health inside: Unhealthy conduct Unhealthy conduct edoctoring Warning in your waiting room Victorian Government announces new public hospitals policy

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1 health Welcome to our latest issue of Focus on Health. inside: Unhealthy conduct edoctoring Warning in your waiting room Victorian Government announces new public hospitals policy Bringing ADH out of the sock drawer The ACCC has targeted the health industry over the last few years. As trade practices lawyer Carolyn Oddie points out in her article, good strategic planning can keep the consumer watchdog happy. Our article on ehealth shows how medical providers need to anticipate legal hurdles. To use a health analogy legal prevention is usually better than a courtroom cure. Adam Thatcher is Practice Leader of the National Health Practice. Telephone: (07) Adam.Thatcher@allens.com.au Unhealthy conduct Carolyn Oddie discusses the consequences of anti-competitive conduct within the health industry. The Australian Competition & Consumer Commission (ACCC) has targeted the health sector over the last couple of years as a priority area, taking action to prevent what it sees as anticompetitive conduct. High risk areas for the health sector include allegations of price fixing, exclusive dealing and misleading and deceptive conduct. Health sector organisations should be alert to trade practices risks and implement compliance initiatives to avoid problems. Collective action that results in price fixing or refusals to deal (boycotts) is strictly prohibited by the Trade Practices Act. Pecuniary penalties of up to $10 million per breach for a company and $500,000 for individuals apply.

2 However, there are procedures for authorisation and notification of conduct which can enable businesses to obtain immunity from prosecution as a result of engaging in some anti-competitive practices, if the ACCC considers that the public benefit of the conduct outweighs its anticompetitive detriment. Taking advantage of these provisions requires forethought. In 1998 the ACCC settled proceedings it had brought against the Australian Society of Anaesthetists and four individual anaesthetists for price fixing. The ACCC alleged that with the assistance of the Society, anaesthetists at three private hospitals collectively agreed to charge a fee of $25 an hour for on call services. Some of the anaesthetists also unlawfully agreed not to supply services to a particular private hospital unless it agreed to pay the fee for on call services. After this case, the Society applied to the ACCC for authorisation to collectively negotiate rates and conditions for anaesthetic services on behalf of its members, but the application was rejected by the Commission. The ACCC said that the proposal would be likely to lead to a floor price for anaesthetic services, which would be anti-competitive. Health sector organistations should be alert to trade practices risks and implement compliance initiatives to avoid problems. In June 2000 an application by three private hospitals for authorisation to enter into an arrangement to act together in their negotiations with health insurance funds on reimbursement levels for health fund members was rejected. The Commission found that since the hospitals competed for patients, the proposed arrangement would lead to a lessening of competition in the hospital services patient market. It also considered that there would be anti-competitive detriment in the private hospital health insurance market, because of the likely impact on health insurance premiums. Exclusive dealing conduct also poses a high risk in the health sector. There are a number of different forms of exclusive dealing which are illegal if they have the effect of substantially lessening competition in a market. An example of this sort of conduct may be the supply of goods or the offer of a discount on condition that the purchaser will not acquire goods from a competitor of the supplier. However, third line forcing - the supply of goods or services on condition that the consumer acquires goods or services from a particular third party, or a refusal to supply because the consumer will not accept that condition, is strictly prohibited in Australia regardless of its effect on competition, unless it is notified. A health insurer, Health Partners Incorporated which offered Chem-Mart participant pharmacies retail discounts and prescription benefits, was found to have engaged in unlawful exclusive dealing in terminating a contract with an Adelaide pharmacy because the pharmacy had left the Chem-Mart pharmacy chain. Similar issues can arise where organisations require medical practitioners to be accredited by a particular Association before they will be appointed. In a climate where the ACCC has a priority focus on the health care sector, businesses need to remain alert to trade practices risks and implement compliance initiatives to avoid problems and benefit where possible from the protections built into the notification and authorisation system. Carolyn Oddie is a Trade Practices Partner. Telephone: (02) Carolyn.Oddie@allens.com.au What is anti-competitive conduct? Four high risk areas for the health industry: u price fixing u exclusive dealing u third line forcing u misleading and deceptive conduct

