16 July 2008 WATERFRONT PLACE 1 EAGLE STREET BRISBANE PO BOX 7844 WATERFRONT PLACE BRISBANE QLD4001 AUSTRALIA DX 102 BRISBANE wwwmintereIliron.com TELEPHONE +61 73119 6000 FACSlMlLE+61 7 3119 10M)

Mr Richard Chadwick General Manager Adjudication Branch Australian Competition and Consumer Commission GPO Box 3 13 1 CANBERRA ACT 2601

Dear Mr Chadwick

Authorisation

Please find enclosed an authorisation application for possible price fixing conduct and exclusionary provisions with respect to shared practices in the dental profession.

Enclosed is:

(a) Form A: Exclusionary Provisions;

(b) Form B: Agreements Affecting Competition;

(c) a submission in support of the authorisation applications; and

(d) a cheque in the amount of $9,000 payable to the Australian Competition and Consumer Commission.

If you have any questions in relation to this authorisation or require any further information, please contact Margaret Brown on (07) 31 19 6388.

Yours faithfully MINTER ELLISON

Contact: Margaret Brown Direct phone: +61 7 31 19 6388 Direct fax: +61 7 31 19 1388 Email: margaret.brown@minterellison.com Our reference: KEXF MAB 40-5697326

1 8 JUL 2008

M I M R E I W O N G R O U P AN0 ASSOCIATED OFFKES SYDNEY MELBOURNE BRISBANE CANBERRA ADELAIDE PERTH GOLDCOAST DARWIN AUCKLAND WELLINGTON HONG KONG SHANGHAI JAKARTA LONDON

printed on 50% recycled paper

Form A Commonwealth of Australia

Trade Practices Act 1974 -subsection 88 (1)

EXCLUSIONARY PROVISIONS: APPLICATION FOR AUTHORISATION

To the Australian Competition and Consumer Commission:

Application is hereby made under subsection 88 (1) of the Trade Practices Act I974 for an authorisation under that subsection:

to make a contract or arrangement, or arrive at an understanding, where a provision of the proposed contract, arrangement or understanding would be, or might be, an exclusionary provision within the meaning of section 45 of that Act.

to give effect to a provision of a contract, arrangement or understanding where the provision is, or may be, an exclusionary provision within the meaning of section 45 of that Act.

(Strike out whichever is not applicable)

PLEASE FOLLOW DIRECTIONS ON BACK OF THIS FORM

1. Applicant

(a) Name of Applicant: (Refer to direction 2)

q\ 0 q Australian Dental Association Inc. (ADA)

(b) Description of business carried on by applicant: (Refer to direction 3)

The ADA is the peak professional organisation representing dentists.

Its functions include determining policy, generating expert advice, providing assistance to members and providing a voice of dentistry both nationally and internationally.

Please see attached submission for more information.

(c) Address in Australia for service of documents on the applicant:

Margaret Brown Minter Ellison Waterfront Place 1 Eagle Street BRISBANE QLD 4000

Page 1 of 5 ME_l6065245~1 (W2003)

2. Contract, arrangement or understanding

(a) Description of the contract, arrangement or understanding, whether proposed or actual, for which authorisation is sought: (Refer to direction 4)

The making of or giving effect to contracts, arrangements or understandings between two or more dentists andlor dental specialists who practice in a shared practice as to fees to be charged for dental services provided in the practice.

(b) Description of those provisions of the contract, arrangement or understanding that are, or would or might be, exclusionary provisions: (Refer to direction 4)

Please see attached submission.

(c) Description of the goods or services to which the contract, arrangement or understanding (whether proposed or actual) relate:

Dental services of a general and specialist nature.

(d) The term for which authorisation of the provision of the contract, arrangement or understanding (whether proposed or actual) 'is being sought and grounds supporting this period of authorisation:

Five years.

3. Parties to the proposed arrangement

(a) Names, addresses and descriptions of business carried on by other parties or proposed parties to the contract or proposed contract, arrangement or understanding:

The authorisation is sought on behalf of all members of the ADA who are general practice dentists and dental specialists, current and future, who practice in a shared practice.

(b) Names, addresses and descriptions of business canied on by parties and other persons on whose behalf this application is made: (Refer to direction 5)

Refer to section 3(a) above.

4. Public benefit claims

(a) Arguments in support of application for authorisation: (Refer to direction 6)

Please see attached submission.

(b) Facts and evidence relied upon in support of these claims:

Please see attached submission.

