Competition Bureau challenges SROs to prove that regulations serve the public interest

This item addresses the 2007 report, Self-regulated professions Balancing competition and regulation , from Canada’s competition watch dog, the Competition Bureau:   The Bureau has also indicated that it plans to release a follow-up report in 2009.

The challenges

This report challenges all regulators of professions and occupations to prove that regulations serve the public interest more than they stifle competition and the benefits that consumers derive from fair competition in the marketplace. Foremost, it challenges regulators (particularly SROs) to be clear about what public interest is being protected by regulation.  Is it really public interest or the self interest of the profession that is being protected?  The Bureau’s view is that unnecessary regulation stifles the marketplace. The report is also clear that it is not about deregulation — it’s about unnecessary regulation.  In this category of unnecessary regulation the Bureau presents many challenges; here are three examples:

  1. Prove the merit of advertising restrictions on professional services since these restrictions prevent the public from learning about and differentiating services and making better choices;
  2. Prove the merit of overly restrictive entry to practice conditions that act as barriers to qualified newcomers who would otherwise add zest to a marketplace that is perhaps too comfortable for established incumbents;
  3. Prove the merit of practice exclusivities and too broadly defined scopes of practice that limit work that can be competently performed by assistants or other professionals at lower cost.

The overall challenge is this, prove that your regulations serve a greater public interest because unnecessary regulations have a damaging effect on competition and in the aggregate, masses of unnecessary regulation damage overall productivity in the economy.

Concern about low productivity is driving this

On this theme, the report opens with this zinger, followed by a solid economic analysis:

Despite comprising a significant part of the service economy in Canada, perhaps as much as one fifth, the professions comprise one of the overall economy’s least productive sectors.

The economic analysis makes it clear that the costs associated with professional services find their way into every other product and service in the economy; hence the concern about low productivity.

Mission clarity is important

Harm reduction or protecting the public interest is the core mission of regulation and it’s reasonable that there needs to be clarity about the primary mission–about what public interest is being protected. Taking a cue from risk management, clarity about the objective is the starting point.  What harm are we to prevent or mitigate and what good are we trying to foster? For a regulator, it’s all about the public interest. If the public interest involves crime prevention, a safety issue, then the public interest is likely quite clear. Regulations are put in place to prevent theft, personal injury or worse. However, in some areas of social regulation or economic regulation, the idea of the public interest becomes harder to define–but nevertheless, important to define.  Regulators need to define the public interest or be vulnerable to the criticism of creating unnecessary regulations that damage another public interest–a healthy marketplace.

Defining the public interest

Standards are useful in establishing public interest-especially if they have been developed through an open process of stakeholder consultation. Public expectations are also useful if there is a systematic and reliable method of establishing this: perhaps through an analysis of complaints, surveys or media reports.


Trusted (risky) professionals

Timely risk management

To reduce risk, expand your awareness of the risks and what’s happening in your jurisdiction

Bravado and confidence, admirable in some fields, can be disastrous if unchecked in high-risk professionals

In the past few months we’ve been reading about the public inquiry into Dr. Charles Smith, the Ontario pathologist whose questionable testimony led to wrongful convictions, and the financial scandal generated when French trader Jerome Kerviel evaded bank controls leading to the loss of 4.9 billion euros at Societe Generale SA.

The Dr. Smith case is particularly disturbing. Smith was a forensic child pathologist with no training in forensics – none was required or available in Canada when he rose to prominence. In frequent testimony as an expert witness, Smith, by his own admission, supported the prosecution in disregard of his obligation to provide balanced, objective testimony. Smith’s poor practices and mistakes, many of which date back to the early ’90s, resulted in wrongful imprisonment and financial and emotional devastation for several Ontario families.

Through the lens of risk management

The Smith (and Kerviel) examples illustrate how we are underestimating risk and using inadequate controls. Continue reading

Ethics and drug-trial recruitment by health professionals

Ethics and drug-trial recruitment

A recent article in The New Yorker by Carl Elliott, a professor at the Centre for Bioethics at the University of Minnesota, asks questions about the ethics of recruiting healthy and cash-hungry “guinea pigs” to support the drug testing economy. In recent years, pharmaceutical companies have moved drug trials to the private sector where more than seventy percent are now conducted. There’s a lot of money on the table (thousands of dollars per subject) for recruitment and the potential to attract health professionals to participate in an area of questionable ethics. Specifically, Elliot discusses the situation of Frank Abuzzahab, a de-licensed physician in the U.S who now operates as a psychopharmacology researcher. He lost his licence through disciplinary action: he was deemed to be responsible for the injuries or deaths of forty-six patients under his care who he recruited for drug trials.

Health professionals are in a position of authority when dealing with clients, or even the public. Their codes of ethics place the interests of the client ahead of their own.

What’s your view on the ethics of this situation? Is it appropriate for doctors, nurses or other health professionals to do some moonlighting on the side like this or not?

No License!!!

Arrest for illegal practice

What was he thinking, that he could practice without a license and skate around the authorities? READ ON.

No license!!!

In conversation with Dean Benard

Remember “Catch me if you can” the 2002 movie based on the real life story of Frank Abaganale Jr., a young con man who impersonates professionals so he can cash bogus cheques. A quick Google search yields several news stories – botched surgeries, dispensing drugs and sex with patients by unlicensed medical professionals.

To get a better understanding of practicing without a license, we spoke with Dean Benard of Benard + Associates, a person with actual experience in catching unlicensed professionals. A registered nurse, former police officer and licensed private investigator with a law degree and 17 years of experience, Dean is an expert in health investigations. Continue reading

Why do we use random audits?

Dart board

Random audits or inspections have long history in regulation. However, given the pressure on regulators today to stop bad things from happening, is it time to question this practice? So why are random audits used? The apparent reasons include:

  • Efficiency, auditing every situation is not possible
  • The threat of an audit keeps everyone honest
  • They’re fair; no prejudice determines who gets audited

Are these reasons really valid? Let’s consider them. Continue reading