Speech to the AMA (WA) Health Symposium 2001 - "Competition Laws and Principles"

It is a great pleasure to be here in Western Australia to talk about a less than pleasurable topic for the medical profession and the broader Australian community.

Australians are a common sense people. In 21st century Australia, the Trade Practices Act 1974 leads to a range of unintended consequences for the health sector that are not common sense.

The Trade Practices Act - the TPA for short - was derived from US anti-monopoly laws targeting the railroad and petrol monopolies.

It seeks to keep prices down by maximising competition for fairly homogenous products or services.

Its blanket application to independent doctors, or groups of doctors who are working cooperatively to provide health services, was never contemplated by those who drafted the legislation.

Unless, of course, those doctors ran a railway or a chain of service stations on the side.

Doctors should not be allowed to form large monopolies and hold patients to ransom, but we should be allowed to cooperate to deliver quality care and training.

There should be a level playing field in the market power between doctors, health funds and hospitals.

The current approach to trade practices in health is all about misplaced ideology, not well placed policy.

It is anti-doctor and anti-patient.

So, as such, it's not about market forces at all. It is, quite literally, a matter of life and death.

Providing a means for attacking doctors, the TPA is working against the best interests of those doctors' patients.

By placing country doctors in particular at risk of prosecution, the TPA is attacking the confidence and the unity - the lifeblood - of many communities in rural and regional Australia.

I challenge Mr Fels to tell the Australian public just one positive thing - just one - that the application of the TPA on doctors has done for the Australian community.

What has been achieved in the national interest? Nothing.

It all comes down to demonising doctors. It has nothing to do with the public interest.

The ACCC's attitude to doctors is there in the papers or on the radio or the TV every day. Because that's where Mr Fels does his debating. He uses the press release and the 7-second grab and the relentless pouring of anti-doctor propaganda into the country media.

There is no substance to the argument, and all it does is disrupt the efficient delivery of medical services to patients and communities.

Because of this, the AMA has been calling for an independent inquiry into the application of the TPA in regard to the medical profession.

The time has come for that inquiry. It is time for the Government to bring it on.

Why do we want an inquiry?

We want it because we want fairness, we want honesty and, above all, we want common sense to prevail in the application of the TPA to the delivery of medical services.

The AMA has acted responsibly.

We saw a potential problem, we informed and educated our members, and we raised our concerns in the appropriate places to the appropriate people.

Doctors have received great support and encouragement from the Deputy Prime Minister and Leader of the National Party, John Anderson.

Prime Minister, John Howard, and his advisers have been briefed thoroughly and often on this problem and have given the AMA and doctors a sympathetic hearing.

I have personally briefed Opposition Leader, Kim Beazley, and Shadow Health Minister, Jenny Macklin, on the issues surrounding doctors and the TPA, and they listened.

Former Democrats Leader, Meg Lees, has expressed her and her party's concern at the situation.

But Health Minister, Michael Wooldridge, has not only failed to get behind the doctors, he has publicly expressed support for the way Allan Fels is applying the TPA to the provision of medical services.

In fact, in a strange twist, the Minister's rhetoric has been echoed precisely by Fels, saying that the AMA is not really interested in the impact of competition policy on health services, we just want a lever to destroy bulk-billing.

This is a handy device for a Minister who wants the issue of medical fees after the Relative Value Study to go away.

And it is a handy device for Fels who is desperate to avoid having his Commission's methods scrutinised.

Dr Wooldridge has often said he is not the Minister for Doctors. With his stance on the TPA, he is behaving like the Minister against Doctors.

And all the while, Mr Fels says the AMA is scaremongering.

Is it scaremongering for the AMA to spend tens of thousands of dollars on compliance programs to inform doctors how comply with the TPA?

Is it scaremongering to warn doctors that doing their jobs under extreme pressure in 2001 may not fit snugly into the requirements of a piece of 1974 legislation intended for other purposes?

This is what the ACCC has advised the AMA:

"A medical practitioner who chooses to work as an independent or sole practitioner must make his or her business decisions such as setting fees or negotiating contracts on an independent and individual basis. That is, not collectively with other competing practitioners".

Now think about that for a minute and decide who is doing the scaremongering.