Page 2 o f 5 ME.7606524S.L (W2003)

5. Market definition

Provide a description of the market(s) in which the goods or services described at 2 (c) are supplied or acquired and other affected markets including: significant suppliers and acquirers; substitutes available for the relevant goods or services; any restriction on the supply or acquisition of the relevant goods or services (for example geographic or legal restrictions): (Refer to direction 7)

The relevant markets are the markets for the provision of private general and specialist dental services in localised geographic regions.

Please see attached submission for more information.

6. Public detriments

(a) Detriments to the public resulting or likely to result from the contract arrangement or understanding for which authorisation is sought, in particular the likely effect of the contract arrangement or understanding, on the prices of the goods or services described at 2 (c) and the prices of goods or services in other affected markets: (Refer to direction 8)

Please see attached submission.

(b) Facts and evidence relevant to these detriments:

Please see attached submission.

7. Contracts, arrangements or understandigs in similar terms

(a) This application for authorisation may also be expressed to be made in relation to other contracts, arrangements or understandings or proposed contracts, arrangements or understandings, that are or will be in similar terms to the abovementioned contract, arrangement or understanding:

(b) Is this application to be so expressed?

Yes.

(c) If so, the following information is to be furnished:

(i) description of any variations between the contract, arrangement or understanding for which authorisation is sought and those contracts, arrangements or understandings that are stated to be in similar terms: (Refer to direction 9)

Please see attached submission.

(ii) Where the parties to the similar term contract(s) are known- names, addresses and descriptions of business carried on by those other parties: (Refer to direction 10)

Not known.

Page 3 of 5 ME_7606524SLL(\VZW3)

(iii) Where the parties to the similar term conhact(s) are not known- description of the class of business carried on by those possible parties:

Refer to section 2(c) above.

8. Joint Ventures

(a) Does this application deal with a matter relating to a joint venture (See section 45 of the Trade Practices Act 1974)?

No.

(b) If so, are any other applications being made simultaneously with this application in relation to that joint venture?

NIA.

(c) If so, by whom or on whose behalf are those other applications being made? N/A.

9. Further information

(a) Name, postal address and telephone contact details of the person authorised by the applicant seeking authorisation to provide additional information in relation to this application:

Margaret Brown Minter Ellison Waterfront Place 1 Eagie Sheet BRISBANE QLD 4000

Dated /b July 2008

Signed byton behalf of the applicant

&*:..&...A* ....... ... ... ........ ... ... ... . (Signature)

Margaret Alice Brown (Full Name)

Minter Ellison Lawyers (Organisation)

Consultant (Position in organisation)

Page 4 of 5 :ME_76065245-I (W2W3)

DIRECTIONS

1. In lodging this form, applicants must include all information, including supporting evidence that they wish the Commission to take into account in assessing their application for authorisation.

Where there is insufficient space on this form to fumish the required information, the information is to be shown on separate sheets, numbered consecutively and signed by or on behalf of the applicant.

2. Where the application is made by or on behalf of a corporation, the name of the corporation is to be inserted in item 1 (a), not the name of the person signing the application and the application is to be signed by a person authorised by the corporation to do so.

3. Describe that part of the applicant's business relating to the subject matter of the contract, arrangement or understanding in respect of which authorisation is sought.

4. Provide details of the contract, m g e m e n t or understanding (whether proposed or actual) in respect of which the authorisation is sought. Provide details of those provisions of the contract, arrangement or understanding that are, or would or might be, exclusionary provisions.

In providing these details -

(a) to the extent that any of the details have been reduced to writing- provide a true copy of the writing; and

(b) to the extent that any of the details have not been reduced to writing - provide a full and correct description of the particulars that have not been reduced to writing.

5. Where authorisation is sought on behalf of other parties provide details of each of those parties including names, addresses, descriptions of the business activities engaged in relating to the subject matter of the authorisation, and evidence of the party's consent to authorisation being sought on their behalf.

6. Provide details of those public benefits claimed to result or to be likely to result from the proposed contract, arrangement or understanding including quantification of those benefits where possible.

7. Provide details of the market(s) likely to be effected by the contract, arrangement or understanding in particular having regard to goods or services that may be substitutes for the good or service that is the subject matter of the application for authorisation.

8. Provide details of the detriments to the public, including those resulting from any lessening of competition, which may result from the proposed contract, arrangement or understanding. Provide quantification of those detriments where possible.

