MEDICAL COLLEGES AND COMpETITION LAW A

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MEDICAL COLLEGES AND COMpETITION LAW A
MEdical colleges and
competition law
A discussion paper
THE ROYAL AUSTRALIAN AND NEW ZEALAND COLLEGE OF RADIOLOGISTS®
Medical Colleges and Competition Law
A discussion paper for the RANZCR
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
Contents
1 Introduction ..................................................................................................................................... 6
2 Competition legislation ................................................................................................................... 6
3 Medical colleges and competition law ............................................................................................ 7
4 The RACS experience .................................................................................................................... 7
5 ACCC review of medical colleges .................................................................................................. 8
6 Complaints to ACCC in 2004-05 .................................................................................................... 8
7 Training numbers............................................................................................................................ 9
8 Recent developments ................................................................................................................... 10
9 Conclusion .................................................................................................................................... 10
10 Acknowledgments ...................................................................................................................... 11
11 References ................................................................................................................................. 12
Appendix A: Summary of ACCC conditions imposed in RACS authorisation ................................... 13
Appendix B: Brennan Report trainee selection framework ............................................................... 14
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
1 Introduction
This paper provides a discussion on the potential impact of competition legislation on medical
colleges in Australia and New Zealand. Competition legislation has been tested in the past by
investigations into alleged anti-competitive behaviour by some colleges, largely around trainee
selection, training position accreditation, artificially limiting trainee numbers, and perceived unfairness
or lack of clarity in the assessment of International Medical Graduates (IMGs).
The Allen Consulting Group radiotherapy workforce projection scenarios highlight a potential
disconnect between the numbers of radiation oncology facilities in Australia and the workforce
available. The capacity of the radiation oncology workforce to expand in line with cancer incidence
may be limited by infrastructure resources and growth in related professions such as medical physics.
The forecast for radiologists by Health Workforce Australia indicates shortages to 2025, though there
are likely to be regional variations, and pronounced differences between metropolitan and other
locations. The radiologist workforce in New Zealand appears to be in shortage, with regional variation
also possible.
The paper provides a brief history of competition relating to the medical professions, and the impact
or potential impact of competition legislation on the RANZCR training programs.
2 Competition legislation
Competition law is governed in Australia by the Competition and Consumer Act 2010, which
superseded the Trade Practices Act 1974. New Zealand is governed by the Commerce Act 1986.
The Competition and Consumer Act 2010 aims ‘to enhance the welfare of Australians through the
promotion of competition and fair trading and provision for consumer protection’. For the purposes of
the Act (Part IV), professionals, including doctors, are considered competitors and are therefore
subject to a range of prohibitions on anti-competitive conduct.
The Act recognises the importance of maintaining a high degree of professional standards. However,
professional associations must ensure that entry requirements are reasonable, and not so onerous
that they create an unnecessary barrier to entry into that profession, thereby limiting competition
within the market. Professional associations, including medical colleges, need to:



