Confidence Goods 7

Three letters on the ST Forum today on the SMA's decision to withdrawal its guidelines of fees.

Dr Lim Boon Hee predicts that "[n]ow that the Singapore Medical Association has withdrawn guidelines on medical fees for fear of contravening the Competition Act, the situation is set to worsen," and advises patients: "Do not assume anything to be free and you won't go far wrong in this free market where the difference to your pocket can be a matter of thousands of dollars."

Mr Lim suggests that clinics "should clearly display their general charges at the door or outside the clinic so that patients will know the cost before entering the clinic and not when they are in the clinic seeing the doctor," presumably sparing both sides from unnecessary embarrassment.

The most interesting letter amongst the three, in angry doc's opinion, was however relegated to the online forum:


Competition Act should exclude medical services

I READ with dismay that the SMA is withdrawing fee guidelines for doctors as the guide could be in contravention of the recently enacted competition code, 'Private docs can set own fees as SMA drops guidelines' (ST, April 3).

Competition is not an ends in itself. The intent of the Competition Act is to let consumers benefit from more choices, lower prices and better products and services when businesses compete. Therefore, in assessing possible restraints on competition, the Competition Commission should examine the market from the point of view of the consumer.

Would doing away with SMA guidelines promote or hinder consumers' interest? I think the latter.

Health care is not like normal goods and services, the sick cannot shop around. And for health-care providers, the quality of care does not (and should not) be affected by economic incentives.

Section 34 of the Act prohibits agreements which prevent, restrict or distort competition. I cannot see how there is an appreciable anti-competitive effect by having guidelines on doctors' fees.

It should also be noted that the fee guide was implemented to inject transparency into private medical charges. By scrapping the fee guide, is the SMA regressing on the need for transparency and, in doing so, give private doctors the liberty to overcharge?

Currently, certain activities and sectors are excluded from the Act. These include postal services, portable water, bus services, rail services, activities of 'net economic benefit' and those 'arising from exceptional or compelling reasons of public policy'. The exclusion of some of these sectors is based on public interest considerations.

It is arguably in the public interest to exempt health care from the Competition Act. At the very least, the commission should give industry-specific regulators like the SMA with their industry knowledge and expertise, the mandate to handle issues such as the guidelines on doctors' fees.

Faye Chiam Pui Hoon (Miss)


Unlike Ms Chiam, angry doc does consider SMA's guidelines an attempt at price-fixing and reducing competition between doctors.

But like Ms Chiam, angry doc believes competition should not be an end in itself.

As with almost everything it is important to look at how general concepts apply to a specific context. The form of competition the guidelines were aimed at discouraging was one based completely on price alone, with no regard to the quality of care being delivered, and which threatened patient-care.

Of course, the guidelines are not the only way to achieve this (nor, come to think of it, a very successful method so far); the Ministry's planned data on the range of fees charged by doctors will likely serve the same purpose.

What angry doc finds sad in this ongoing media drama is that almost all the focus has been on the virtues of competition and how it will reduce costs, with no understanding of the fact that sometimes, cheaper simply means worse.