9. Where the application is made also in respect of other contracts, arrangements or understandings, which are or will be in similar terms to the contract, arrangement or understanding referred to in item 2, fumish with the application details of the manner in which those contracts, arrangements or understandings vary in their terms &om the contract, arrangements or understanding referred to in item 2.

10. Where authorisation is sought on behalf of other parties provide details of each of those parties including names, addresses, and descriptions of the business activities engaged in relating to the subject matter of the authorisation, and evidence of the party's consent to authorisation being sought on their behalf.

Page 5 of 5 ME_l6065245-1 (W2W31

Form B Commonwealth of Australia

Trade Practices Act 1974 - subsection 88 (1)

AGREEMENTS AFFECTING COMPETITION: APPLICATION FOR AUTHORISATION

To the Australian Competition and Consumer Commission:

Application is hereby made under subsection 88 (1) of the Trade Practices Act 1974 for an authorisation under that subsection:

to make a contact or arrangement, or arrive at an understanding, a provision of which would have the purpose, or would have or might have the effect, of substantially lessening competition within the meaning of section 45 of that Act.

to give effect to a provision of a contract, arrangement or understanding which provision has the purpose, or has or may have the effect, of substantially lessening competition within the meaning of section 45 of that Act.

(Strike out whichever is not applicable)

PLEASE FOLLOW DIRECTIONS ON BACK OF THIS FORM

1. Applicant

(a) Name of Applicant: (Refer to direction 2)

A Y \ 8 q 5' Australian Dental Association Inc. (ADA)

(b) Short description of business carried on by applicant: (Refer to direction 3)

The ADA is the peak professional organisation representing dentists.

Its functions include determining policy, generating expert advice, providing assistance to members and providing a voice of dentistry both nationally and internationally.

Please see attached submission for more information.

(c) Address in Australia for service of documents on the applicant:

Margaret Brown Minter Ellison W a t d o n t Place 1 Eagle Street BRISBANE QLD 4000

Page 1 of 5 ME.742ll768.1 OV2W3)

2. Contract, arrangement or understandig

Description of the contract, arrangement or understanding, whether proposed or actual, for which authorisation is sought: (Refer to direction 4)

The making of or giving effect to contracts, arrangements or understandings between two or more dentists and/or dental specialists who practice in a shared practice as to fees to be charged for dental services provided in the practice.

Description of those provisions of the contract, arrangement or understanding that are, or would or might, substantially lessen competition: (Refer to direction 4)

Please see attached submission.

Description of the goods or services to which the contract, arrangement or understanding (whether proposed or actual) relate:

Dental services of a general and specialist nature.

The term for which authorisation of the contract, arrangement or understanding (whether proposed or actual) is being sought and grounds supporting this period of authorisation:

Five years.

Parties to the proposed arrangement

Names, addresses and descriptions of business canied on by other parties or proposed parties to the contract or proposed contract, arrangement or understanding:

The authorisation is sought on behalf of all members of the ADA who are general practice dentists and dental specialists, current and future, who practice in a shared practice.

Names, addresses and descriptions of business carried on by parties and other persons on whose behalf this application is made: (Refer to direction 5)

Refer to section 3(a) above.

Public benefit claims

Arguments in support of authorisation: (Refer to direction 6)

Please see attached submission.

Facts and evidence relied upon in support of these claims:

Please see attached submission.

Page 2 of 5 ME.74211768.1 (W2003)

5. Market defmition

Provide a description of the market(s) in which the goods or services described at 2 (c) are supplied or acquired and other affected markets including: significant suppliers and acquirers; substitutes available for the relevant goods or services; any restriction on the supply or acquisition of the relevant goods or services (for example geographic or legal restrictions): (Refer to direction 7)

The relevant markets are the markets for the provision of private general and specialist dental services in localised geographic regions.

Please see attached submission for more information.

6. Public detriments

(a) Detriments to the public resulting or likely to result from the authorisation, in particular the likely effect of the contract, arrangement or understanding, on the prices of the goods or services described at 2 (c) and the prices of goods or services in other affected markets: (Refer to direction 8)

Please see attached submission.

(b) Facts and evidence relevant to these detriments:

Please see attached submission.

7. Contract, arrangements or understandings in similar terms

This application for authorisation may also be expressed to be made in relation to other contracts, arrangements or understandings or proposed contracts, arrangements or understandings, that are or will be in similar terns to the abovementioned contract, arrangement or understanding.

(a) Is this application to be so expressed?

Yes.

(b) If so, the following information is to be furnished:

(i) description of any variations between the contract, arrangement or understanding for which authorisation is sought and those contracts, arrangements or understandings that are stated to be in similar terms: (Refer to direction 9)

Please see attached submission.