Ensure membership rules are transparent and applied equally to all potential members
Ensure the reasons for accreditation or qualification requirements can be substantiated
Check that the rules are not overly restrictive and limit competition
The Act also recognises that complying with the competition provisions may not always be in the
public interest. It therefore allows the Australian Competition and Consumer Commission (ACCC) to
grant protection from legal action for many of the restrictive trade practices provisions of the Act in
certain circumstances. Parties can seek immunity by lodging either an ‘authorisation’ or a
‘notification’. Usually immunity will be granted when the public benefit of proposed arrangements or
conduct outweighs associated detriments.
The New Zealand Commerce Act 1986 largely reflects the Competition and Consumer Act, aiming to
‘promote competition in markets for the long term benefit of consumers’. It is administered by the
Commerce Commission. Section 27 prohibits practises which have the effect of substantially
lessening competition, while Section 29 prohibits the exclusion of competitors from entering and
competing in a market. Like its Australian counterpart, there are avenues for being granted an
authorisation, if the Commission is satisfied that the public benefit outweighs any potential detriment
to competition.
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
3 Medical colleges and competition law
The core competencies of the colleges include conducting training programs and assessing
applications from IMGs. An effect of both these roles is that colleges can determine, and potentially
restrict, the number of practitioners who are able to practise in that specialty. This influence can be
both direct (e.g. when colleges conduct selection processes for trainees or when they assess IMGs),
and indirect, such as when a college determines how many training positions it will accredit at a
facility.
Specialists who are working in the same specialty are considered to be competitors, in that they
compete in providing medical services to members of the public. When acting together under the
auspice of a college to select trainees, assess IMGs or accredit training sites, they are parties to an
agreement among competitors to restrict how many people can practise in that specialty. In some
cases, such restrictions may be considered to have the purpose or effect of substantially lessening
competition, or in some circumstances constitute an exclusionary provision.
In dealing with medical colleges, the ACCC seeks to strike a balance between maintaining high
standards of care and ensuring access to care. The ACCC takes the view that the benefit to the public
will outweigh the detriment if standards are set at an appropriate level – if not, the public will be
disadvantaged by an unjustified and unreasonable reduction in the affordability and availability of
services.
4 The surgeons’ experience
The ACCC, in response to complaints, conducted an investigation of the Royal Australasian College
of Surgeons (RACS) in 1998 and 1999. The investigation focused on entry to advanced surgical
training in orthopaedic surgery and the college’s assessment processes for IMGs. The outcome of the
investigation was that the RACS was advised in 2000 that its processes may be in breach of the Act.
Responding to the ACCC investigation and upon subsequent advice, the RACS informed the ACCC
that they would seek an authorisation. In June 2003, the ACCC granted authorisation to the RACS for
its selection, training and accreditation processes (six years), and their IMG assessment processes
(four years), subject to 21 conditions. The conditions are summarised in Appendix A.
The authorisation acknowledged the important role of the colleges in training and maintaining high
standards of patient care. It also acknowledged that greater public benefit can be derived from
increased transparency, procedural fairness, clarity around accountability and participation of
jurisdictions in the process.
The authorisation required an independent review of hospital training post accreditation and IMG
assessment.
In its draft determination, the ACCC recognised the public benefit of maintaining standards, but also
identified potential areas of public detriment, including:
a. Surgeons involved in the RACS training and assessment processes have a conflict of
interest.
b. College Fellows have the ability to restrict entry into surgical practice. For example the
Commission noted that the Orthopaedic Association ignored training number targets set
by the Australian Medical Workforce Advisory Committee (AMWAC). They also noted
deliberate action taken to delay IMG assessment (multiple interviews at great cost to the
applicant, ‘lost’ information brochures, cancelled interviews).
c.
Interested parties, in particular state and territory governments, had raised sufficient
concerns about the RACS to justify a finding of public detriment.
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
The Commission found that surgery is too important to the community for the selection and training of
surgeons to be left solely to the profession. It also found that standards were often set too high,
creating a barrier to entry. The RACS disputed that it influences entry into practice, but the ACCC
noted that this was “self-evidently what entry standards do”.
The Commission was therefore not satisfied that the public benefit generated by the College’s
application outweighed the public detriment. The conditions imposed were an attempt to ameliorate
the potential public detriment. The RACS objected to the public detriment decision, and iterated that it
did not breach the Trade Practices Act (the predecessor to the Competition and Consumer Act);
however it did indicate that it could comply with most of the conditions. The Australian Consumers
Association considered that the proposed outcomes did not go far enough.
As a warning to other medical colleges, the ACCC indicated that it would investigate ways to remove
the restrictions to entry to the specialist medical colleges, and positively encourage moves for the
establishment of alternative or complementary training programs, which it believed would increase
pressure on existing colleges to improve performance.
5 ACCC review of medical colleges
The ACCC warning to other colleges materialised into a full review of college selection, training and
accreditation processes. The review was announced on 23 April 2004 as a joint exercise of the ACCC
and the Australian Health Workforce Officials Committee, and concluded with a report in July 2005.
The purpose of the review was to ‘explore the extent to which specialist medical colleges are
operating according to the general principles of transparency, accountability, stakeholder participation
and procedural fairness’, which underpinned the ACCC review of the RACS.
In the recommendations to the review of the medical colleges, the ACCC clearly defines its view of
the role of colleges and jurisdictions in workforce and training, noting that workforce consultation
mechanisms:
‘…should reflect that it is jurisdictions’ responsibility to make decisions about national and
state workforce planning to determine optimum workforce numbers and colleges’
responsibility to advise about capacity to train’.
The review found that most colleges were generally adhering to the principles outlined in the RACS
review, or had instituted process changes towards that end. However, concerns remained about the
transparency and objectivity of some processes, particularly accreditation and IMG assessment.
6 Complaints to ACCC in 2004-05
The ACCC received 30 complaints from July 2004 until the publication of its report on medical
colleges in 2005. They related largely to:

