The Federal Court has declared that a Melbourne doctor attempted to induce a boycott of bulk-billing and after hours services by doctors wanting to practice at a Berwick Springs medical centre.
The Australian Competition and Consumer Commission alleged Dr Abraham Freund and his company, AK Freund Pty Ltd, attempted to make or induce an arrangement or understanding with a competitor to boycott bulk-billing and boycott after-hours medical services.
"The conduct in this case is extraordinary and shows the lengths to which some doctors will go to impose their will on other doctors and to shield themselves from the competitive effects of others bulk-billing and/or providing after hours medical services", ACCC Chairman, Professor Allan Fels, said today.
In December 2002, the ACCC instituted proceedings against AK Freund Pty Ltd and Dr Freund alleging that they insisted upon the incorporation of 'Rules' in any leases of the Berwick Springs Medical Practice which amongst other things, imposed obligations on general practitioners operating separate business in competition with AK Freund Pty Ltd and Dr Freund:
- not to provide bulk-billing services to patients, other than to pensioners, Health Card holders or to the GP's immediate family members and
- not to provide medical services to patients after 8 p.m. Monday to Saturday or after 1 p.m. on Sundays.
The ACCC alleged that it was AK Freund Pty Ltd and Dr Abraham Freund's intention that, by incorporating the 'Rules' into leases for medical centre suites, anyone who leased a suite would be subject to the 'Rules'.
It was also alleged that it was the parties' primary concern that any general practitioners practicing from the centre in competition with Dr Freund be obliged not to bulk-bill generally without the company's consent and that practice hours be restricted.
The court declared that AK Freund Pty Ltd attempted to make and induce a contravention of the exclusionary (primary boycott) provisions of the Act by:
- procuring (agreeing) that in its lease of premises at the Berwick Springs Medical Centre, there was a requirement to include certain 'Rules' in all other medical centre leases. Two rules effectively required that other general practitioners at the medical centre:
- not bulk-bill for services they supplied except to patients who were pensioners, holders of health cards or members of the GP's family and
- not supply services from those premises before 8 a.m. or after 8 p.m. on Mondays and Saturdays, nor before 9 a.m. or after 1 p.m. on Sundays.
- getting an undertaking from the premises lessor that no medical centre leases would allow a contravention of the 'Rules'.
- instituting and pursuing proceedings in the Victorian Civil and Administrative Tribunal, Retail Tenancies List against the lessor which sought to injunct the lessor from entering into any medical centre leases which would allow contravention of the 'Rules'
- proposing to a prospective tenant that they make an agreement so that the prospective tenant supplied services within the ‘Rules’ and rejecting amendments to the 'Rules' which would have allowed bulk-billing and after-hours services.
"If the contravention had succeeded, Berwick Springs Medical Centre patients could not get medical services from either of the two competing general practices before 8 a.m. or after 8 p.m. Monday to Saturday or before 9 a.m. or after 1 p.m. on any Sunday. Also they could not get services on a bulk-billing basis from either of the two competing general practices (unless the patients were pensioners, health card holders or immediate family members of the GPs)", Professor Fels said. AK Freund Pty Ltd and Dr Freund have provided undertakings to the court that they will not, for five years, attempt to restrict hours or bulk-billing at Berwick Springs in the way previously attempted.
"Peer group pressure from doctors or professional associations which induces or attempts to induce a boycott of bulk-billing by competing medical practitioners is a serious breach of the Trade Practices Act 1974 and a matter of high enforcement priority for the ACCC".
Doctors should be free to decide independently whether to offer bulk-billing services to patients", Professor Fels said. "Such decisions should not be imposed on them unilaterally or by pressure. The ACCC recognises the importance of bulk-billing to the Australian community. This case further highlights that medical practitioners are not beyond the reach of competition law. The ACCC will remain vigilant to ensure that all professions comply with the Trade Practices Act 1974.
"Parliament has recognised the serious detrimental impact on competition and consumers of primary boycott and attempted boycott arrangements and prohibited such arrangements outright, that is, without having to establish the anti-competitive effects of the arrangements.
"Doctors should appreciate that even though no pecuniary penalties were sought against AK Freund Pty Ltd or Dr Freund, the law provides maximum penalties of $10 million for companies and $500,000 for individuals for breaches of the primary boycott provisions of the Act".
AK Freund Pty Ltd and Dr Abraham Freund will also pay the ACCC's costs, agreed to the sum of $10,000. Settlement of the matter followed mediation.