On 2 April 2014, the Competition and Markets Authority (CMA), the Competition Commission's successor, published its Final Report on the private healthcare market investigation. One of the issues it addressed was price competition and price transparency in the private healthcare market. It concluded:
- "Self-pay patients... face higher charges in areas with little local competition."
- "Prices of treatments for self-pay patients were generally set locally and therefore vary across a hospital group’s portfolio of hospitals. ... Our analysis showed that there was a causal relationship between local concentration and self-pay prices for inpatient treatments. Private hospital operators, on average, charged higher self-pay prices in local areas where they faced weaker competitive constraints."
And recommended that the industry should:
- ..."make it easier for patients, insurers, GPs and consultants to assess a private healthcare facility or consultant’s suitability in terms of quality and price."
So, have we seen a change in the UK self-pay market? Are hospitals now making their prices more available and transparent to UK consumers? And… is there any impact on pricing levels?
Self-pay hospital prices
Most private hospitals are now publishing their self-pay prices. For our 2016 Self-Pay report, we gathered around 5,000 prices direct from web sites or direct from the hospital providers. What we found was this:
- Average national prices for a number of procedures have reduced compared to 2015. We are not clear whether this is genuine price competition or more accurate pricing by providers – for example taking into account reduced length of stay.
- We noted improved consistency in pricing this year compared with 2015 in terms of anomalies and obviously incorrect prices/descriptions. However, we believe the description of procedures could still be improved and more standardised across providers. There is still too much uncertainty from a consumer point of view given the variations in description of similar procedures by different providers.
- The range of prices provided for some procedures varied by more than 80% from the lowest to the highest. For example:
- The quoted self-pay price of a hip replacement varies across the UK from £8,500 to £14,150. This range is similar to the range that we observed in 2015. The average price for a hip replacement at £10,889 is 0.86% lower than in 2015.
- The quoted price of cataract surgery without vision correction varies across the UK from £1,850 to £3,400. The average price is 5.7% lower than in 2015.
So, still a wide variation in pricing across the UK, and within individual hospital groups, from one location to another.
The patient's perspective
Let's imagine you need a hip replacement. You're not covered by health insurance. Your consultant has told you that there are real problems with the NHS waiting list locally and it could be a few months before you get your new hip. You have some savings, and decide to look around online to see what it might cost. There are many private hospitals to choose from. How easy is it nowadays to compare what's on offer?
You start with your local BMI hospital. From their home page, you get to the pricing information quite quickly. It gives you four self-pay prices:
- £10,900 for a "Complex hip replacement"
- £9,900 for a "Hip replacement (prosthesis band 1)"
- £11,350 for a "Hip replacement (prosthesis band 2)"
- £12,600 for a "Hip replacement (prosthesis band 3)"
Hmmm... You're a bit confused. What's a complex hip replacement? What are these bands? The site doesn't explain. But the prices do include "post-discharge care" and " diagnostic investigations".
You try the Nuffield site. You find a price of £11,150 for a hip replacement, but how does this compare with the four BMI prices? You’re not sure. It includes "All pre-hospital admission tests and assessments required" and " Post operative physiotherapy sessions (as many as clinically required)."
Then on to Spire Healthcare. £13,026 for a hip replacement which includes £511 of "diagnostic investigations", and "up to 6 sessions of physio" post surgery.
At Ramsay Healthcare, prices are shown which include "pre-operative assessment" and "sixty days of post discharge outpatient care " However, "Diagnostic tests, typically a standard X-ray are excluded from the Guide Package Price":
- £10,330 for "Hip Replacement (cemented)"
- £11,578 for "Hip Replacement (ceramic)"
- £11,266 "Hip Replacement (uncemented)"
But how do these relate to the prices that you've seen elsewhere.
We're making pogress
What's apparent is that the industry is making progress in terms of saying "this is what private treatment costs". And hopefully, this will encourage more people to choose the private option when they're looking for treatment. But as we can see in the example above, there's still some way to go in providing information that is truly patient friendly and enables real comparison.