A recent Australian Competition and Consumer Commission investigation should serve as a reminder to medical practitioners that they must comply with Australia's competition laws.
The investigation concerned five doctors from the Kangaroo Island Medical Clinic, the only general medical clinic on the island located in South Australia. The clinic is operated as an associateship, in which each of the doctors operates their own medical practice and shares office and administration facilities. In addition to the general practice, doctors from the clinic provide on call emergency, obstetric and anaesthetic services to the island's hospital.
Doctors not practising within a single legal entity (a single company, sole natural person or legal partnership with no corporate partners or trust) are competitors under the law. Doctors practising in an associateship structure are competitors.
In letters dated 1 October 2009, each doctor wrote to the administrator of the Kangaroo Island hospital in these terms:
- gave notice of his or her intention not to accept the current remuneration for after hours services to the hospital from midnight 31 October 2009, and
- enclosed an interim contract for negotiations should the hospital wish to continue an on call doctor arrangement for patients presenting or admitted to the hospital.
Each did so with the awareness that identical letters were sent by each of four of the other doctors from the clinic.
The ACCC's investigation was commenced due to serious concerns that the doctors had breached the competition law, and with concern for the provision of continuing medical services to residents of and visitors to the island.
The doctors did not withdraw their services at the end of October 2009. However, their conduct in sending the letters raised serious concerns which required investigation by the ACCC.
The ACCC has authorised collective bargaining by doctors with hospitals where the doctors are in associateships and partnerships operating as a team and sharing patient records, facilities, a trading name and policies and procedures, however the authorisation does not allow collective boycotts.
A collective boycott, where competitors agree to threaten to withdraw their services, is a serious breach of competition law.
At the conclusion of the investigation the ACCC was satisfied that its concerns could be addressed by undertakings to the ACCC and did not require further enforcement action. Subsequently, each of the five doctors, Drs Mark Raines, Tim Leeuwenburg, Christine Haigh, Johannes Steyn and James Doube, gave an undertaking to the ACCC that the doctor will not, in the future, come to an arrangement or understanding with one or more of his or her associates to withdraw services from the Kangaroo Island hospital.
"Despite the availability of free publications on the ACCC website and enforcement action taken by the ACCC in the past, there appears to be a lack of awareness among medical practitioners that they are within reach of competition law or the circumstances in which they are at risk of breaching those laws," ACCC chairman Graeme Samuel said today.
"Let me take this opportunity to remind every medical practitioner in private practice that he or she must comply with competition law. You are at risk of breaching the law and being subjected to the substantial penalties that apply if you engage in collective bargaining with your competitors, or collectively boycott the supply of your services, where such conduct is not authorised by the ACCC.
"The ACCC will investigate any circumstances where it appears you have breached the competition laws."