3 Victorian Government announces new public hospitals policy David McLeish outlines the Victorian Government s initiative recently published Victoria- Public Hospitals Policy and Funding Guidelines Major capital infrastructure projects The Bracks Government has committed to undertaking various capital infrastructure projects, including: the major redevelopment of the Austin & Repatriation Medical Centre, which includes the relocation of the Mercy Hospital for Women from its current site in East Melbourne to the Austin site; a major redevelopment of the Royal Women s Hospital (which will include the redevelopment of the emergency department, operating theatres and day procedures unit, birthing suites and neo-natal intensive care units); the expansion of the Frankston Hospital to provide a new 60 bed general adult ward; and the completion of the development at the Sunshine Hospital (which includes the fitout of the medical and surgical wards and the construction of new operating theatres). Austin & Repatriation Medical Centre project The Austin & Repatriation Medical Centre redevelopment and the Mercy Hospital for Women relocation is clearly the most significant project proposed by the Bracks Government, and represents the largest infrastructure project undertaken in the health sector in Victoria in recent years. The project involves: the reconfiguration of the Austin site to accommodate all acute inpatient services and surgery. This will include the 440 new inpatient beds, a new emergency department and new intensive care and critical care units; the centralisation of ambulatory, non-acute and psychiatric services on the Repatriation site; the development of a teaching, training and research precinct; and the relocation of the Mercy Hospital for Women to a new purpose-built facility on the Austin site. The Kennett Government had earmarked the Austin redevelopment as one of the State hospital projects for which private sector involvement would be sought. However the Bracks Government, as part of its investing not selling policy, has announced the bulk of the project will be publicly funded. The Government has allocated $320 million to the project. Private sector involvement is limited to a $25million carpark and half the cost of the teaching, training and research facility. The Government has announced that the planning phase for the project will be completed by April 2001, and that construction and commissioning will be completed by January David McLeish is an Infrastructure Partner. Telephone: (03) David.Mcleish@arh.com.au

4 edoctoring What are some of the legal risks involved in ehealth? Lorien Beazley provides some senarios. Online information Your online brochure on breast cancer is out of date and a patient relies on this information What is the difference between publishing a pamphlet on breast cancer and putting the information on a web site? Both will attempt to disclaim all liability for the information contained in that brochure and both will recommend visiting their doctor if they have any concerns. The Federal Trade Practices Act (TPA) implies certain warranties and conditions that are impossible to contract out of. The protection extends to providing services, including information, in a manner that is not unconscionable, misleading or deceptive. Unlike a website however, a brochure is a static document. While there will always be an obligation to ensure the most current version of the brochure is available, the existence of the out of date brochure is acceptable Unlike a brochure, a website is a dynamic information source. Users expect the information in a website to be up to date and correct. Under the TPA there is a responsibility to remove out of date content from a website. It is imperative that all content on all websites is kept up to date and failure to do so may attract fines from the ACCC. When are practitioners engaging in the practice of medicine? Your inhouse specialist is giving advice online from a hospital in Surfers Paradise to a patient in Byron Bay but she is not registered to practise medicine in New South Wales No medical practitioner can practise medicine in a State without being registered under the local laws to practise in that State. The State laws in Australia do not provide a