The Office of Fair Trading (OFT) has referred the
market for privately funded healthcare services to the Competition Commission
for further investigation.
In a market study, the OFT found a number of
features that, individually or in combination, prevent, restrict or distort
competition in the £5 billion UK private healthcare market.
The OFT found:
- There is a lack of easily comparable
information available to patients, GPs or health insurance providers 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. In addition, the full costs of treatment may not
always be transparent for private patients
- There are only a limited number of significant
private healthcare providers and of larger health insurance providers at a
national level. There are pockets of particularly high concentration in some
local areas where private healthcare providers own the only local hospital or a
must-have facility. This may give a degree of market power to healthcare
providers in these areas, as the larger insurance providers will generally rely
on them to be able to provide full national coverage to policyholders
- A number of features of the private healthcare
market combine to create significant barriers to new competitors entering 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 patients at a particular
facility, which could raise those barriers further.
John Fingleton of OFT says, “Our findings suggest that private patients
in the UK do not have access to easily comparable information on quality and
costs and that competition is also restricted by barriers to new private
healthcare providers entering and being able to offer private patients greater
choice. It is important that patient demand and choice are able to drive
competition and innovation in this market with a view to better value for all
patients.”
Private medical insurance news: 16 December 2011
