supply of medical services and
help prevent doctor fatigue. What does breach the Act is collusion between
competing doctors to collectively engage in anti-competitive practices.
Without the Act there would be nothing to stop all doctors in a country
town collectively boycotting bulk-billing or new no-gap arrangements.
It’s the role of the ACCC, in the health sector as elsewhere, to
ensure that businesses comply with the Act in the public interest and to
protect consumers. Vigorous enforcement of the law encourages businesses
to respond to what consumers want rather than doing cosy deals for their
own benefit or misusing their market power.
Informed consent is vital in the medical profession. Patients should
know the likely cost of medical treatment and particular treatments or
services recommended by their doctors. The ACCC is ready to pursue matters
where patients are not informed of costs or are misled by advertising.
Unfortunately, there remain concerns that some professionals fail to
appreciate the significance of costs in the provision of specialists care
and, in some cases, patients are not adequately informed about the
commercial or financial interests of medical practitioners in their
referrals to other specialists.
Some health fund advertising may have misled consumers about the real
costs of health insurance. Court proceedings have been launched by the
ACCC against several funds for allegedly misleading consumers about
In one case the ACCC alleged that Medibank Private promised customers
who switched from another fund that any waiting period would be waived and
they would get 30 days free. What was allegedly not disclosed was that
only the two-month general waiting period and the six-month optical
waiting period were waived and that conditions applied to the 30 free
days. The ACCC has also alleged that Medibank Private advertised “no
rate increase in 2000” in relation to its Package Plus insurance
products when the rates increased on 1 July 2000.
It has been alleged that pregnant women were misled by some insurers
about the waiting time for obstetric and pregnancy related services.
In a landmark judgment of December 2001 the Federal Court ordered the
AMA (WA branch) and two officers to pay penalties and costs totalling
$285,000 for price fixing and primary boycott breaches of the Trade
Practices Act relating to services by visiting doctors to patients at the
Joondalup Health Campus in Perth. In 1998, four anaesthetists servicing
four Sydney private hospitals and the Australian Society of Anaesthetists
gave undertakings to the Federal Court not to engage in price fixing for
the supply of on-call services.
In October 2002, the Federal Court found that three Rockhampton
obstetricians had breached the Act by collusion to collectively boycott
no-gap billing. As a result almost $97,000 will be repaid to affected
patients to refund the gap the patients were required to pay. The
Rockhampton conduct caused substantial harm for consumers. Families
expecting a new born can be under financial pressures and should not be
saddled with an additional unexpected bill.
The case further highlights the fact that medical practitioners are not
above the law and must resist pressure by others to engage in boycotts.
Contrary to AMA assertions, after-hours rosters were not a factor in the
The proposal that competition law is inconsistent with the ethical
obligations of doctors to patients does not stand up. Ethical obligations
are not about prescriptive rules and regulation nor complying with the
law. Ethics are really about achieving something much higher than the law
– it is about pursuing excellence. There is no conflict between a
professional’s ethical obligations and compliance with competition law
(the professional’s legal obligations).
It is possible for anti-competitive conduct to be authorised by the
ACCC as long as there is a net public benefit. The ACCC has granted
interim authorisation to GPs working within the same general practice to
agree on fees in certain circumstances.
Since 1995, when health professionals came under the Trade Practices
Act, the ACCC has made a concerted effort to bring them up to speed on
their rights and obligations under the Act. This includes many
consultations with medical organisations and the distribution of the
publication, A Guide to the Trade Practices Act of the Health Sector. The
ACCC will continue to work cooperatively with the health sector to
All sectors of the Australian economy, including taxpayers, have a
legitimate interest in health professionals competing fairly so they are
provided with better quality services at competitive prices. This would
bring us closer to the goal of an equitable, efficient and effective
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