Non-recognition of specialist IMG qualifications and experience

Restrictions on training position numbers

Restrictive quotas on college examinations

Consequences of college membership or non-membership
Many complaints related to the apparent inflexibility of college’s assessment processes, whereby
applicants are required to complete further training and assessment, regardless of the specialist
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
qualifications and level of experience gained overseas. Such complaints are predominantly from IMGs
who trained in the UK and USA.
There were also complaints about deliberate restriction of training places, though this seems to relate
to specialties with an entrance examination not allocating places for all who meet the stipulated
requirements.
7 Training numbers
The conditions of the RACS authorisation required annual consultation between the college and the
jurisdictions about the number and distribution of trainees. This recognises the fact that jurisdictions
are responsible for determining the location and volume of health services to be delivered, and should
therefore determine the location and number of workforce and trainees. The ACCC review
acknowledges that, at the time, only the RACS had a coordinated national selection process.
The RACS at the time of the review controlled the selection of basic surgical trainees and accrediting
the hospitals in which they trained. It also controlled the selection of advanced trainees and the
individual posts to be filled. It did not directly control a quota of trainees, though the behaviour of
some groups within RACS implied that there were indirect efforts towards doing so.
Tony Morris QC has observed that the influence of RACS has often been overstated. He claims that
the only real quotas in existence have been from the federal government (via medical school places –
since removed), and the state governments who control the bulk of funding for specialist training
positions. Specialist colleges have tended to support all positions that meet their accreditation criteria.
He notes that many colleges (the RANZCR is not mentioned specifically but training program growth
in radiology and radiation oncology has been considerable) have implemented programs to increase
training positions. Mr Morris reaffirms the ACCC view that the core role of colleges is education and
accreditation.
Justice Mansfield, in his review of competition law and the professions, observed that there can be a
clash between the ideals of competition policy and the practicalities of training medical specialists in
the hospital system, which has many pressures including budgets, workload and infrastructure. One
major risk is that registrars could be viewed by jurisdictions as a cost effective way to meet service
demand, with little thought given to long term workforce planning, such as increased availability of
fellowship and consultant level positions for graduates of the specialist training program.
Discussions about training numbers are perhaps best left at training network level, with direct
involvement of the jurisdictions (who are the fund holders and are presumably best placed to
determine the service demand and training capacity of each facility), leaving the RANZCR to continue
its role as the provider of curricula and standards against which training networks are accredited.
Training networks and jurisdictions should be aware of workforce projections applicable to their
jurisdiction when making decisions about funding and training. This applies not only to trainee
numbers but also staff consultants. This approach is consistent with ACCC recommendations.
The RANZCR accreditation process sets criteria against which applicant hospital departments and
practices are assessed. Determinations are made on the basis of consultant numbers, equipment,
workload and educational opportunities, amongst other things. Facilities are accredited for training
positions based on these educational factors (i.e. the ability of a facility to deliver the curriculum) and
do not include a consideration of national workforce requirements. It is assumed that jurisdictions will
fund an appropriate number of consultant and training positions for their present and projected service
needs. Theoretically, training facilities can collectively be accredited for more training positions than
there is funding for. Therefore, capacity to train and funding for training positions have been the major
determinants of training numbers, rather than any overt or covert influence by the RANZCR. In the
eyes of competition regulators, this is as it should be.
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
8 Recent developments
The ACCC submission to the Senate enquiry into IMG assessment processes indicated some
progress since the review of medical colleges in 2005. From 2005 to 2011, the Commission had
received 72 complaints of alleged anti-competitive practice, and most of these had proved to be not
valid on investigation.
The ACCC provides advice for professional membership associations and their relationship with the
Competition and Consumer Act. They advise that:
It is essential that individual practitioners are fully qualified and accredited to enter into a