(ii) Where the parties to the similar term contract(s) are known- names, addresses and descriptions of business carried on by those other parties:

Not known.

(iii) Where the parties to the similar term contract(s) are not known- description of the class of business carried on by those possible parties:

Refer to section 2(c) above.

Page 3 of 5 ME-74211768-1 (WZCO3)

8. Joint Ventures

(a) Does this application deal with a matter relating to a joint venture (See section 45 of the Trade Practices Act 1974)?

No.

(b) If so, are any other applications being made simultaneously with this application in relation to that joint venture?

N/A

(c) If so, by whom or on whose behalf are those other applications being made?

N/A

9. Further information

(a) Name and address of person authorised by the applicant to provide additional information in relation to this application:

Margaret Brown Minter Ellison W a t d o n t Place 1 Eagle Street BRISBANE QLD 4000

Dated / July 2008

Signed on behalf of the applicant

(Signature)

Margaret Alice Brown (Full Name)

Minter Ellison Lawyers (Organisation)

Consultant (Position in Organisation)

Page 4 of 5 ME-7421 1168-1 (W2002)

DIRECTIONS

1. In lodging this form, applicants must include all information, including supporting evidence that they wish the Commission to take into account in assessing the application for authorisation.

Where there is insufficient space on this form to furnish the required information, the information is to be shown on separate sheets, numbered consecutively and signed by or on behalf of the applicant.

2. Where the application is made by or on behalf of a corporation, the name of the corporation is to be inserted in item 1 (a), not the name of the person signing the application and the application is to be signed by a person authorised by the corporation to do so.

3. Describe that part of the applicant's business relating to the subject matter of the contract, arrangement or understanding in respect of which the application is made.

4. Provide details of the contract, arrangement or understanding (whether proposed or actual) in respect of which the authorisation is sought. Provide details of those provisions of the contract, arrangement or understanding that are, or would or might, substantially lessen competition.

In providing these details:

(a) to the extent that any of the details have been reduced to writing - provide a true copy of the writing; and

(b) to the extent that of any of the details have not been reduced to writing - provide a full and correct description of the particulars that have not been reduced to writing.

5. Where authorisation is sought on behalf of other parties provide details of each of those parties including names, addresses, descriptions of the business activities engaged in relating to the subject matter of the authorisation, and evidence of the party's consent to authorisation being sought on their behalf.

6 . Provide details of those public benefits claimed to result or to be likely to result from the proposed contract, arrangement or understanding including quantification of those benefits where possible.

7. Provide details of the market($ likely to be effected by the contract, arrangement or understanding, in particular having regard to goods or services that may be substitutes for the good or service that is the subject matter of the authorisation.

8. Provide details of the detriments to the public which may result from the proposed contract, arrangement or understanding including quantification of those detriments where possible.

9. Where the application is made also in respect of other contracts, arrangements or understandings, which are or will be in similar terms to the contract, arrangement or understanding referred to in item 2, furnish with the application details of the manner in which those contracts, arrangements or understandings vary in their terms from the contract, arrangements or understanding referred to in item 2.

Page 5 of 5 ME.74211768_1 (W2003)

AUSTRALIAN DENTAL ASSOCIATION INC

SUBMISSION IN SUPPORT OF APPLICATION FOR AUTHORISATION UNDER SECTION 88(1) OF THE TRADE PRACTICES ACT 1974 (CTH)

1. Introduction

1.1 The Australian Dental Association Incorporated (ADA) is the peak professional organisation representing dentists.

1.2 It is a national organisation with branches in all states and the Northern Territory. Membership is voluntary and over 90% of dentists in Australia are members.

1.3 The ADA has two main aims:

(a) the encouragement of the health of the public; and

(b) the promotion of the art and science of dentistry.

1.4 The functions of the ADA include:

(a) representation of members' interests including interacting with government on behalf of members and preparing submissions to government departments, inquiries and regulatory bodies in relation to issues of concern to members;

(b) development of policies for members focussing on key areas of clinical practice and patient management including privacy, delivery of oral care to special groups such as adolescents and indigenous Australians and prevention and management of oral injuries;

(c) provision of information on general dental practice issues and developments including general infection control in clinical practice, clinical photography and radiography;

(d) provision of information in relation to the evaluation of dental products including therapeutics, instruments, materials and equipment and dental supplies such as gloves, materials and sterilisation mechanisms;

(e) advice, information and associated support regarding:

(i) professional indemnity insurance;

(ii) legal issues of general dental practice including professional indemnity, industrial relations, privacy issues and consent documentation;

(iii) workplace health and safety issues; and

(iv) human resources issues;

(9 complaints resolution processes to resolve complaints about members in relation to a member's conduct, performance or standards in the provision of services;

(g) access to the Australian Dental Journal, newsletters, guidelines, web-site portals and information from dental libraries; and

(h) maintenance of international relationships with other professional dental associations.

