The Commerce Commission has warned several Lower Hutt doctors that, in the Commission's opinion, their attempted collective agreement to pay midwives specified rates is a form of price fixing and risks breaching the Commerce Act.
Commission Chairman Dr Alan Bollard said that the Act prohibits people getting together to agree on the prices they will charge.
The doctors had agreed that when a doctor was responsible for a woman's maternity care and the woman also used a midwife, then standard fees set collectively by the doctors would be paid to the midwife.
Dr Bollard said that the Commission has advised the doctors that under the Act, it is up to the doctor and midwife involved to agree on the fees. For groups of either doctors or midwives to get together and agree on standard prices is, in the Commission's view, price fixing.
He advised anyone who thinks they might have inadvertently breached the Act to contact the Commission.
He also advised any individuals or organisations considering forming alliances to get legal advice.
"Lawyers specialising in this area will be able to advise parties whether their proposed arrangements are at risk of breaching the Act," Dr Bollard said. "It is then up to the people involved to organise their businesses as they see fit so that they do not breach the Act."
Under current maternity arrangements a pregnant woman chooses who will be her lead maternity carer, and the lead maternity carer receives the government maternity subsidy. If other health professionals are involved, then the lead maternity carer pays them from the subsidy.
The issue in Lower Hutt centres on how the lead maternity carer and any other health professionals involved should decide the level of payments.
The Commerce Act prohibits collusion among individuals and groups to fix prices. The fees paid should be decided by the people involved, based on whatever factors they consider to be appropriate to the circumstances of the women they are caring for. Groups of doctors, midwives or other health professionals risk breaching the Act if they collectively try to impose standard fees.
"Health is one of the areas of special focus identified by the Commission in its Annual Plan for this financial year," Dr Bollard said. "This is a $7 billion a year industry, and our involvement with it shows that its awareness of the Commerce Act is poor.
"We are aiming to educate the industry as a whole. Also, we will investigate matters as necessary. When we find people or organisations at risk of breaching the Act, we will issue warnings or enter into settlements so that they can change their behaviour to prevent a possible breach.
"Serious or repeated breaches may result in court action."
