In its consideration of the latest in a string of authorisation applications made in the medical industry to collectively bargain on fee arrangements, the ACCC has proposed not to authorise fee arrangements by ophthalmologists.  In doing so, the ACCC has made it clear that in order to be granted authorisation to collectively bargain, a clear public benefit must be shown.

A draft decision not to grant authorisation to members of the Australian Society of Ophthalmologists (ASO) was released on 20 June 2013. The ACCC’s preliminary view is that the public benefits are not likely to outweigh the detriments from the proposed arrangements, with ACCC Deputy Chair Dr Michael Schaper saying that, “[t]he ACCC is concerned that if most ophthalmologists could agree with other members of their practices on prices for services, it may result in high prices for patients. This is particularly concerning in an environment of high demand and long waiting times for these services”.

This decision is in contrast with the previous medical authorisations granted to general practitioners (GPs) and dental practitioners, both of which were approved.

Earlier this year:

  • GPs operating in the same practice were granted authorisation (blogged about here) for five years to collectively bargain with visiting medical officers and Medicare Locals and also to set prices in their practices; and
  • Dentists operating in the same practice were granted authorisation for ten years to reach agreements on fees charged to their patients.

In these instances, the ACCC saw public benefit in allowing medical practitioners working in shared practices to reach agreements on fees that they charge their patients. Of these arrangements, Dr Schaper said that they arrangement provide more transparency in that patients know how much they are being charged regardless of the practitioner being seen and encourage more shared practice structures.

In the case of the interim authorisation granted to the Rural Doctors Association of Australia (RDAA) on 13 June 2013, the RDAA was continued to be allowed to collectively negotiate with state and territory departments on behalf of general practitioners and rural generality visiting medical officers in rural areas.  According to Dr Schaper, this will provide “some stability and certainty in [the] area – which may help attracting and retaining rural doctors”. However, new arrangements involving collective bargaining between RDAA and Medicare Locals proposed as part of the authorisation was not granted. Concerns regarding lessening of competition in the provision of healthcare services to Medicare Locals was cited as one of the reasons for the decision.

In contrast, in the case of ophthalmologists, the ACCC has concerns that the smaller number of specialists (when compared to GPs or dentists – with 25,000 GPs compared with 812 ophthalmologists) within each region means that moving to common fees within shared practices is likely to significantly reduce the level of competition between ophthalmologists and result in substantial detriment.   In addition, the ACCC expressed the view that it was less important for ophthalmologists working in shared practices to have common fees.

The granting of the authorisation would be highly detrimental to all patients and “particularly concerning in an environment of high demand and long waiting times for those services”.

These decisions show that the ACCC sees a clear benefit, in certain circumstances, of medical practitioners operating in shared practices agreeing on certain fee arrangements, a factor which must be shown by the applicants when drafting applications and the test upon which the ACCC grants its authorisations. The new draft authorisation guidelines (blogged about here) make it clear that the onus is on the applicant to show the public benefit, as well as outlining factors the ACCC will commonly consider when assessing the public benefit of an authorisation.  Comment on the draft guidelines closed at the end of May 2013.