How many doctors discuss rosters, work sharing, billing or fee arrangements, or hospital negotiations with colleagues or attend meetings where these sorts of issues are raised?

Most, I would say.

And this threat of prosecution is driving doctors away from the types of meetings that decide the fate of services to rural health facilities. Gloss over it all you like, but the truth is out there.

MPs have told us they can't get doctors - or, as Fels would have it, "competitors" - to meet to discuss their arrangements because of the indirect threats by the ACCC that to do so would put them at risk of the ACCC's attention.

Doctors know they don't have to have actually done anything wrong to be punished. The financial and emotional cost of defending an action by the ACCC based on the most flimsy of evidence is enough to break the spirits and the bank balances of individuals and organisations.

Doctors do not live or work in a vacuum. They do not bring down 'the cone of silence' whenever they talk shop. Other than Maxwell Smart and The Chief, who does?

As an organisation representing doctors, we have to be vigilant on compliance.

Our legal advisers point out that the anti-collusion provisions of the Trade Practices Act regulate not just 'agreements' but also 'arrangements and understandings' between competitors.

They also tell us that doctors are faced with the situation that they will have to constantly make legal assessments as to whether small fragments of past, present or proposed conversations and correspondence with their rivals may, in the eyes of the law amount to illegal behaviour because there is some 'community of purpose' in what has transpired.

The ACCC, too, wants to be seen as vigilant in the public eye - and it wants the public to believe that the AMA is objecting to this vigilance over doctors.

That is not the issue AMA has with Mr Fels. The issue is that Mr Fels keeps accusing the AMA of being "alarmist" in the advice it gives to its members about complying with competition law. This accusation is highly objectionable for an association with our history of responsibility to our members and the public.

The AMA must be responsible in the advice and guidance it gives. The Act provides severe penalties to those who break the law, or conspire with others to do so.

Finding ways to circumvent the effects of the competition law is not the AMA's role. It is to assist members understanding of it, so that they comply with it.

Mr Fels wrongly claims that AMA wants doctors to be exempt from its effects.

On the other hand, he argues that they have little to worry about as, so far, he has not taken action in relation to, for example, "genuine" roster arrangements.

Yet the ACCC has consistently fallen short of stating unambiguously what a "genuine" roster is.

Instead, we are told that each individual case can apply for an "authorisation" which means putting up your hand to say "I don't know if this arrangement is genuine".

They are taking the risk, then, that if it is not "genuine", the ACCC will be in there in full force making an example of you with prosecutions, legal fees and the threat of large fines over your head for possibly years to come.

Attractive option, isn't it? Little wonder that so few authorisations are sought.

The ACCC produced a draft Guide to the Trade Practices Act for doctors.

Following AMA comments, they have produced a revised guide that may be further revised and revised again as more inaccuracies are picked up.

Remember that the AMA's legal advisers labelled the original draft guide as 'misleading and dangerous'.

The guide - in its many guises - attempts to gloss over the problems, to put it politely.

In its introduction it states:

" …it was produced to correct misleading and alarmist public comments about the implications of the Act for GPs and the Commission's priorities…"

The Guide then proceeds to set out ways in which doctors can avoid prosecution under the Act. For example, it states:

"Individual practitioners who participate in an after-hours service AND who wish to set a common fee for this practice would need to set up an after-hours trading or management company to do so."

Had a lawyer advised a practitioner to evade the effects of the Act by a corporate device with no other purpose than to set fees, contrary to the Act, the lawyer is likely to be prosecuted alongside the practitioners.

Why not, instead, amend the Act to ensure that doctors are able to negotiate appropriate terms and conditions upon which they provide emergency or public services outside their normal private practice?

Their provision of such services is undertaken as part of their professional obligation and eats heavily into the time they have to generate fees required to meet, for example, the soaring expense of professional medical indemnity insurance.

As to that problem, presumably the ACCC's response is that professional medical indemnity premiums and the crisis they have caused to the rural community and public hospitals generally are not its concern.

But, according to the ACCC's Guide, if three doctors in a country town agree that only one of them will pay the high premium to practice obstetrics they will all be in breach of the TPA.

Our legal advisers also tell us that 'the draft Guide does not discuss in any detail the way in which communications between "competing" GPs may over time give rise to an "arrangement" or "understanding" which in fact does amount to unlawful conduct'.

