Comment: Post-OFT, what now for PMI?

Post-OFT, PMI providers must become consumer champions if the industry is to survive

Surprise, surprise. The private medical insurance (PMI) world has “welcomed” the Office of Fair Trading's (OFT) referral of the privately-funded healthcare market to the Competition Commission.

It could hardly do otherwise. Once the OFT published its 141 page report last December, followed by a brief “public consultation”, the wheels were in motion for a full scale referral in much the same way as the First World War could not be stopped once the military trains on both sides had started to roll.

And, whatever the private misgivings about giving any outside organisation (and worse, the public) an insight into inner workings, it is normal practice (and good PR) to welcome an investigation, even one hopes will go away.

So it is a given that PMI providers and the Association of Medical Insurance Intermediaries (AMII) favour the Competition Commission probe. This will look at:

AMII neatly encapsulated the case with: “This outcome is welcomed as we feel it is a sensible decision and will ultimately benefit consumers. At present there is no transparency of costs for services and treatment and we are particularly concerned that over 90% of the ownership of independent private hospitals is through venture capitalists whose focus is on profit before patient care.”

So who – despite the reputational danger – has slammed the referral? Step forward BMI Healthcare, the biggest provider of private hospitals and recently in its own price war (now in a truce situation) with Bupa, Britain's largest PMI provider.

BMI said: “We are disappointed with the OFT's decision which we believe will actually harm consumers. Requiring hospitals, insurers and consultants to undergo two years of expensive and distracting regulatory review will be to the inevitable detriment of patients. The market for private healthcare in the UK is competitive and generates great outcomes for patients who report high levels of satisfaction with the services they receive. Almost 97% of BMI Healthcare customers rate their overall quality of care as good or better, according to our latest independently compiled statistics."

Day one of journalism school teaches that you can never go wrong with a “millions of children will die if this goes ahead” opening sentence. BMI has done just that. Consumers will be harmed and the review will be “to the inevitable detriment of patients”.  Note the “inevitable”.  Now if I was a potential BMI patient, I would head elsewhere – this sounds as though the doctors and nurses will be too busy filling in OFT questionnaires to bother with my knee operation or hip replacement (which of course they won't be).

Quite how BMI can claim the market is “competitive” when the OFT tome, at the very least, casts doubt, is opaque. If it believed the market was working so brilliantly for all concerned, then it would probably not have bothered with those 141 pages. Yes, 97% of patients rate care as “good or better” but where was the cost question? With lower costs, and the greater price transparency the OFT requires, satisfaction might have been even higher.

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