Competition Authority warns IMO on negotiations

The Competition Authority has warned that any negotiations between the Government and the Irish Medical Organisation (IMO) over the fees charged to the State for medical cards issued on grounds of age could be in breach of competition law.

Taoiseach Brian Cowen announced last Friday the Government would hold discussions with the IMO on the issue. The Government wants to renegotiate the terms of the scheme with the IMO to reduce the current €640 payment to doctors for looking after patients over 70 who received their medical card on age rather than means grounds.

Minister for Health Mary Harney said today that while the Government was not in a position to negotiate with the IMO due to competition law, it could hold consultations.

"The Government is free, however, to consult people and talk to people, that's a different thing," she said. "The Government has to be mindful, and is mindful, of European and Irish law in this regard."

However, Dr Stanley Wong, director of the Competition Authority's monopolies division said any such talks could be in breach of Irish and European competition laws as independent businesses or their representatives were legally barred from engaging in collective bargaining.

He said the Government is free to negotiate as - not being a legal undertaking or business - it is not subject to competition law. However, the IMO and GPs, as undertakings, are bound by competition law and are restricted in what they can or cannot do in terms of negotiations.

He said were the IMO to put forward propositions at the negotiating table, there would be "serious concerns" as to whether or not they were in breach of competition law. This would depend on the nature of the talks.

"Minister Harney said that were she to consult with the doctors, and they decided that this would be the new fee, then if it was a true consultation, then there would be no issue with the Competition Act," Dr Wong told RTE's News At One.

"The problem is that the Irish and European laws say that independent businesses cannot collectively negotiate. That is the law."

Over the last year Ms Harney has said legal advice to the Department of Health had identified significant competition and procurement law issues which prevented the State from entering into negotiations with representative bodies for self-employed professionals to develop contracts for services and to determine the associated fee arrangements.

The Minister said under existing legislation the State could negotiate on price individually with each professional. However, with more than 2,000 GPs holding contracts with the State, this was not practical.

Labour Party leader Eamon Gilmore said today the Government had "only itself to blame" for the current situation.

"The latest problem in regard to competition law is just another indication of the extent to which the Government failed to think through its budget proposals," Mr Gilmore said.

"Brian Cowen and Brian Lenihan totally misjudged the mood of the country and the mood of their own backbenchers," he said. "They brought to the Dail a budget that they are now clearly incapable of getting through the House. In virtually any other country such a miscalculation would have led to resignations."