Is the RACGP about to run foul of the ACCC?

The RACGP's changes to the next triennium have GP educators up in arms

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While few people doubt that the RACGP’s changes to its QI&CPD program for the next triennium are well meant, many are seriously questioning how much thought has been given to the many commercial third parties that will be adversely affected by the proposed changes.

It’s an open secret that both the AMA and the RACGP have been on the nose with the ACCC for many years based on various behaviours that walk the line of misuse of substantial market power.

A key problem for the RACGP now is going to be whether their changes are going to survive the ACCC’s “misuse of market power test”.

Three key criteria are considered in the test:

• Does a company have substantial market power? Don’t think even the RACGP will try to argue this one.
• Is it taking advantage of that market power? Several commercial providers contacted by The Medical Republic about the changes strongly believe so, rightly or wrongly.
• Is it using the power for an illegal purpose?

The crux of a case would likely lie in interpretation of the last part of the test.

The RACGP without doubt has market power.  Substantial market power. If it didn’t, then most the room of education providers getting a briefing yesterday from the RACGP on the changes wouldn’t be up in arms like waterside workers at a 1970s union meeting.

Many NGO providers and commercial providers have told TMR point blank that the changes could ruin them, particularly the NGOs, or substantially impact their businesses downwards. There are a lot of angry education providers out there.

But hardly any will go on the record. Why is that? They don’t want to be identified by the RACGP in case that affects their accreditation in some way is one answer.  Which could point to an organisation with too much market power, that wittingly or not, is taking advantage of it.

Said one major commercial provider who did not want to be named, “its plan is all about them and there’s no consideration all of us, who have built businesses around providing education”.

“They don’t consult with anyone. They just turn up and wham… half your business is gone, and guess where it’s going, to them. How is that fair?”

Another major commercial provider, who told TMR they had already penned their ACCC complaint, said “They are setting the rules and then profiting from them. At least last time they put out a draft paper and did some consultation. This time, nothing. Three months to the start and they tell us they are going to wreck our business.”

Following are some of the changes proposed and why the providers are upset:

• The number of category one programs that can be provided by commercial suppliers outside of the RACGP, has been effectively halved, from about 50,000 to 25,000, with the 25,000 reduction being incorporated largely into the College’s new compulsory category 1 PLAN module, a precursor to the revalidation program. This effectively replaces QI activities which were previously available to commercial entities to produce and now aren’t. And it means that anyone who’s spent money building up IP around doing clinical audits and small group learning modules, will take a significant hit.

For the Australian Doctor Medical Education group and the General Practice Conference and Exhibition, both of which conduct 40 point programs in small learning groups, that is a substantial part of their yearly revenues – in the millions of dollars. If someone did that in the banking market, people would be hung by the regulators.

• The College has introduced a new fee for providers of $2 per person completing CPD programs for uploading to the College central database for reporting. All education providers already pay an accreditation fee. This looks an awful lot like double dipping and it feels like it would be very hard to justify to a market regulator. In the case of some NGOs, they have said the additional cost may put them out of business. Apparently NPS MedicineWise said it might cost their organisation up to $50,000. Quite apart from the commercial hit to everyone such a fee would create and the windfall profit it would create for the RACGP – it could mean anything upwards of an additional $500,000 in revenue for the college with no additional cost – it appears that the move could cause serious and systemic collateral damage to the whole Australian GP education system by knocking out the NGO providers who traditionally have picked up the slack in education in areas which are not funded by the pharmaceutical companies. This could significantly weight education in the future in a manner that would not be good for GPs or patients.
• Through the new PLAN program the college is now forcing the collection of detailed customer data that it is denying access to for most of its competitors in providing education. What they are going to do with that data, is one issue for some of the providers. Already they have said that they are going to use the data to direct GPs on their own site to learning that will fill gaps in their knowledge. The question for other providers is, what governance is in place to prevent the College from directing GPs first to their material, or, from using the data to optimise how they develop and provide their own education material. It is a clear competitive advantage they have , perhaps without thinking enough about it, created for themselves. It seems very unfair that the RACGP is the sole owner of this data because they don’t just run GP compliance, they compete in providing education. All other providers will be significantly at a disadvantage commercially as a result of the PLAN data.

Several providers contacted by TMR have said they were going to complain to the RACGP, but some are planning on talking to the ACCC.

If the ACCC listens and picks up the case, the key test will likely be “illegal purpose”.

As the ACCC site states, “it is not illegal to have market power and use it”. The ACC test says that “illegal purpose” follows:

• Eliminating or substantially damaging a competitor – unfortunately for the RACGP, this seems very much to be likely to happen. The College is both the compliance provider, setting the rules, and competes with many of these commercial providers in providing education, something that many people have thought is too much conflict for a long time.
• Preventing entry of a person into that or any other market – feels awfully like this might be the case if the RACGP is locking out half the previously available category-one market.
• Deterring or preventing a person from engaging in competitive conduct in any market – eeek. Feels again like this could feasibly get up. But we aren’t lawyers.

On spec, this looks like a screw up. The RACGP aren’t wily business people trying to make more money by manipulating the market – although you could argue that they are taking the chance to shore up their finances here with a few additional measures. They do stand to make nearly up to $1m in new fees, not including if they are getting money for the 25,000 PLANs that will be done by GPs directly with them.

They are probably trying in good faith to improve the quality of GPs by having some form of reflection, and later perhaps even, peer review (this was mooted at the meeting yesterday as well). The intention is good. The execution looks awful.