GPs given a clean bill of health to engage in price setting

Published On 18/03/2013 | By Hanna Gyton | Authorisations

The ACCC has granted authorisation to individual General Practitioners (GPs) working in shared practices to allow them to engage in intra-practice price setting and collective bargaining until 15 March 2018.

The Australian Medical Association Limited (AMA) sought authorisation from the ACCC to permit GPs who practise in a single general practice to engage in:

  • Intra-practice price setting;
  • Collective bargaining in relation to the provision of Visiting Medical Officer services (i.e. medical services provided by medical practitioners appointed by health departments, local area networks and hospitals); and
  • Collective bargaining with Medicare Locals in relation to the provision of medical services

(the Conduct).

The AMA sought authorisation for those GPs who share patient records, common facilities, policies or a trading name and operate within a partnership of two or more GPs, an associateship of two or more GPs, any other business structure which involves two or more separate legal persons or any of these business structures employing GPs on a locum basis.

In theory, GPs working in a shared practice compete against one another for work.  By engaging in intra-practice price setting and collective bargaining, AMA members would be in breach of the Competition and Consumer Act 2010 (Act).  The ACCC may grant a party authorisation to engage in intra-practice price setting and collective bargaining under the Act if it is satisfied that any likely public benefit outweighs the public detriment.  Authorisation from the ACCC provides parties with a statutory protection from court action for conduct that might otherwise breach the Act.

The ACCC granted authorisation to the Royal Australian College of General Practitioners in 2002 and 2007, and the Rural Doctors Association of Australia in 2008 to engage in intra-price setting and collective bargaining.  Authorisation in this instance would expand the types of practices engaging in price setting and collective bargaining to include Visiting Medical Officer and Medicare Local services.

The AMA submitted that the Conduct would likely result in a number of public benefits arising from a collegiate atmosphere and greater contractual, transactional, operational and administrative efficiencies.  The AMA also submitted that the detrimental anti-competitive effects would be minimised by high levels of bulk billing for GP services, the voluntary nature of the Conduct, the constraints of health budgets and the small size of each practice group.

In assessing AMA’s submissions, the ACCC’s Deputy Chair Dr Michael Schaper noted that “if a group of GPs operates as a single practice, the likely benefit of permitting practice-wide price setting are likely to outweigh any public detriments.  For example patients will know the fees they are likely to be charged, regardless of which particular doctor they see in the practice”.

After reviewing a number of submissions and noting the efficiency gains and improved patient care that would result, the ACCC granted authorisation to all GPs practising in a single general practice for five years.

Photo credit: Alex E. Proimos / / CC BY

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