The advice goes on to say '…collaborative decision-making to establish a service that might not otherwise exist is regarded as acceptable lawful conduct. In other words, "but for" the joint decision of GPs to pool their resources, there would not be sufficient reason to establish a new service. However, it also appears from the draft Guide that any subsequent discussion and decision by one or more of GPs about discontinuing the service runs a very high probability of being unlawful conduct. This is even though the discussion and decision-making produces a rational economic and social result'.

I'll repeat that last bit: even though the discussion and decision-making produces a rational economic and social result.

In this situation, the public interest - the community benefit - is apparently not a concern of the ACCC.

And what does Mr Fels think of our legitimate objections to his tactics and our calls for an inquiry. Not much, but he responds in riddles. To quote from his guideline document:

"The Commission has also heard that, due to the ethical obligations of the doctor in the doctor-patient relationship, competition laws should not be imposed upon doctors."

This is not what we have said, Mr Fels. You are not hearing us. Or, more likely, you don't want to hear us. You are not addressing the issues that are affecting the community as a whole.

Let's have a look at the ACCC case, line by line.

In relation to rosters, the ACCC position is to say, if it is a genuine roster, the ACCC will not take any action. As to "genuine", which has a subjective and objective element, in the guidelines it is suggested that, if a doctor who is not pulling his or her weight is excluded from the roster, it is a genuine roster, and not set up for anti-competitive practices, and the ACCC would not prosecute.

Officers of the ACCC thought it reasonable for a group of rostered doctors to pass judgement in this way.

They indicated that as long as the ACCC agreed with the assessment, it would be regarded as a genuine roster. What happened to natural justice - procedural fairness - in that interpretation of the law?

The AMA can only assume that if a court of law disagreed in relation to whether or not a doctor was pulling his or her weight, or performing his or her roster duties satisfactorily, that the ACCC would then be entitled to regard the roster as not genuine, and prosecute.

Back to the central question. Is the AMA providing misleading and alarmist advice - scaremongering - to its members? Or are we providing prudent advice in accordance with the law?

Fair-minded people, common sense people, would say the latter - and that is exactly what the AMA is doing: advising its members.

And what about the ACCC's track record in persecuting doctors with the Trade Practices Act?

Rather than sit down and talk the issues through with the AMA, they go about the place cherrypicking the various medical groups for special attention.

The ACCC has taken to referring to their attacks on the anaesthetists in NSW as a victory because it didn't get to court, with the anaesthetists settling out of court.

Let me put it on the record today that it was not a victory for the ACCC or the Australian public.

I have discussed this matter with my anaesthetist colleagues and it would appear that they had advice that they would have won this case if it had gone to court.

But here is the important point: there was NO finding of any wrongdoing by the anaesthetists in regard to the Trade Practices Act.

An out-of-court settlement concerning costs does not constitute a victory for anybody.

The anaesthetists in fact made a commitment to educate their members about the ACT so that no breaches would occur, and that the ACCC would get off their backs if they paid a large amount of money towards the ACCC's court costs.

If the ACCC thinks it is a victory to drive people to the wall just because they want to work together to ensure that they are rewarded for after hours work or for being on-call - like any other profession or trade - then their priorities are sadly out of whack with the rest of the community.

I won't dwell on that particular case now, but we'll be hearing more about it, I'm sure.

Last week, the AMA sent off a letter to the ACCC in support of the Royal Australasian College of Surgeons seeking from the ACCC an authorisation - permission, if you like - to continue in its role in surgical training.

Have you ever heard of anything more ridiculous?

The next thing you know Alan Fels will be asking the National Farmers' Federation to seek authorisation to represent farmers.

The College has been going about its business for as long as anyone can remember, hurting no-one and turning out professionally trained surgeons to serve the community.

The ACCC says the College's work is anti-competitive because it determines the number of trainees accepted into advanced surgical training and because it assesses the credentials of overseas trained specialists.

Now the College has to spend anything up to $500,000 to get ACCC authorisation to do this important work. Wrong, wrong, wrong.

Even though the College doesn't think it needs to get the authorisation - nor does it want to - it has to.

Why? The ACCC says so.

So the AMA is supporting this application, not because we think the College needs to get the authorisation, but because if we play the ACCC's game we may get some public and political focus on how costly and unjust this whole charade has become.