profession and undertake their services with the level of skill and knowledge necessary to
perform their duties to a high standard. Therefore, it is an important function of professional
associations that they limit their membership to persons who have fulfilled these prerequisites as this protects not only the interests of the profession but also consumers more
generally.
However, while industry associations may impose minimum membership requirements, they should
ensure that they are reasonable and not so onerous as to create an unnecessary barrier to entry into
that profession. The difficulty lies in determining what is ‘reasonable’.
9 Conclusion
The history of the relationship between specialist training programs and the ACCC indicates that no
real or perceived manipulation of training numbers, beyond the traditional role of the RANZCR as an
assessor of a facility’s ability to provide a good educational environment, would be acceptable to
regulators.
Any suggestion of central planning would need an authorisation from the ACCC or Commerce
Commission to be exempt from the relevant provisions of the Competition and Consumer Act or the
Commerce Act, clearly explaining the public benefit of taking such measures. This approach is not
practicable, given that the RANZCR has no formal involvement in recruitment, the setting of training
numbers and employment at a national, state, local health district/ network or hospital level, and is
unlikely to assume such a role.
Accreditation and IMG assessment processes that are transparent, involve networks and jurisdictions
where appropriate, and have clear criteria should avoid the risk of litigation by an aggrieved party or
investigation by the ACCC. A similar system is encouraged at the level of network training program
recruitment and selection. The RANZCR can encourage hospitals and training networks to discuss
present and future workforce and resource needs with their jurisdictions, before agreeing on the
number of funded training positions each year. . Funding is likely to be the major limiting factor in
further trainee and workforce expansion.
Training positions should be linked not only to projected workforce need, but also to the location of
projected service demand. Jurisdictions should be encouraged to expand training opportunities to
rural origin doctors in rural settings wherever possible, as part of a long term strategy to establish and
retain a sustainable regional and rural workforce.
Those responsible for trainee recruitment (jurisdictions, hospitals, networks) should have a clear
policy on selection and numbers, for example using the Brennan Report framework (see Appendix B).
The training programs in radiology and radiation oncology have experienced significant growth in
recent years. The RANZCR needs to analyse the impact of this growth on the workforce and service
delivery, and also needs to gather information about jurisdictional planning activities. It is likely that,
with numbers of medical graduates and interns still increasing in the next 3-4 years, that pressure on
the medical colleges to expand still further may come to bear. The RANZCR and other colleges, along
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
with Health Workforce Australia, can help jurisdictions determine where training resources are best
directed.
10 Acknowledgments
To Nicholas Bradshaw for researching and writing this report.
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
11 References
Australian Competition and Consumer Commission (ACCC). Review of Australian specialist medical
colleges. Report to Australian health ministers. Australian Health Workforce Officials Committee.
Canberra. 2005.
ACCC. Determination of application for authorisation lodged by the Royal Australasian College of
Surgeons. 30 June 2003.
ACCC. Professions and the Trade Practices Act. Canberra. 2010.
ACCC Professions and the Competition and Consumer Act. Canberra. 2010.
ACCC. Submission 175 to parliamentary inquiry into registration processes and support for overseas
trained doctors. Canberra. November 2011.
Janes H. Competition policy: Consequences of restrictive trade practices and price fixing provisions
for medical practitioners in Australia and New Zealand. J Law Med. 2006. May; 13(4); 439-464.
Mansfield Justice J. Competition law issues for the professions. Federal Court of Australia. 2008.
Martin J. ACCC interface with the medical profession. Presentation to the Fourteenth Annual National
Health Summit 2004. Sydney. 27 October.
Medical Training Review Panel. Trainee selection in Australian medical colleges (Brennan Report).
Canberra. 1998.
Medical Protection Society. Complying with the Commerce Act. New Zealand Casebook Vol 19, Issue
2. 2011.
Morris T. The truth about quotas for medical specialists (opinion piece). Australian Medicine. 5
November 2007.
The Parliament of the Commonwealth of Australia. Lost in the labyrinth: Report on the inquiry into
registration processes and support for overseas trained doctors. House of Representatives Standing
Committee on Health and Ageing. Canberra. 2012.
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
Appendix A: Summary of ACCC conditions imposed in RACS
authorisation

