Clinics in the neighborhood of Zhongli Train Station

1318th Commissioners' Meeting (2017)

Case:

The clinics in the neighborhood of Zhongli Train Station were complained for their violation of the Fair Trade Law by jointly raising registration fees

Keyword(s):

Registration fee, clinic, medical institution

Reference:

Fair Trade Commission Decision of February 8, 2017 (the 1318th Commissioners' Meeting)

Industry:

Clinic Activities (8620)

Relevant Law(s):

Article 14(1) and 15 of the Fair Trade Law

Summary:

1. The media reported that the clinics in the neighborhood of Zhongli Train Station jointly raised their registration fees. After visiting the clinics and confirming the raises, the Department of Public Health of Taoyuan City Government sent a written request to the FTC and asked the FTC to investigate the matter.
2. Findings of the FTC after investigation: The clinics the Department of Public Health of Taoyuan City Government asked the FTC to investigate included nine clinics respectively specializing in family medicine, pediatrics and otolaryngology. Between Feb. 2 and Apr. 1, 2016, Huang Wenchang Clinic and five others did raise their registration fees from NT$100 to NT$150. The other three clinics charging between NT$50 and NT$100 for registration made no raises. According to the list provided by the Taoyuan City Government, there were 486 medical institutions, respectively specializing in pediatrics, general medicine, family medicine and otolaryngology, in the ten districts in the city, including 136 in Zhongli District. Meanwhile, the statistics on the website of the Ministry of Health and Welfare showed that 10,161,941 registrations were made to see doctors of pediatrics, general medicine, family medicine and otolaryngology in Taoyuan City in 2014 and the six clinics in question together saw about 210,000 patients per year.
3. Grounds for non-disposition:
   (1) Market definition: Huang Wenchang Clinic and the five other clinics offered medical services in pediatrics, general medicine and otolaryngology. They treated adults and children with common colds, sore throats, and ear and nose discomfort. From patientsangle, the substitutability of medical services in pediatrics, general medicine, family medicine and otolaryngology existed. Therefore, in this case the product market was defined as the provision of"medical services in pediatrics, general medicine, family medicine and otolaryngology." Meanwhile, the medical services of the six clinics were available to all the people living in the ten districts of Taoyuan City. Patientschoice of medical institutions for their need of medical care was highly regionally oriented. However, as the districts in Taoyuan City were close to one another and the transportation in Taoyuan City was convenient, the geographic market was defined as the ten districts in Taoyuan City, including Zhongli District.
   (2)Huang Wenchang Clinic and the five other clinics did increase their registration fees from NT$100 to NT$150 between Feb. and Apr. 2016. The raises were all NT$50. However, besides Ma Xinghua Clinic and Zhongxin Pediatric Clinic happened to make their adjustments of registration fees on Apr. 1, the raises of the other clinics were made at different points of time in the above two-month period. Hence, the registration fee adjustments were not made at the same time and it was difficult to consider the clinics in question as engaging in a concerted action.
   (3) The operators of the six clinics expressed that they had decided to make the registration fee adjustments to reflect the increases in personnel cost, utility expenses and medical equipment cost. Lin Guokui Pediatric Clinic particularly mentioned that specialized personnel were needed in their provision of pediatric care. The management cost was therefore higher than that of other types of clinics and the registration fee raise had been made to assure its high quality of pediatric care could be maintained. The increase had not been made along with other clinics. In other words, the six clinics had raised their registration fees because of their cost increases and management considerations. Both were financially justifiable. In addition, the quality of medical services, including medical techniques, effectiveness of treatments, medical equipment, location convenience, etc., was the main concern for patients. For patients, the registration fee was only one of the many factors to be considered and its influence on their choices of clinics varied with people. If the registration fees of all medical institutions were the same, non-price competition on the overall medical service quality would be even more obvious.
   (4) There were many medical institutions in the area in question. Huang Wenchang Clinic and the five other clinics merely accounted for 1.23% of the medical institutions in the area, or 4.41% of the total number of medical institutions in Zhongli District. In the meantime, the 210,000 patients the six clinics in question saw in 2014 only accounted for 2.06% of the total number of registrations made to seek medical care in Taoyuan City in the same year. Such a small percentage made it impossible to consider the registration fee adjustment made by the six clinics could have any impact on the supply-demand function in the"pediatric, general medicine, family medicine and otolaryngological medical service" market in Taoyuan City.
   (5) According to the facts it found out in the above, the FTC concluded that the registration fee adjustments made by Huang Wenchang Clinic and the five other clinics did not involve any illegal concerted action that could have an effect on the"pediatric, general medicine, family medicine and otolaryngological medical service" market in Taoyuan City.