Private hospitals to face prices inquiry
£ 5bn industry in spotlight over ‘lack of competition’
PRIVATE hospitals and clinics are facing a major investigation over fears they are ripping off patients.
The Office of Fair Trading said a preliminary inquiry had revealed concerns about a lack of competition between health providers.
It has now ordered the Competition Commission to carry out a full-scale probe into the £5billion industry.
Critics claim the market is riddled with anti- competitive practices, including loyalty deals in which consultants receive incentives to send patients to certain private hospitals.
The OFT says there are ‘considerable grounds for suspecting that there are features of the market that prevent, restrict or distort competition’.
OFT chief executive John Fingleton said: ‘Private patients and 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.
‘Following extensive consultation, we have concluded that an in- depth investigation by the Competition Commission is the most appropriate means of investigating and potentially remedying the market problems we have identified.’
The private health industry is worth around £5billion a year, of which private hospitals and clinics account for around £3billion.
Around one in five patients using private health facilities pays out of their own pocket, and the remainder have insurance.
The OFT started looking at the sector last year when it found a range of failings, including a lack of information about the price and quality of different healthcare services, lack of transparency in cost of treatments and allegations of restrictive practices. In some areas, such as Edinburgh and Exeter, patients wanting to pay for their care – or use their health insurance – have no choice of private provider, it added.
Healthcare industry bosses, who have previously highlighted problems within the industry, welcomed the inquiry.
David Mobbs, group chief executive of Nuffield Health, said: ‘We believe the decision by the OFT to refer the private health-
‘At odds with patient choice’
care market for further scrutiny is the right decision for both the industry and the consumer.
‘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.
‘ While we believe that this investigation is vital for the longterm future of the industry, it should go further by also looking at the role of the private medical insurers.’
Dr Natalie- Jane Macdonald, of healthcare insurance provider Bupa Health and Wellbeing, 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.’
The referral was also welcomed by Ali Parsa, chief executive of Circle Health, which submitted a formal complaint to the OFT in September 2010 about what it alleged was the anti-competitive nature of the industry.
He said: ‘This is great news for any entrepreneur, clinician or small enterprise with innovative ideas on improving healthcare delivery, and marks a massive victory for patients as consumers.’