Is the UK private healthcare market open and competitive? Are private patients sufficiently informed about what they are buying and what it costs? Are the relationships between private hospitals and consultants too close? The Office of Fair Trading is currently looking at the private healthcare market in the UK and how it works, and have recently published their initial findings.
Preliminary research undertaken by the OFT calls into question whether the market is working well for private healthcare patients i.e. Are private patients getting the best deal? Is there true competition in the private healthcare sector?
Areas under investigation
- The OFT is focusing on five key areas:
- the nature of competition in the provision of private healthcare services.
- the level of market concentration amongst the suppliers of private healthcare services.
- the barriers to entry to the provision of private healthcare.
- the role of consultants in the private healthcare sector.
- the constraints on consumers in relation to how they access and assess information on private healthcare, and how they exercise choice.
Various areas of research are being followed. If you’re in the private healthcare business and you haven’t read the initial research reports....then you should. (See the OFT Progress Statement: Private Healthcare).
Initial research into the private healthcare market
Their initial research throws up some interesting aspects of the workings of the private healthcare market. Here are a few snippets to whet your appetite.
See Programme of Research Exploring Issues of Private Healthcare Among General Practitioners and Medical Consultants - Final survey report for the full details of GP and consultant research.
From the GP research:
- 77% of GPs make up to 10 referrals per month average number of referrals per month that respondents make to private facilities and/or privately practising Consultants.
- The majority of GPs (58%) reported that they rarely ask patients if they wish to be treated privately. A small minority ‘never’ asked patients this question.
- 65% of GPs supported the view that ‘it is important to describe all treatment options across both NHS and private providers’.
- 16% of GPs always ask their patients whether they have PMI. A further 38% usually seek to ascertain whether this is the case.
- The majority of GPs indicated that they ‘always’ or ‘usually’ discussed the choice of facility and/or Consultant with a patient who wished to be treated privately. Around a quarter of GPs either ‘rarely’ or ‘never’ discussed choice with patients.
- GPs regarded the reputation of the Consultants working in a facility as the most important factor influencing their decision as to whether to recommend a facility to patients, followed by confidence gained as a result of previous experiences with a facility.
And from the consultant research:
- Consultants typically do not offer patients a choice between the private facilities that they have admission rights for, or do so in a small proportion of cases.
- In almost all cases Consultants treated patients in the facility where the first consultation was held.
- The majority of Consultants had not considered switching between their main private facility and another facility in the past 5 years.
- Self-pay patients typically either rarely or never negotiate fees with Consultants.
- Despite the extent to which PMI providers influenced their fees, Consultants’ knowledge of PMI providers’ reimbursement levels was typically quite poor.
The buying process in private healthcare
The “Patient Journey Report” which was based on 40 individual in‐depth interviews carried out with patients who had obtained, or were in the process of obtaining, private treatment also provides some useful insight into the buying process in private healthcare:
- Patients often received either a choice or a recommendation from their GP and/or PMI, however very few were given any information on the choices or the recommendation made. This left participants confused and often unable to make a distinction between the choices provided, thus disabling them to make an informed decision.
- Some participants were not aware that they might choose a hospital or consultant for private treatment. GPs and PMIs did not always provide participants with choice and assumed they would want to go to a hospital located close to where they lived.
- Patients’ primary concern was the location of treatment. All wanted to be treated as close to home as possible and wanted a choice of hospital or clinic that would facilitate this. Choice of Consultant was less important to most patients.
- Participants found it difficult to compare between different consultants and hospitals.
- PMIs did not provide their policyholders with a lot of choice about providers.
- The majority of patients were unaware of the fees they had incurred during treatment.
- Self‐pay patients were far more aware of the cost of their treatment
- No patients negotiated costs with their PMI, hospital or Consultant.
- Patients tended to receive little in the way of detailed information which they could use in order to inform a decision between different private providers and Consultants
The next steps for the OFT study involve gathering information and then analysing it with a view to determining whether consumer and competition issues are present in the market for private healthcare.
Do we need greater transparency in the private healthcare market?
It will be interesting to see how this OFT investigation turns out, whether it encourages greater openness and transparency in the private healthcare market and whether it leads to better informed private healthcare consumers.
Pricing and the lack of information given to consumers on prices is one issue that may well receive attention. On “Search, Compare and Book” web sites that we operate such as HarleyStreet.com, we are encouraging consultants and specialists and other healthcare professionals to publish their prices. Why shouldn’t private patients know in advance what a consultant charges for a consultation or for an operation? There’s reluctance amongst some consultants and specialists to publish their charges. The OFT investigation may well highlight this and lead to greater openness in the long term.