1.5 The Federal Council of the ADA has seventeen councillors who include four specialists, a general practice dentist with an interest in sedation and general anaesthetic techniques and general practice dentists who have special interests in various other disciplines within dentistry. The Councillors represent all states and territories of Australia.

2. The Application

2.1 This application for authorisation is made by the ADA on behalf of members who are general practice dentists and dental specialists, current and future, who practice in a shared practice.

..2 A dentist is a registered primary healthcare professional educated and specialised in the care of teeth, gums, bone support and the mouth. They identify and treat dental diseases as well as provide preventative oral health services for teeth. General practice dentists provide dental care to the public in both private andlor public sector dental health services. Dental specialists provide specialised services and include Endodontists, Oral and Maxillofacial Surgeons, Orthodontists, Paediatric dentists, Periodontists, Prosthodontists, Oral Pathologists and Dental Radiologists.

2.3 Shared practices typically feature the following elements:

(a) two or more dental practitioners who may but do not necessarily practice in a partnership;

(b) shared staff including dental hygienists, administrative and support staff;

(c) treatment of patients of other members of the practice;

(d) shared dental records;

(e) shared premises and/or satellite offices;

( f ) a shared practice name;

(g) a common reception;

Q shared dental equipment and supplies; and

(i) joint advertising.

2.4 Shared practices may also have:

(a) common billing and fee collection and other financial functions;

(b) common policies and procedures; and/or

(c) a common service entity.

2.5 The authorisation relates to the making of or giving effect to contracts, arrangements or understandings between two or more dentists andlor dental specialists who practice in a shared practice as to fees to be charged for dental services provided in the practice.

2.6 The application for authorisation extends to all contracts, arrangements or understandings in similar terms to the proposed conduct, to the extent that giving effect to the proposed conduct results in contracts, arrangements or understandings in similar terms.

2.7 The applicant is seeking authorisation under both the state and territory competition codes as well as the Trade Practices Act 1974 (Cth) (Act).

3. The Market

3.1 The applicant submits that the relevant markets are the markets for the provision of private general and specialist dental services in localised geographic regions.

Supply of dental services in the market

3.2 Based on the most recent consolidated statistical data compiled in 2006, in 2003 there were 11 404 registered dentists of which an estimated 9678 were currently practising.' Of these, 2546 were female.

3.3 The differences in the rate of practising dentists per head of population across the states and territories in 2003 were as fo~lows:~

Table 1: Number of dentists practising in Australian states and territories per 100,000 head of population

Victoria 52.4 28.4 22.8 0.0 45.7

Queensland 55.7 39.8 34.2 10.6 45.9

South Australia 66.0 23.5 28.1 27.1 54.7

Western Australia 55.8 32.0 34.9 17.7 48.0

Tasmania N/A 39.2 9.6 0.0 28.2

Northern Territory NIA NI A 36.6 13.8 26.1

Australian Capital 56.0 0.0 N/ A N/ A 55.9 Territory

TOTAL 56.2 33.6 26.6 22.9 47.4

3.4 There is evidence of a shortage in the supply of dental services.) According to a Productivity Commission report entitled 'Australia's Health Workforce' released on 19 January 2006, 'although precise quantification is difficult, there are evident shortages in workforce supply - particularly in . . . dentist~y'.~ The aggregate projected shortage in supply in 2010 has been estimated at approximately 3.8 million visit^.^

1 Teusner, D.N. and Chrisopoulos, S. (2006) 'Australian Dental Labour Force 2003', Australian Dental Journal, Vol. 51,No. 2, pp. 191-192. 2 Teusner, D.N. (2005) 'Geographic distribution of the dentist labour force', Australian Research Centre for Population Oral Health, Australian Dental Journal, Vol. 50, No. 2, pp. 1 19 -122. 3 Spencer, AJ, Seudziuk, P, Slade G and Harford J. Interpretation of fmdings. In: Slade GD, Spencer AJ, Roberts- Tbomson KF ( 4 s ) (2007) Australia's dental generations: the National Survey ofAdult Oral Health 2004-06, Australian Institute of Health and Welfare (Dental Statistics and Research Series No. 34), pp. 243 - 246. ' Productivity Commission, Australia's Health Work&orce 2006, page XVI. 5 Spencer AJ, Teusner DN, Carter KD and Brennan DS (2003) Population Oral Health Series No 2 The dental labour force in Australia: theposition andpolicy directions, Australian Institute of Health and Welfare, p 2.