Establish an independent review of the criteria for hospital
accreditation

Introduce more timely accreditation processes

Nominate persons to participate in the assessment of
hospitals for accreditation

Nominate hospitals for accreditation

Nominate persons to participate in IMG assessment

Nominate participants for trainee selection panels

Consult about trainee numbers and distribution

Independent review of the assessment test

Public guidelines consistent with the review on how it
applies the test

Introduce more timely assessment processes

Require written reasons for decisions

Allow re-applications

Publish details of the assessment process annually

Ensure selection processes are consistent with the
Brennan principles

Publish information about selection, training and
examination processes

More information should be provided to unsuccessful
applicants

Appeals Committee should be majority AHMAC reps and
minority FRACS

Amend rules to improve procedural fairness, transparency
and credibility of the appeals process

Develop a consumer consultation policy
Accreditation
RACS should invite Health Ministers to…
International Medical Graduates
Trainee selection
Appeals
Consumers
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
Appendix B: Brennan Report trainee selection framework
1
A clear statement of principles underpinning selection:
a. The aim to select the best possible candidates
b. The objective of producing the best possible practitioners
c. Legal and accountable
2
Eligibility criteria should be clearly stated
3
Advertising: there is to be a national awareness of opportunity for all eligible candidates.
4
Limits to the numbers of training positions
a. If there is a quota, it should be explicit and openly declared
b. Limits relating to other factors such as the number of training positions should also be
disclosed.
5
Applications for training positions should be written in a standardised pro forma.
6
References should be written in a standardise pro forma with a view to achieving objectivity,
comparability and quantification.
7
The selection committee:
a.
b.
c.
d.
e.
8
Should have the confidence of the candidate, the profession and the community;
The size of the committee should be proportional to the task;
Should be prepared to be held accountable for their decision;
Should be prepared for their processes and decisions to be reviewed in other forums;
The selection process should be:
i. valid
ii. reliable
iii. feasible
iv. evaluated
Selection criteria:
a. Should be documented and published; and
b. Must be objective and quantifiable to the greatest possible extent.
9
The conduct of the interview should be objective and free of bias.
10 Selection
a. The selection should be based on the published criteria and principles; and
b. The process should be capable of standing external scrutiny. .
11 Selection committees should score and rank candidates using the tools described.
12 Documentation
a. A record of proceedings should be kept which is sufficient to enable non-participants in
the original selection to accurately re-construct processes and decisions; and
b. Adequate documentation enables external scrutiny, audit and evaluation of the selection
process.
13
There should be a formal, regular, inclusive review of the selection process.
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Medical Colleges and Competition Law
©The Royal Australian and New Zealand College of Radiologists
March 2013
THE ROYAL AUSTRALIAN AND NEW ZEALAND COLLEGE OF RADIOLOGISTS®

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