OFT refers private healthcare market to competition commission
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The Office of Fair Trading has made a provisional decision to refer the private healthcare market to the Competition Commission.
The OFT made the decision after a report into the market which found unclear information on treatment costs was being given to consumers and that insurers could be undermining competition between healthcare providers.
It adds that the concentration of healthcare providers and insurers could be leading to the dominance of certain providers and to large insurers “relying” on those providers to offer national coverage to policy holders.
According to the report, some healthcare providers could be offering incentives to consultants for sending patients to certain facilities while larger healthcare providers could be using their dominant position to impose price rises. It says these represent “significant barriers to entry” for new competitors.
The OFT says the concentration of providers and insurers, unclear information on costs and barriers could be “preventing, restricting or distorting” competition.
OFT chief executive John Fingleton says: “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. We have provisionally decided that these significant concerns merit a more in-depth investigation by the Competition Commission.”
ABI director of general insurance and health Nick Starling says: “We welcome this report and the need to ensure a competitive market for high quality private healthcare. We agree with the concerns raised on transparency and support consultants clearly informing patients on treatment options and costs.”
The OFT says it is pleased the FSA and the ABI will work with insurance providers to make sure clients are aware they could face shortfall payments where there are limits to the amount payable under their policies. The OFT says the private healthcare industry is worth £5bn a year.
Starling says: “Private medical insurers are committed to ensuring that customers clearly understand the cover they provide and will continue to work with the FSA to achieve this.”
An Axa PPP Healthcare spokesman says: “We welcome the publication of the OFT report and certainly share its concern that there are a number of features of private healthcare provision in the UK that undermine competition in the market and make it difficult for consumers, GPs and insurers to make informed choices between competing providers on the basis of the quality and value of their services.”
Axa PPP says it hopes the proposal to refer the private healthcare market to the Competition Commission includes “a long overdue review of some of the practices of healthcare providers that we believe do not work in customers’ best interests.”
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