.5 The availability of public dentists by region affects consumer access to public dental services, particularly in rural and remote areas. The indicator is defined as the number of full time equivalent (FTE) public dentists per 100 000 people by regions6

Table 2: Availability of public dentists (per 100 000 people)

Fiqure 11 7 Availability of publtc dentists, 2005a. b.

R4 Majw cams E l hner m a l E3 Outer regional EiRemdaiwsy remote Ol Tdel

NSMt &lit O'd WA SA Taa ACT NT Aust

a FPE bsnd on 4Qhcur week. There were n6 prblii M i s t s il m n o k and wry remote a m s h Vckda a Tamsnia. Then were nrr pvbfk dentists h inner regional e m s R Ole ACT. Tasmania had no major cities The ACT hsd no outR region&, or r&c and vwy re-. -as. The NT h& no mejor E i h or inner rqan~l anas.

Souroe: AIHW [umblihed); iabk l lA.14.

3.6 The shortage is more acute in outer metropolitan, rural and remote areas and indigenous areas. Factors which contribute to the supply shortfall include reductions in the average working hours, an ageing workforce and a greater ferninisation of the dental profession.

3.7 At the same time, improvements in oral health and the ageing population are both contributing to a greater demand for dental services. ' According to a national survey of Australian adult oral health conducted by the Australian Institute of Health and Welfare, the percentage of adults reporting a need for dental fillings was greater in 2004-06 than in 1987-8K8 This is a consequence of decreased levels of tooth loss which has increased the pool of teeth potentially at risk of oral diseases.

3.8 In addition, improvements in dental technology have contributed to an increase in the number of complex and intense services provided, including a shift toward restorative services for adults. This generally results in longer patient visits and decreased productivity for each practitioner.

Productivity Commission, Report on Government Services 2008, p 11.20. 7 Spencer AJ, Teusner DN, Carter KD and Brennan DS (2003) Population Oral Health Series No 2 The dental labour force in Australia: hep position andpolicy directions, Australian Institute of Health and Welfare, p 5.

Spencer, AJ, Sendziuk, P, Slade G and Harford J. Interpretation of findings. In: Slade GD, Spencer M, Roberts- Thomson KF (eds) (2007) Australia 's dental generations: the National Survey ofAdult Oral Health 2004-06, Australian Institute of Health and Welfare (Dental Statistics and Research Series No. 34), pp. 223.

Practice characteristics

3.9 The majority of dentists work in private practice. In 2001 and 2003, approximately 82% of practising dentists worked in the rivate sector, 15% worked in the public sector and 2% worked in 'other' practice types. b'

3.10 There is a significant amount of diversity in the business structures utilised by dentists in private practice. These include:

(a) sole practitioner;

(b) a single dentist trading as an incorporated entity;

(c) one of two or more shareholder dentists in an incorporated entity;

(d) employment as an assistant in a practice i.e. being employed and receiving a salary from the practice; and

(e) shared practices including:

(i) partnership of two or more practitioners where expenses are shared and profits and losses allocated in agreed proportions; and

(ii) dentists practising in conjunction with one or more other dentists, charging separately in accordance with an agreed fee schedule and undertaking other activities described in clause 2.3."

3.1 1 In most of these structures where there are two or more practitioners, it is permissible for the practice to charge common fees.

3.12 In 2005, the ADA conducted a Dental Practice Survey of its members for the financial year ended 30 June 2004. The survey responses indicated the following types of business structures in private practice:"

Incorporated Practitioner 11%

Employing Practitioner 8%

Partnership Practitioner 14%

Specialist 11%

3.13 Shared practices exist in more than one of the 'types of practice' identified in the Dental Practice Survey, as dentists who practise in a shared practice may characterise themselves

Teusner, D.N. and Chrisopoulos, S. (2006) 'Australian Dental Labour Force 2003', Australian Dental Journal, Vol. 51, No. 2, p 192; Teusner, D.N (2005) 'Geographic Distribution of the dentist labour force' Australian Dental Journal, Vo1.50, No.2 p 119. lo Dentists practising in such a structure are often classified as being an 'associate dentist'. " Australian Dental Practice Survey 2004, Table 1: Number of Private Dental Practices and Structure, April 2006. l2 This represents an increase from 44.3% in 2001, see Teusner, D.N (2005) 'Geographic Distribution of the dentist labour force' Australian Dental Journal, Vo1.50, No.2 p 120.

as either a sole practitioner, an incorporated practitioner, a partnership practitioner or a specialist, depending upon their individual circumstances.