clear definition of what constitutes the practice of medicine. However, there is some guidance in some of the State laws about the scope of practice : Medical Practitioners Act 1983 (SA) defines medical treatment (for the purposes of the u requirement to be registered) to include all medical or surgical advice, attendances, services, procedures and operations. Medical Practice Act 1992 (NSW) refers to the advertising of medical services and states that a person advertises medical services if the person advertises himself or herself to be entitled, qualified, able or willing to give or perform any medical or surgical advice, service, attendance or operation. Medical Practitioners Act 1930 (ACT) defines the provision of a medical service as medical service, attendance, operation or advice. Clearly giving advice online to a patient could amount to the practice of medicine and registration may be required. Where does the practice of medicine take place? If the medical practitioner is found to be practising medicine online, where does the practice of medicine occur? It is unresolved whether the practice of medicine takes place where the doctor is or where the patient is. Early statements issued by the Medical Boards have indicated that the practice of medicine will take place where the patient is situated. This would mean that a person wanting to practise medicine online should ensure he or she is registered in the State where the patient is. This may also have insurance implications. The verdict The issues highlighted above are merely indicative of only a few issues surrounding the emergence of ehealth. There are many unresolved and significant risks that need to be considered. Planning and forethought are important. Lorien Beazley is an ehealth specialist and Senior Associate. Telephone: (07) Lorien.Beazley@allens.com.au

5 Warning in your waiting room John Baartz discusses two recent NSW decisions. The first relates to the duty of hospitals to persuade patients not to leave the hospital until they are treated. The second discusses the consequences of failing to warn patients of post-operative risks. The decision of Sha Cheng Wang v Central Sydney Area Health Service, which concerns the failure by hospital staff to attempt to persuade a patient not to leave the emergency department before receiving treatment has potentially serious implications for the Health industry. In Wang v CSAHS, Wang was taken by friends to the emergency department of a hospital with head injuries. Wang was examined by a nurse for the purpose of placing Wang on a patient priority list. The nurse decided that Wang did not require immediate treatment and, consequently, she had Wang sit in the waiting area, where she could observe any deterioration in his condition. After some time, Wang s friends approached another nurse and told her that Wang s condition was dangerous and that he needed to be seen by a doctor promptly. The nurse replied that the department was very busy and Wang would have to wait. Wang s friends then asked the nurse whether they could take Wang to another hospital and she replied that they could do whatever they wanted. The expert evidence at trial established that had Wang been treated at the hospital he would most likely have recovered. Wang was then examined by a doctor at a medical clinic, who told Wang that he should return to the hospital. Instead, Wang returned home to rest. During the night Wang began to vomit and convulse. Wang was taken by ambulance to a hospital where he underwent surgery. At this stage, however, it was too late to effectively remedy the plaintiff s inter-cranial bleeding and he suffered brain damage. The expert evidence at trial established that had Wang been treated at the hospital he would most likely have recovered. Whilst the judge did not find the hospital negligent for failing to afford greater priority to Wang, he did find that the hospital was negligent for failing to attempt to persuade Wang to stay at the hospital until he was treated by a doctor. Failing that, staff should have tried to ensure that Wang sought alternative medical care. This next case reinforces the duty on hospitals to attempt to persuade patients not to leave the hospital until they are treated. The decision was that of Bourke v MacNeil which concerns the failure of a surgeon to warn about possible post-operative complications. In Bourke v MacNeil, Dr MacNeil, a highly qualified specialist general surgeon, performed a Nissen Fundoplication operation on the plaintiff, Bourke, to relieve a condition of oesophageal reflux. Bourke alleged that Dr MacNeil did not adequately warn him of the material risks associated with the operation, and in particular the risk of post fundoplication syndrome (PFS). The main issue before the Court of Appeal