It's final - SMA's medical fee guidelines anti-competitive
By Claire Huang | Posted: 19 August 2010 1323 hrs
SINGAPORE: The tussle between the Singapore Medical Association (SMA) and Competition Commission of Singapore on guidelines on doctors' fees has finally ended.
After an 18-month review, the Commission concluded that the Guidelines On Fees set by the SMA are anti-competitive.
In February last year, SMA had filed a notification to find out if the guidelines infringe the Competition Act.
In June this year, the Commission issued a provisional statement saying the guidelines are anti-competitive, thereby infringing Section 34 of the Competition Act.
On Thursday, the CCS laid out the grounds for its final decision not to have such guidelines.
It said the guidelines apply to the private healthcare sector only and create a cluster effect.
This means that by setting a fixed fee, doctors who are able to charge less, will have no incentive to do so.
Mr Teo Eng Cheong, Chief Executive of CCS, said: "If you look at the hospital care segment, about 80 per cent is provided by government restructured hospitals and government clinics, and these government hospitals and clinics do not refer to the guidelines on fees that SMA had issued in the past."
Mr Teo also rejected the idea that the remaining 20 per cent of consumers are left to fend for themselves.
He said: "80 per cent of the market do not refer to the GOF (Guidelines on Fees) and are able to function effectively in the absence of the GOF. As for the remaining 20 per cent that chooses to go to the private sector, they can still refer to the costs in the public sector hospitals. If you look at the MOH websites, they've listed out for a number of common diseases the average bill sizes you are expected to incur in the hospital."
Mr Teo added that there are safeguards for patients even without SMA's guidelines.
One example is the Health Ministry's requirement for doctors to display their charges at their clinics.
The Commission's decision comes as no surprise as the government had thrown out the SMA's request for its Guidelines On Fees to be excluded from the Competition Act in June this year.
After consulting the Health Ministry, the Ministry of Trade and Industry (MTI) determined that the guidelines would create anti-competitive behaviour and cannot be excluded from the Competition Act.
The guidelines were introduced in 1987 by SMA and the Association of Private Medical Practitioners of Singapore (APMPS), following the Health Ministry's calls for a guide on medical charges so as to equip patients with pricing information on consultation and surgical fees and to prevent private doctors from overcharging.
In April 2007, the SMA removed the guidelines voluntarily on legal advice that they could contravene the Competition Act.
It then sought to have the guidelines reinstated, but was rejected.
After the guidelines were removed in 2007, there wasn't a significant increase in overcharging complaints to the SMA, said the Commission.
In fact, numbers have gone down from 26 in 2006/2007 to 14 in 2008/2009.
A market study conducted from second quarter last year till first quarter this year found that after accounting for medical inflation, professional fees charged by private doctors actually dropped by 2.6 per cent after the guidelines were removed.
Mr Teo said this further fortifies the fact that the guidelines, which aren't binding in the first place, have no impact on private doctors' fees.
The study, which covers the periods before and after the guidelines were removed, sought the opinions of stakeholders including insurance companies and certain segments of the public.
There may be no guidelines on fees for the private sector but the government is pushing for more transparency in this area, which is why, from early next year, all hospitals making Medisave claims will have to submit basic billing information and this information will be posted on the Health Ministry's website.
Hospitals and doctors are also required to provide financial counselling, said Mr Teo.
He pointed out that in a competitive market, prices are determined by demand and supply.
Minimum or maximum pricing recommendations discourage competition, so the Commission urges all businesses to set their prices independently and not rely on guidelines issued by trade and professional associations.
The Commission explains that its decision is also in line with treatment price recommendations for healthcare in countries like the US, UK and Finland.
On the outcome of the ruling, Dr Chong Yeh Woei, president of SMA said the guidelines have outlived their usefulness.
He said: "We just hope that the ministry will be able to improve the regulation such that there will be transparency of fees. We're particularly concerned about the minority who use the private sector and the medical tourists."
"Patients will look at doctors as doctors, whether they're from public sector or private sector. So the downside risk of this is that the trust between the doctor and the patient will be eroded," added Dr Chong.
SMA said it will continue to publish data on specialists' fees to give patients some information on pricing in the private medical sector.
SMA has two months to appeal against the Commission's ruling.