Competition watchdog’s ruling ends three-year bid to restore guidelines
MEDICAL fee guidelines for doctors are out because they are anti-competitive, the Competition Commission of Singapore (CCS) has ruled.
The guidelines set by the Singapore Medical Association (SMA), on how much doctors in the private sector should charge for their services, had been voluntarily dropped by the SMA earlier, on advice that it could infringe the Competition Act.
During its three-year bid to restore the guidelines, the SMA had approached not just the CCS but also the Ministry of Trade and Industry.
The CCS formally notified the SMA of its stand yesterday, following a 1 1/2 year-long review.
In explaining its decision, CCS’ chief executive Teo Eng Cheong said price recommendations by trade or professional associations posed an anti-competitive risk.
Mr Teo said it was hard to set a price that can be considered at a “right or reasonable level”, and that price guidelines tend to cause a clustering effect among suppliers in the industry.
“If it’s set at $5, all the suppliers will supply this thing at $5. People who can cut their cost and supply at a lower cost will have no incentive to do so, because everybody is charging $5,” he said.
Coming in at close to 100 pages, SMA’s Guideline on Fees recommended pricing for some 1,500 services and procedures, such as consultation, medicine, prescription, medical reports, surgical procedures, and court appearances.
From the start, the SMA has argued that it provided transparency for patients in a market where information is heavily skewed towards the provider.
But a market study commissioned by the CCS over the past year has shown that private doctors can reduce their prices without the guidelines.
Since they were removed, professional fees in the private sector have come down slightly, by 2.6 per cent, after accounting for medical inflation.
The number of complaints received by the SMA on overcharging by doctors has also decreased: There were 26 complaints in 2007, 10 in 2008, and 14 in 2009.
Mr Teo noted there were a number of measures in place to provide safeguards for patients.
For example, restructured hospitals, which cater to eight out of 10 patients, supply real-life bills which are published online and provide a true benchmark for pricing (http://www.moh.gov.sg/mohcorp/billsize.aspx?id=302).
SMA voluntarily scrapped its guidelines in April 2007 so as not to contravene the Competition Act, which had come into effect the previous year.
In 2008, it appealed to the Ministry of Trade and Industry to exclude its guidelines from the Act. That appeal was turned down in June, with the ministry saying that the fees guide risked anti-competitive behaviour and would do little to keep health-care costs down.
The SMA also submitted a separate application in February last year to the CCS to decide if the guidelines would infringe the Competition Act. The CCS said it would take no further action now since no new guidelines have been issued by the SMA since 2007.
SMA president Chong Yeh Woei told The Straits Times he respected the CCS’ decision, which he said has brought closure to a “long-drawn” affair.
When asked why the SMA had continued to fight to keep the guidelines, Dr Chong said: “We believed that the guidelines worked very well. Our case to CCS was that it helped to reduce chances of overcharging, and it kept fees down below inflation.”
He added: “It is obvious that the Guidelines on Fees has seen its day... it has outlived its usefulness.” Going forward, Dr Chong said he hoped the Government would continue to use its regulatory powers to increase price transparency in the medical sector.
As for the 20 per cent who use private sector hospital care, and medical tourists, he said: “If we don’t protect them... we may erode trust between the profession and the patient.”
SMA will have two months to appeal against the CCS’ decision.
Dr Chong confirmed it would consult its legal advisers, but added: “In all probability, we will not appeal because the odds are stacked against us.”