3.14 Although the Dental Practice Survey did not quantify the number of dentists practising in a shared practice (or "associate dentists"), private practices were asked about their practice structure and 20% indicated that they had some form of "associate relationship".

4. Public Benefits

4.1 The authorisation, if granted, will allow dentists and dental specialists in a shared practice to agree fees to be charged to patients by the practice. A shared practice cannot exist without the ability to agree on fees to be charged by the practice. The notion that a dentist could practise in a shared practice with the characteristics outlined in section 2.3 above and yet compete with the other dentists in that practice on fees is fundamentally inconsistent with the concept of a shared practice.

4.2 Shared practices generate public benefits in five main areas:

(a) availability of dental services;

(b) continuity of patient care;

(c) quality of dental services;

(d) range of dental services; and

(e) efficiency in the provision of dental services.

Availability of dental services

4.3 Shared practices improve the availability of dental services for patients. They allow dental practices to have longer and more flexible opening hours thereby improving access to dental services for patients. Having more than one dentist in the practice also increases the chance that a patient will be able to be seen quickly in an emergency situation. Shared practices give dentists the opportunity to work around family and other commitments and reduces the pressure on dentists to be personally available to see patients whenever required. In the applicant's view, increased flexibility of work practices including working hours and 'on-call' rosters are important factors in attracting women and part-time dentists to the profession generally and in attracting dentists to rural areas.

Continuity ofpatient care

4.4 The applicant submits that the authorisation will ensure continuity and consistency of patient care as different dentists within the practice will be able to access patient information and patient records. Those dentists will be able to effectively 'cover' for each other so that patients will be able to see other dentists in the practice if they require dental services and their usual dentist is unavailable. Patients can also embark upon a course of treatment with certainty regarding the availability of services and fees as shared practices allow cross-utilisation of other dentists within the practice for a particular patient. For example, if a patient requires a particular type of dental work, in which one of the dentists who is not the patient's usual dentist specialises, it would be possible to include treatment by that dentist in the treatment plan while providing certainty about the fees for that work at the outset so that the patient can provide informed financial consent.

4.5 These co-operative arrangements ensure continuity of care and encourage shared responsibility for ensuring that quality of patient care is maintained over time. The co- operative approach inherent in a shared practice may be disturbed by differential fees. Differential fees may also create real andlor perceived barriers for patients. From a patient's perspective, the shared practice is one business. It is consistent with this

perception for dentists operating in such practices have the ability to agree fees for the practice. It would also potentially inconvenience patients and intenupt patient care if a patient could only afford to access dental services from one dentist within the practice and not from others.

Quality of dental services

4.6 Shared practices promote a culture of teamwork and improve the quality of dental services available to patients. They encourage high standards of patient care as the members of that practice can readily consult on all aspects of patient care. The ability to work as part of a team within a shared practice also gives dentists greater access to peer advice and review, clinical expertise and the camaraderie of other dentists. It also increases the likelihood of a dentist within the practice having expertise or specialised knowledge in a particular area of clinical practice. For example, although all dentists in the practice may be general practitioners, one may have a particular interest in crown and bridge work and may be able to provide assistance to hisiher colleagues in relation to any crown and bridge work which their patients may require. This is particularly important for less-experienced dentists and will help improve standards of patient care.

Range of dental services and eficiency in the provision of dental services

4.7 A report by the Australian Institute of Health and Welfare considered that productivity can be increased through the configuration of the dental team. Although historically, the dental team has consisted of a dentist and chair-side dental assistant, the report found increases in productivity are more likely to be achieved in larger dental practices where there are favourable circumstances for expansion, and economies of scale that are likely to optimise the input of new team members. Relevantly, the report stated:

'a dental practice that adds a dental hygienist to the team is likely to produce not only the previous preventative and periodontal services (substitution) but also additional preventative and conservative periodontal services provided by the dental hygienist (complementary), and possibly additional complex services provided by the dentist in the time freedfrom previously providedpreventative and periodontal service^."^

