Competition Commission: Private patients pay too much

Medical team operating Many private hospitals face little competition locally, the Competition Commission says

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Most patients in UK private hospitals are paying more than they should for treatment because of a lack of local competition, an inquiry has found.

More than 100 private hospitals around the country are in areas with little rival healthcare provision, says the Competition Commission (CC).

Many of these hospitals are owned by three major groups, the CC said.

It said the buying power of health insurance firms did not offset the hospitals' strong position.

About 80% of private patients fund their treatment through medical insurance, which is often paid for by their employers.

Although prices charged by operators to insurers are set nationally, the commission said it believed that the lack of local choice pushed up premiums for all patients, because insurers had no option but to use the local hospital.

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The commission's proposed reforms seem designed to give the insurers more muscle”

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"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," said the commission's chairman, Roger Witcomb.

"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."

'Market power'

Hospital groups BMI, Spire and HCA had been "earning returns substantially and persistently in excess of the cost of capital", the commission said.

The two biggest health insurance firms, Bupa and AXA PPP, had achieved "significantly lower prices than the smaller insurers" and had "some countervailing buyer power, Bupa more than AXA PPP".

"However, no insurer has countervailing buyer power that can fully offset the market power of BMI, Spire and HCA," the commission's provisional findings said.

The commission recommended moves to make more information available about the quality of hospitals' services and the level of fees charged by consultants.

It also suggested that operators owning a cluster of hospitals in one area should have to sell off some of them.

Responding to the commission, BMI said its findings were "based on flawed analyses of the reality of providing high quality private healthcare".

"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."

Spire chief executive Rob Roger said the findings were "based on an unrealistic assessment of the markets in which we operate", while HCA said it was "disappointed that quality of clinical care and investment in innovation seems to have been ignored by the Competition Commission".

For its part, Bupa welcomed the findings as "good news for patients".

Managing director Damien Marmion said: "Millions of people with health insurance rightly expect high-quality healthcare for an affordable price.

"By tackling the lack of competition that has damaged the sector for too long, the commission has understood the need for strong action and has put patients first."


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  • rate this

    Comment number 118.

    114. RobinTheBoyWonder
    One supplier lowers prices...

    Or one supplier raises prices and the others follow - look at our utility companies. Charge as much as they can get away with.

  • rate this

    Comment number 117.

    Paying to much? Boohoo. Use the NHS. Get a bit of that 'Free Markets solve all ills' down ya. Let's take the USA as an example, they pay nearly 50% more/person for health, yet have much worse outcomes. The uber rich get the Very Best, the Poor can just about afford 2nd rate medication. Wonderful. There's your Free Market. (and let's not get into prescription drug abuse - by both Patients and Dr.s)

  • rate this

    Comment number 116.

    @ 88.Alan Walker
    "It's a shame that the world is driven by the pursuit of money. It is times like these I wish the world was more like the UFP from Start Trek, where everyone works not to earn money, but to better themselves."

    I think you're missing the point : they work NOT to better themselves, BUT for the benefit and betterment of EVERYONE.

    Is this really naive ?

    I personally don't think so.

  • rate this

    Comment number 115.

    The biggest problem with NHS is that it removes all responsibility from the general public to look after themselves. The threat to the NHS is not privatisation but the staggering rise in A&E visitors & outrageous number of fat & unhealthy people pushing up diabetes, heart disease & cancer treatments. This is what will kill the NHS as we know it. We are creating these problems not privatisation..

  • rate this

    Comment number 114.

    @76#"..One supplier lowers prices, the others have to follow.
    If not, the supplier with the lowest prices will monopolise the market...."
    With end result being Free Healthcare?"

    Congratulations on completely missing the point of my post!

    I was talking about pricing and market forces - didn't even mention healthcare!

  • rate this

    Comment number 113.

    you should able to go to any NHS hospital and it should look the same inside and you should get the same service/treatment ,but you don't.
    It is all down to bad management,
    Take out that bad equation and regiment the NHS ,
    Force nurses back onto the wards ,stop renting hospital buildings and getting into extortionate maintenance contracts.
    service yourselves and stick to a strict nursing regime

  • rate this

    Comment number 112.

    This is what the government wants from the NHS, get the private sector to run it and if you can't afford treatment you die. Welcome to the brave new world.

  • rate this

    Comment number 111.

    The days of being able to con people into thinking competition is good for the customer is a thing of the past. People know that its a charter for cartels & no matter where you go you will be ripped off.
    No sorry but having been overcharged for energy telecoms rail fares and just about anything which has been privatised it is clear that the customer is there only to be exploited not to be served.

  • rate this

    Comment number 110.

    @101. Yet the best health services in Europe - Germany & France - are hybrid systems paid for by taxation & health insurance. It's not a case of state versus private but wanting good service and value for money in both. Less silly dogma - left & right - and more focus on better management & care is needed.

  • rate this

    Comment number 109.

    and how much do the private hospitals pay as a premium to the nation for being the health service of last resort when things go wrong?

  • rate this

    Comment number 108.

    Of course they pay too much...private medicine is a huge cash cow. Just look at the USA to see what happens to private medicine when there is no real competition.

  • rate this

    Comment number 107.

    on behalf of the people that pay private pensions like I do,
    I agree wholeheartedly, I earn in excess of 6 figure sum and
    For no reason I have a private pension coupled with paying privately for the hospital

    I don’t feel it although I pay over 5 figure some in total, because that is the way to go
    The NHS delays us and should be SCRAPPED and people should start paying for their illness simple

  • rate this

    Comment number 106.

    The US model of insurance funded health care although competent is probably twice as expensive as the NHS. So the free market obviously doesn't work to reduce costs, although it may provide better care for those with the most money. The obvious answer is for Government to regulate the industry to provide value for money.

  • rate this

    Comment number 105.

    Public healthcare is a virtual monopoly that squeezes out competition and distorts markets. The reason most people cannot choose and pay for their own healthcare is that they are taxed too much to pay for the public health "professionals" who fear competition as they know they will be found lacking.

  • rate this

    Comment number 104.

    What a pathetic news item.
    BBC must be short of things to report today.
    There's a Waitrose near me that charges 6p more for 3 litres of milk than the Tesco on the other side of town !!!
    And shock - horror, the local BP petrol station charges 2p more per litre for diesel than the one at Sainsbury !!
    Quick, everybody run out into the street & complain.

  • rate this

    Comment number 103.

    Private patients should be charged double what they are now, with the extra going to the National Health Service.

  • rate this

    Comment number 102.

    Privatisation is always a bad idea in in category where "good will" is an essential ingredient. Health service provision is one of those categories.
    Make the health service more efficient and that should not be too difficult. I see admin. support staff in abundance on my hospital visits. Cut that waste to start with. Private operations should be restricted to orthopaedic procedures.

  • rate this

    Comment number 101.

    The real answer is to abolish private health care totally. Just imagine how the NHS would improve then once the sharp elbowed middle and upper classes realise their is no other option.
    It would work for education as well.

  • rate this

    Comment number 100.

    Living in Germany, I pay a monthly premium that is proportional to my income. If you're unemployed you'll not be turned away from care, the state will always help.

    The only competition that exists is between the level of care offered, not the money that can be made. The way it should be. And my what excellent care we receive.

  • rate this

    Comment number 99.

    Private health care costing too much - well Dave and Ozzie just gave the rich plenty in tax cuts to pay for it.

    Oh how we are all in it together!!!


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