OFT private healthcare decision: reaction

Insurers and hospital groups call for the Competition Commission to scrutinise bad practices in the sector

The Office of Fair Trading’s decision to refer the private healthcare market to the Competition Commission represents an opportunity to stamp out bad practices in the sector, according to providers and hospital groups.

Today the OFT confirmed it has referred the private healthcare market to the Competition Commission for further investigation over concerns that full treatment costs are not always transparent for patients, and that there is a lack of easily comparable information on the quality and costs of services.

Dr Natalie-Jane Macdonald, managing director of Bupa Health and Wellbeing, said the provider is pleased with the decision and hopes it leads to scrutiny of rising costs in private healthcare.

She said: “For too long, the cost of private healthcare has been rising to unsustainable levels, in large part because of a lack of competition and efficiency in the private hospital market and among consultants in private practice.”

AXA PPP healthcare said in a statement that it shares the OFT’s concerns that it can be difficult for consumers, GPs and insurers to make informed choices between competing providers on the basis of the quality and value of their services.

The firm highlighted the payment of specialists as an issue particularly in need of examination, arguing that they should only be paid for services they provide personally.

AXA PPP commercial director Fergus Craig said: “We believe that consumers will be very surprised and disappointed to see that the OFT has found a number of inducements being paid to specialists in return for using particular hospitals or clinics.

“Our view is that specialists have a duty to ensure that their patients receive appropriate and cost-effective treatment. Inducements of the kind noted by the OFT will inevitably give rise to concerns that they increase costs and incentivise unnecessary tests and treatment. We hope that this review will lead to an end to these market practices.”

Meanwhile Nuffield Health and HCA have clashed over competition in the London private healthcare market.

David Mobbs, group chief executive at Nuffield Health, said: “This investigation offers a golden opportunity to get rid of some of the practices which have beleaguered the industry for years. 

“More transparency is needed around the decisions taken by doctors and insurers on where patients are referred. These should be based only on clinical excellence and not influenced by loyalty deals, financial incentives or restrictive networks.”

He added: “In some areas, including London, there is a monopoly by one provider, with competitors unable to break into or develop in the market. Not only is this anti-competitive but it is entirely at odds with the concept of patient choice.”

But HCA claimed that London is the most competitive part of the UK healthcare market.

In a statement the firm said: "HCA’s six London hospitals compete with nine other private hospitals and more than 20 NHS Private Patient Units. It’s clear, therefore, that London is the most competitive part of the UK market."

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