Not just for the profession, but the whole community. Who's next?

Then, locally, you have the Joondalup case.

I won't comment specifically on the case as it's still going and the two year action against the AMA (WA) by the ACCC should be finalised later this year.

As reported in the AMA (WA) journal, Medicus, the matter - over an alleged breach of competition laws shortly after they were introduced in July 1996 - is expected to proceed in the Federal Court by consent.

I understand that the AMA (WA) and the ACCC have resolved the matter in principle.

As part of the settlement , the ACCC has agreed that no individual doctors will be joined in the action.

It was also agreed that if any doctors are required as witnesses in the ACCC action against Mayne Nickless, the AMA (WA) will be contacted and the Association will be in a position to arrange advice for them.

The AMA (WA) is also finalising a draft compliance program that will be made available to Councillors and staff and members of the profession.

According to my colleague, AMA (WA) executive member, Dr Rosanna Capolingua-Host, and these are her words:

"The alleged breach of the competition laws occurred following discussion with the State Minister for Health at the time, the Health Department and Mayne Nickless to ensure a smooth transition from the 80 bed Wanneroo Public Hospital to the 365 bed Joondalup Health Campus.

"This was the first example of the WA Government's health agenda that involved the use of formerly public hospitals for the delivery of services to both public and private patients.

"The AMA and its members had never before faced these circumstances.

"These discussions were held to facilitate doctors being attracted to the new Campus as the Health Department had experienced significant difficulties in the past. The Health Department, AMA and Mayne Nickless had round table talks to streamline the process of change.

"When the Association became aware there may be a breach of the new competition laws, it sought legal advice and, based on that advice, it advised HCOA it was withdrawing from the agreement. It also advised the Health Department and Minister for Health.

"The AMA then formally contacted the ACCC.

"At no stage had the AMA (WA) knowingly or intentionally sought to breach the new competition laws."

"The AMA (WA) never threatened the Health Department, the employer at the time, that it would withdraw services from Joondalup Health Campus."

I don't think I need add anything to Rosanna's words.

So where to from here?

As I said earlier, we will keep pushing for an independent inquiry into the impact of the TPA on the medical profession, with a focus on the country doctors in the first instance. The RDAA is right behind us on this.

We have the support of the Deputy Prime Minister, the empathy of the Prime Minister, and the undivided attention of MPs who hold seats in marginal regional electorates.

I have no doubt that the general public - the punters - are with us as well.

People are sick of losing services from their communities. They've lost the banks and the post offices and government agencies and the rest.

If they lose doctors or some medical services as a consequence of the possibility of breaches of the TPA it will be the last straw.

We know why doctors - the GPs, the specialists, the surgeons - entered the profession. They wanted to help the sick and the injured, to keep people well.

They still want that. But what they don't want is unnecessary external pressures to detract from them doing their job to the best of their ability - to do what all those years of hard work and training and dedication and care have prepared them to do.

But what have we got out there now? Increased costs of running a practice. Medical indemnity insurance premiums blowing out to outrageous levels. A Medicare Benefits Schedule of fees that is outdated.

And Allan Fels and the TPA, to boot.

The true victims of all this are the patients. Doctors should be allowed to care for them in the public interest.

But what does Mr Fels say when his questionable tactics are questioned?

He says predictable things like:

"The doctors just want more money".

Or

"This is part of the doctors' campaign to end bulk-billing".

Give us a break, Mr Fels.

I know that the doctors can sleep well at night in the knowledge that their day's work has been good for their patients and has contributed something positive to the community.

The ACCC attacks doctors because they see us as easy targets.

They think that using excuses like 'moneygrab' and 'destroying bulk-billing', they will get public opinion behind them. That's not just wrong, it's lazy.

This nonsense has to stop.

An independent inquiry would help fix this problem. I again call on our political leaders to take some action on competition policy and the Trade Practices Act.

Sure, the ACCC has a role to play - somewhere, somehow - but it certainly shouldn't be persecuting doctors. It is not in the pubic interest or in the national interest. And it definitely is not in the patients' interest.

In short - it all fails the common sense test.

Thank you.

CONTACT: John Flannery (02) 6270 5477 / (0419) 494 761