Taoyuan County Medical Association sent letters to its member clinics, inquiring their opinions and deciding to jointly increase the registration fees, the concerted actions are sufficient to affect the market function of western medicine medical treatment service in Taoyuan County and violated the laws

Chinese Taipei

Case:

Key Words:

registration fee, medical association

Reference:

Fair Trade Commission Decision of June 2, 2005 (the 708th Commissioners' Meeting); Disposition Kung Ch’u Tzu No. 094062

Industry:

Professional Associations (9422)

Relevant Laws:

Article 14 of the Fair Trade Law

Summary:

This case was reported by mass media and briefly stated as: The primary clinics reported that as a result of insufficient medical treatment expenses paid by the Central Health Insurance Bureau and the investment in computer facilities to cope with the data transmission in health insurance IC card, they have encountered difficulties in operations. Therefore, Taoyuan County Medical Association held a meeting and passed a resolution to increase the registration fees to $100 from $50 starting from November 15, 2004. More than five hundred clinics in Taoyuan County simultaneously increased the registration fees in possible violation of the Fair Trade Law. The Fair Trade Commission thus has filed and initiated an investigation about the case.
Upon the investigation, the Fair Trade Commission found that the members of Taoyuan County Medical Association from Taoyuan City, Chunli City and Luchu Town have made requests with Taoyuan Medical Association to increase the registration fees. On October 13, 2004, the Association thus sent letters to 676 member clinics, inquiry their opinions on increasing the registration fees from the original $50 to $100, also provided announcement to increase registration fee (the date and amount were left blank) and suggested that all clinics increase the registration fees. Again, upon the requests of the members, the Association printed the announcement to increase registration with filled date and amount and such printed announcements were given to the members for their uses. The Association has made a decision to increase the registration fee from $50 to $100 starting from November 15, 2004 (the clinics at Chungli City started to increase the registration fees on November 5, 2004). The Association also sent “announcement of registration fee increase” to the members for posting at their respective clinics.
Grounds of disposition and decisions:

In accordance with the explanations of the Department of Health, Executive Yuan, although registration fees are charges collected by medical care institutions, they are not expenses arising from medical treatment and shall be categorized as administrative and management expenses. Such fees are not medical treatment expenses as defined in Article 21 of Medical Care Act and each medical care institution individually determines the standard of collection without the approval of the health competent authority. Therefore, the collection of registration fees is considered within the scope of business discretion of each individual medical care institution. However, in the case that has violated market’s trading order or fair competition, the Fair Trade Law is applicable.
Due to its guiding position, Taoyuan County Medical Association has sent letters to its member clinics to inquire their opinions on whether to increase registration fees and the amount to be increased, then, the responses of members were collected and arranged to decide the date and amount for the registration fee increase, actively promoted all clinics to increase the registration fees together, restrained the members’ freedom of business discretion and lead to restricted competition. Although the Association indicated that the Association only made suggestion to its members to increase the fees but did not compel them to follow it. However, in accordance with the Fair Trade Law, the term concerted action refers to conduct that either uses contract or agreement to achieve mutual understanding, in addition to this, the means also include other form of mutual understanding, that is, a meeting of minds that would in effect lead to a joint action. Also, the medical care institutions decided to increase registration fees to reflect the operating costs, such conducts are considered as business discretion of medical care institutions and each medical care institution shall adjust its own charges individually. But, the content and subject in the letter sent by the Association was written as “the members have inquired the Association recently if they can increase the registration fees for clinics visit from the original $50 to $100 in order to cope with the increase of cost of living and cost of personnel.” As a result of some members’ claiming that the registration fee should be increased, the Association thus has sent out letters to inquire the members’ opinions on this issue and at the same time also suggested that they increase the registration fees. Also, the Association has provided its members “announcement to increase registration fee” that is printed with the effective date and amount to be increased of which the members can use to post at their clinics. It is clear that as a result of the goal of jointly increases the registration fee; the business activities of the members are in fact being restrained.
In accordance with the provision of Article 9 (1) of the Physicians Act, “Practicing physicians shall join the local medical association.” Therefore, all physicians who are currently practicing in Taoyuan County are members of Taoyuan County Medical Association. There are 34 hospitals and 676 clinics in Taoyuan County that can provide western medicine medical treatment services. Taoyuan County Medical Association sent mails to 676 member clinics suggesting that they increase the registration fees and restraining the members’ freedom in business operations. Such act is sufficient to affect the clinics’, in Taoyuan County , freedom to determine their own registration fees. Also, the Association, by suggesting that its member clinics increase their registration fees from $50 to $100 starting from November 15, 2004 (the clinics at Chungli City started to increase the registration fees on November 5, 2004), restraining the clinics’ freedom to determine the amount of their registration fees, leading to a uniform registration fees among the member clinics and the choices for general public are thus lessened; therefore, the function of market competition is weakened, and, such an act is sufficient to influence the supply and demand function of western medicine medical treatment services market in Taoyuan County.
The act of Taoyuan County Medical Association to jointly increase the registration fees has met the definition of concerted action as defined in Article 7 of the Fair Trade Law eriousnessand therefore is in violation of the provision of Article 14 (1) of the Fair Trade Law. After taking into account the motive, purpose of the illegal acts of the Association, anticipated improper profits, the degree and duration of the acts’ harm to trading order, benefits derived from the acts, scale of operations, operating condition, market position, past violations, substantial evidence of repentance after being found in violation and the cooperativeness during the investigations, also taking into consideration the leading position of the punished in Taoyuan County’s western medicine medical treatment service market and the seriousness of damages of its illegal conducts on trading order, therefore, an administrative fine of NTD 3 million is imposed in accordance with the forepart of Article 41 of the Fair Trade Law.

Summarized by Feng, Yu-Wei;
Supervised by Lu, Li-Na

Appendix:

Taoyuan County Medical Association’s Uniform Invoice Number: 43794634

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