Private healthcare referred to Competition Commission
by Gill Montia
The Office of Fair Trading (OFT) has referred the UK private healthcare market to the Competition Commission for further investigation.
The move follows a market investigation by the watchdog and a public consultation on its findings.
The OFT says it continues to hold the view that the market could work better for patients, and that there are reasonable grounds for suspecting that competition is restricted or distorted.
Features identified by the OFT are:
A lack of easily comparable information available to patients and their GPs on the quality and costs of private healthcare services; this may mean that competition between private healthcare providers and between consultants is not as effective as it could be.
Full costs of treatment may not always be transparent for private patients.
There are only a limited number of significant private healthcare providers and larger health insurance providers at a national level.
There are pockets of particularly high concentration in some local areas where private patients have a limited choice of hospital and given the desire for patients to be treated locally, this may mean that insurance providers will generally rely on these larger healthcare providers to provide this access to treatment for their policyholders.
A number of the features of the private healthcare market combine to create significant barriers to new competitors entering the market and being able to offer private patients greater choice.
For example, some larger private healthcare providers can impose price rises or set other conditions, if an insurer proposes to recognise a new entrant on its network.
There also appear to be certain incentives given by private healthcare providers to consultants, such as loyalty payments for treating private patients at a particular facility, which could raise those barriers further.
OFT chief executive, John Fingleton, comments: “Private patients and their GPs face difficulties selecting private healthcare providers on the basis of quality or value for money, and this may ultimately result in patients paying higher prices, or receiving lower quality care.”