ACCC concerns about doctors' proposed collective bargaining

The Australian Competition and Consumer Commission today issued a draft objection notice to the collective bargaining notification* lodged by AMA Victoria on behalf of 39 Visiting Medical Officers at Latrobe Regional Hospital.

"AMA Victoria proposes to collectively negotiate, on behalf of the doctors, contract terms and conditions, including fees, with Latrobe Regional Hospital, a base hospital in the Gippsland region of Victoria," ACCC Chairman, Mr Graeme Samuel, said today.

"The size of the group constitutes a significant proportion of the specialists that would be available to undertake Visiting Medical Officers' services at the hospital.  

"In the past the ACCC has looked at areas of residual competition. In the recent RACGP authorisation the bargaining groups were limited to each general practitioner's practice. GPs were likely to be constrained, to some extent, by other GP practices in localised markets.

"In the Latrobe notification, the ACCC is concerned that the coverage and composition of the group could impact on competition.

"Against this, the ACCC considers the justification for public interest protection for the proposed arrangements is marginal."

Hospitals are faced with workforce shortages and the need to engage specialists. There does not appear to be strong evidence of a disparity in bargaining positions between the group of doctors and the hospital.

The presence of different specialties in the group, and less commonality of interest, also reduces the public interest justification for collective bargaining.

Through issuing this draft notice, the ACCC has not ruled out arrangements between doctors which retain competitive pressures in their dealings with hospitals. The ACCC will look at arrangements on a case-by-case basis.

The ACCC is seeking further submissions on its draft objection notice from the applicant and interested parties.

The draft objection notice will be available from the ACCC's website, www.accc.gov.au.

Background

*Collective bargaining refers to two or more competitors collectively negotiating terms and conditions with a supplier or customer. Without protection, it can raise concerns under the competition provisions of the Trade Practices Act 1974. Small businesses can obtain protection from legal action under the Act for a collective bargaining arrangement by lodging a notification with the ACCC. Provided the ACCC does not object to the notified arrangement, protection commences 28 days after lodgement. The ACCC may object to a collective bargaining notification if it is satisfied that the proposed collective bargaining arrangement is not in the public interest (and in some cases, that the notified arrangement will substantially lessen competition).