4.8 The applicant submits that allowing dentists to agree fees in a shared practice will improve the range of dental services offered by the practice and the efficiency of such services as the practice will be able to share costs and utilise economies of scale in the purchase of major equipment. A study conducted by Access Economics has found that the average gross cost of regulatory compliance each year for each dental practice is $64,200.'~ Allowing dentists to share the costs of practice such as compliance as well as wages, rent, utilities and maintenance of records will make dental practices less expensive and in the applicant's view, more attractive to potential practitioners. The shared costs in a shared practice may also allow that practice to invest in more specialised equipment than a sole practitioner would be able to e.g. an orthopantomogram (OPG) machine. An OPG machine is specifically designed to produce panoramic X-rays of the teeth, jaws and temperomandibular joints. They assist dentists to diagnose abnormalities and decide appropriate treatment. Ultimately, saving in costs increase the efficiency of dental practice and lower the costs of providing dental services to patients. Further providing access to such equipment 'in-house' removes the need for patients to make another appointment to see another health practitioner, thereby eliminating 'double handling' of

l 3 Spencer AJ, Teusner DN, Carter KD and Brennan DS (2003) Population Oral Health Series No 2 The dental labourfarce in Australia: the position andpolicy directions, Australian Institute of Health and Welfare, p 37. I4~ccess Economics Pty Limited, Cost of Compliance for Australian Dental Practices, June 2006, p 32.

the patient and ensuring that the patient's condition is diagnosed and treated in a timely manner.

4.9 Shared practices create an alternative to the corporate model of dental practice. Corporate practices which pursue profit in an attempt to maximise their shareholders' return may not provide dental services of a discount nature such as services to Department of Veterans Affairs' patients or pro bono services. Shared practices ensure that dentists have a primary duty to the patient but allow the dentist to access the economies of scale available to practitioners who practise in a corporate model.

5. Public Detriments

5.1 The applicant submits that the conduct the subject of the authorisation gives rise to minimal public detriment.

5.2 The application for authorisation is confined only to the making of or giving effect to contracts, arrangements or understandings between two or more dentists and/or dental specialists who practise in a shared practice as to fees to be charged for dental services provided in that practice. The authorised conduct will only apply within shared practices, and will not apply to conduct between other practices, and therefore will not adversely affect competition between dentist practices.

5.3 Dentists work in diverse, complex and overlapping business structures. For dentists and dental specialists operating in the shared practice structure, authorisation would permit dentists working in a shared practice to agree on the fees that the practice charges patients, irrespective of their legal structure. Under other group business structures including partnerships and incorporated entities, dentists can collectively agree on the price they charge patients. The authorisation will ensure that the Act does not prevent a shared practice from existing in another form, namely a shared practice between two or more dental practitioners which possess the characteristics outlined at section 2.3 above. It will provide dentists with flexibility to choose the business structure that best suit their needs without differing application of the Act and has the potential to encourage competition.

5.4 In metropolitan and some larger rural areas, patients are free to select which practice and which dentist they attend. Given that shared practices already exist in the form of partnerships and incorporated entities, the authorised conduct will not lessen competition. In rural areas where there may not be the same level of competition, the demand for dental visits is likely to be greater than the supply of dental services. Accordingly, there is far less likelihood of competition between practices. It is unlikely that a dentist who is denied the ability to practise in a shared practice will establish a competing practice in a rural or remote area.

5.5 It is unlikely that current fee levels will increase if the authorisation is granted. As the demand for dental services currently exceeds the supply of those services Australia wide, all dentists are likely to be working at capacity.15 Further, in submissions to the ACCC in relation to the Royal Australian College of General Practitioners' application for revocation and substitution of authorisation A90795 in 2007, both ACT Health and the Health Services Commissioner of Victoria stated that they had no evidence that prices for medical services in the ACT or Victoria had risen as a result of the authorisation.16

Is See references cited in support in paragraph 3.4. 16 ACT Health, letter to ACCC dated 8 January 2007, p 2 and Health Services Commissioner of Victoria, letter to ACCC dated 25 January 2007, p 1.

6 . Period of Authorisation

6.1 Five years, as this will allow the authorisation to be reviewed in light of any changed circumstances.

7. Conclusion

The ADA submits that the authorisation of fee setting within a shared practice is in the public benefit.

Shared ~ractices have a number of vublic benefits including imvroving the availability of dental . - . - services, providing continuity of patient care, increasing the quality and range of dental services available within a practice and encouraging efficiencies in the provision of dental services.

Any public detriment which may arise will be minimal.