was whether Bourke suffered from PFS. Unless he did, even accepting that Dr MacNeil should have given the warning, the negligence in failing to warn could not be said to have caused the subsequent medical condition from which Bourke suffered. The Court of Appeal held that Bourke had not discharged the onus of proving that he suffered from PFS. The Court of Appeal made its decision primarily on the basis of compelling statements by a number of medical witnesses, to the effect that Bourke was not suffering from PFS. However whilst Dr MacNeil successfully defended Bourke s claim on the basis of the evidence presented at trial, the case nevertheless reinforces the duty on doctors to adequately warn patients of the risks associated with medical procedures. This duty requires doctors to disclose any risk which, although small, is of such a nature that a reasonable person in the patient s position would be likely to attach significance to it. John Baartz is a Medico-Legal and Insurance Partner. Telephone (07) John.Baartz@allens.com.au

6 THIS NEWS SHEET IS INTENDED ONLY TO PROVIDE AN ALERT SERVICE ON MATTERS OF CONCERN OR INTEREST TO READERS. IT DOES NOT PURPORT TO BE COMPREHENSIVE ADVICE. Bringing AHD out of the sock drawer Glenys Hodges comments on the reluctance of patients and health care professionals to document future health care direction. GROUP AND ASSOCIATED OFFICES ALLEN ALLEN & HEMSLEY SYDNEY BRISBANE GOLD COAST ARTHUR ROBINSON & HEDDERWICKS MELBOURNE PERTH PHNOM PENH FINLAYSONS ADELAIDE ALLENS ARTHUR ROBINSON SINGAPORE & INDONESIA SHANGHAI HONG KONG JAKARTA PORT MORESBY SIAM PREMIER INTERNATIONAL LAW OFFICE LIMITED BANGKOK VISIT OUR WEBSITES The advance health directive (AHD) is a legal document under the Powers of Attorney Act (Qld) containing directions for and information about a person s future health care and special health care. Health care covers the full range of medical and health care and treatment except special health care which covers specific matters including organ donation, sterilisation, psychiatric treatment and withholding or withdrawal of lifesustaining measures. The AHD only operates while the person has impaired capacity. AHDs are endorsed enthusiastically in principle by almost all doctors and other health care providers and a great majority of the general public. However this enthusiasm does not seem to translate into practice and research in other countries raises doubt about the ability of the AHD to influence care in the great majority of cases. In the USA since 1991 there has been federal legislation requiring hospitals and health care institutions to give patients written information about an AHD upon admission. Staff must be given educational programs on the legal and medical issues concerning AHDs. These requirements are a prerequisite for eligibility for government medical funding. Despite this, statistics suggest that only 10-15% of the population of the USA have an AHD. Anecdotal evidence also suggests that perhaps a majority of those AHDs that are made, are never called into use because they are left in lawyers offices, safe deposit boxes or sock drawers. It is too soon since the introduction of the AHD in Queensland for there to be reliable (or any) information as to the extent to which they are being adopted and whether they have been effective when called into use. Research indicates that for a variety of reasons doctors do not usually raise the issue with patients or do not do so effectively. Most do not have the time needed to explain and discuss the complex concepts and issues. As one might expect it is very rare for an AHD to be made on the first visit yet that will often mean that it is not made at all. Research in other countries raises doubt about the ability of the AHD to influence care in the great majority of cases. The prescribed form for the AHD in Queensland is long and daunting and requires a doctor s certificate. In theory AHD's are a good idea, yet it appears unlikely at this stage that this will be embraced widely in Australia. Glenys Hodges is a Senior Associate, advising in Estate Planning Telephone: (07) Glenys.Hodges@ allens.com.au For further information please contact: 5316 Adam Thatcher Allen Allen & Hemsley, Brisbane Head of Allens National Health Practice Ph:(07) Adam.Thatcher@allens.com.au John Baartz Allen Allen & Hemsley, Brisbane Medico-Legal and Insurance Ph:(07) John.Baartz@allens.com.au Mark Stubbings Allen Allen & Hemsley, Sydney Health Infrastructure Ph: (02) Mark.Stubbing@allens.com.au Peter James Allen Allen & Hemsley, Sydney ehealth Ph: (02) Peter.James@allens.com.au David McLeish Arthur Robinson & Hedderwicks, Melbourne Ph: (03) David.Mcleish@arh.com.au Richard Malcolmson Arthur Robinson & Hedderwicks, Melbourne Ph: (03) Richard.Malcolmson@arh.com.au