Reaction to buying power for private healthcare

The Office of Fair Trading’s report on private healthcare states there is a limit on the buying power of the large private medical insurers over private hospital groups.

The Association of Medical Insurance Intermediaries (AMII) says, “The inference is that the two largest insurers do not necessarily have a high degree of market power when negotiating with the private hospital groups, so a referral to the Competition Commission could actually result in a shake-up of the private health market which could filter through to lower premiums and really benefit consumers. It is recognised that private treatment costs in the UK are generally higher than private treatment costs in comparable sized countries in Europe, so the referral to the Competition Commission can only be a good thing particularly when considering the consolidation we have seen recently in the insurance market.”

Most private healthcare is paid for by insurance, so it is rather surprising that the OFT thinks that the two biggest insurers have no buying power; the recent dispute between Bupa and BMI suggests the opposite.

Private medical insurance news: 4 January 2012