Confidence Goods 6

Somebody hold angry doc back, because this really makes him angry (emphasis mine).


Competition Commission partners CASE to monitor pricing

SINGAPORE: Price-fixing by companies or industry associations may soon be a thing of the past.

CASE, the consumer watchdog, will get extra help from the Competition Commission of Singapore (CCS) to take action against businesses which charge uncompetitive prices.

CCS is a regulator of price-fixing and it announced on Thursday that it will support CASE to monitor and possibly take violating companies to task.

After the Singapore Medical Association (SMA) withdrew guidelines on 1 April, doctors can now charge patients freely, according to their business costs.

In a letter to its members, SMA said it had been advised by its legal advisors that its fee guidelines contravened the Competition Act.

At an off-camera briefing, the CCS said although it has not accused SMA of price-fixing, the association’s fee guidelines, which had been in place for the past 20 years, can stifle market forces and harm consumers by reducing choice.

And these guidelines send a signal to market players, in this case – the doctors, to price their services in a narrow range, even if it does not eventually lead to price-fixing.

The commission expects visits to the doctor to be potentially cheaper in the long run.

All that is left to do is to wait for the market to adjust to the new changes.

But should there be cases of overcharging, the CCS will work with CASE to monitor and correct any exorbitant rise in doctors' fees.

CASE Executive Director Seah Seng Choon said he looks forward to working with the commission to facilitate solutions to consumers' complaints on uncompetitive pricing and practices.

Following SMA's recent withdrawal, Healthway Medical Group, which has a network of 40 clinics, has said it has no plans to raise its fees and will maintain it within the withdrawn guidelines.


Sure it may be cheaper to see a doctor after the guidelines are withdrawn, but this is not about the guidelines anymore. Rather, it is about the insinuation that the idea behind the guidelines was cartelism, and that the CCS was the good guy here protecting all patients from us greedy doctors who have been conspiring to overcharge them all along.

Cheaper does not always mean better, and unlike with a cup of coffee or a plate of chicken-rice the consumer here cannot always tell the quality of the goods he has received. Choice means little when consumers cannot discern quality, and market forces do not always work to the benefit of consumers.

The guidelines may have been an attempt by SMA at price-fixing, but as angry doc understood it they were never conceived as a means to maintain consultation fees at an artificially high rate and to benefit the doctors at the expense of patients, but rather as a common reference point to reduce the prevalence of undercutting amongst GPs, which was threatening to compromise the quality of care being given.

To blindly pursue free market, consumer choice, and lower prices without understanding that medicine is a confidence goods is to do all parties concerned a disservice.

Or, as Colonel Jessep would put it:

"You put people's lives in danger. Sweet dreams, son."