29.08.13
Informed choices ‘difficult’ for private patients
Private patients are paying too much for care due to a lack of local competition, a new report from the Competition Commission (CC) has found.
101 private hospitals were identified in areas with little rival competition, mainly owned by three major groups: BMI, Spire Healthcare and HCA. There are high barriers to entry and expansion in this market, which has led to higher prices.
The CC has recommended incumbents should be prevented from expanding in areas with just one or two hospitals, and preventing hospital operators from offering incentives to consultants to refer patients for treatment.
More information about the quality of private hospitals’ services and the level of fees charged by consultants could also improve competition in the sector. Additionally, some providers owning a cluster of hospitals in one area should have to sell of some of them, the CC has suggested.
CC chairman and chairman of the Private Healthcare Inquiry Group, Roger Witcomb said: “The lack of competition in the healthcare market at a local level means that most private patients are paying more than they should either for private medical insurance or for self-funded treatment. The lack of available and comparable information, often less than is available to NHS patients, also makes informed choices – which could help drive competition – for these patients difficult.
“We’ve also seen the existence of a range of incentives which encourage medical professionals to choose facilities on grounds other than price and quality – and we struggle to believe these can be in the interests of patients.
“Curing these ills and trying to get a better deal for patients is not going to be straightforward. High costs and other factors mean that new competing facilities are not going to spring up so we may look to increase competition and require sales of hospitals to other operators where we can. We will also look at ways that will stop hospital operators using local strength in one area as leverage in their negotiations nationally.
“Although many patients don’t pay directly for the services as they do in other markets, we think that greater comparable information of the sort that is available elsewhere would help drive greater competition on price and quality, potentially improving both. We now want to discuss which of these measures and in what form will be most effective in bringing about the change this market needs.”
But BMI responded: “We reject absolutely any assertion that BMI Healthcare and its hospitals exercise market power or that we make excess profits at the expense of patients.
“The vast majority of BMI's 69 facilities, in a UK market with over 500 rival facilities, face very significant local competition from other private hospitals and, increasingly, from the NHS.”
And Fiona Booth, chief executive of the Association of Independent Healthcare Organisations (AIHO), said: “AIHO is disappointed that the Competition Commission has not acknowledged the substantial work done by the independent healthcare industry on cost, price and quality transparency. The Competition Commission has been made aware of this and the sector’s further plans in this area.
“Independent hospitals are transforming the way they help patients make decisions about their healthcare. For example, the UK’s largest independent healthcare providers recently published pricing information on a range of common procedures in a straightforward format for patients. Furthermore, data to be published by the Private Healthcare Information Network (PHIN) will be directly equivalent to and comparable against information on the performance of NHS hospitals in England. We’re surprised the provisional findings fail to recognise this."
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