CMA backs down on private hospital sales

Back in 2013, the Competition and Markets Authority ruled that 20 private hospitals would have to be sold as a result of its investigation into the private healthcare market. But the decision didn't go down well with the providers. BMI, Spire, Ramsay, Nuffield and HCA all challenged the ruling and demanded to see the analysis conducted by the CMA. Last November, only one company was still under threat of being forced to sell two of its hospitals - HCA, the US owned hospital operator that holds the lion's share of the London market. 

HCA off the hook

HCA had been told to divest either the London Bridge and Princess Grace hospitals or alternatively the Wellington Hospital including the Wellington Hospital Platinum Medical Centre. The CMA argued that there was an adverse effect on competition (AEC) in the markets for the provision of private hospital services in London, and that this resulted in higher prices being charged by HCA to private medical insurers across the range of treatments for insured patients.

But this week it was announced that HCA's challenge to the CMA ruling has been successful. HCA’s advisers identified errors in the analysis of insured pricing which formed part of the evidence base for the AEC finding. The CMA has accepted that it made a procedural error by not re-consulting with HCA on its insured pricing analysis, which the CMA had revised following an earlier consultation during the investigation.

In its published ruling (37 page PDF),  the Competition Appeal Tribunal (CAT) has ordered the CMA to pay some of HCA's cost in the matter. 

According to the Financial Times:

"Roger Witcomb, chairman of the CMA... said that although he still believed the market required more competition, the entrance of more companies in the next few years means that “divestment is no longer a proportionate remedy”.

Original rulings still apply

The CAT’s ruling does not have any effect on the remainder of the rulings in  the CMA’s final report:

  •  A power to review arrangements for a private hospital to operate a private patient unit in an NHS hospital in its local area.
  • Provision of better information for patients on the performance of consultants and hospitals
  • A crackdown on benefits and incentive schemes provided to referring clinicians by private hospital operators.

Increased transparency

The CMA has also announced that it has approved arrangements proposed by the Private Healthcare Information Network (PHIN) to establish an organisation which will make private healthcare information via an independent public website. This aims to give patients access to the information they need on performance and fees to make informed choices on where to have private treatment.

Bupa reaction?

You can probably guess....

 “The CMA has confirmed again that there isn’t enough competition in central London, with HCA dominating the private hospital market and charging higher price. We ask the CMA to act now to address this gap.



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CMA backs down on private hospital sales

About the author

Keith Pollard is Executive chairman of LaingBuisson, an online publisher in the healthcare sector that operates market-leading web portals such as Private Healthcare UK and . LaingBuisson International Limited is also active in the online medical travel sector through Treatment Abroad, International Medical Travel Journal and DoctorInternet, the Arabic medical tourism portal. View for my full profile.

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