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 338.

    over the lst 12 months we have learnt:
    the nhs murderd 17 babies, and tried to cover it up
    has awful standards of care for humans
    provides awful food and covers it up
    ignores compliants
    causes deaths by not providing water
    wasted £1.5-2bn with uncommercial procurement contracts
    "squandered" £1.4bn on redundancy payments

    and many many many more..... the NHS does not work, get rid of it

  • rate this

    Comment number 337.

    329. Diana_France

    The French system does seem to be very effective with better outcomes. However, it does cost the country about 25% more of its GDP than the NHS costs the UK.

  • rate this

    Comment number 336.

    @327..but the contribution could be better and more fairly structured. At the moment, the people paying most, are least likely to use. People paying less, more likely to abuse. Ok, that's perhaps a tad over-generalised. But having spent many nights in a&e with my child, I saw enough resource-wasting ignorant drunks, to make me think that charging at the door was the only option to keep them away!

  • rate this

    Comment number 335.

    312.where am I
    "reducde the admin costs teh NHS loves so much" I doubt it, the mounds of paperwork required is due to cental bureaucracy. If anything a private health service paid for by the state would be worse. The best option would be to cut targets and run hospitals like circle have. Which people are upset because its a success.and is a private business.

  • rate this

    Comment number 334.

    6. BeesAreTrendy

    I was going to write some thing deep and meaning full. But your comment hits the nail on the head. I.e sit around with the competition and fix the prices, Conservativtisation at work. PS you forgot the worst two examples Water and the Railways.

  • rate this

    Comment number 333.

    Prof Steve Field named chief inspector of now the government will make GPs work to targets and devalue the quality of care provided even further .

  • rate this

    Comment number 332.

    Oh the rich and their sense of entitlement rivalled only by the career benefit claimaints. Two sides of an unpleasant coin.

  • rate this

    Comment number 331.

    Jeremy Lee @320
    "Oh dear"
    Victims 'high priests' of "victimhood"?

    Trying to help you Jeremy, to help everyone, just as I suspect at heart you too, your staff 'receiving' insurance against NHS lack

    The point you miss, the vital point, is that the failings of the NHS - so very real - are owed to 'corruption of purpose', of staff, managers & politicians, even of helpful business-owners!

  • rate this

    Comment number 330.

    Easily solved - we have a national health system that every citizen is a member of - so lets stop having private healthcare. Order the three companies to cease trading in the uk.
    This is the same rubbish you get about private schools. The fact is the people using it pay in anyway so there'd be no extra funds and if all pirvate became public the systems couldn't cope.

  • rate this

    Comment number 329.

    In France all medical treatment is private (GP, Pharmacy, X-Ray clinic) but state reimburses 80% of charge up to maximum for each item. If charged more, you pay the difference or buy top-up mutuelle insurance to cover shortfalls. Works well, every worker subscribes, non-workers may pay quarterly depending on income - non-working foreigners (EU included) can join only after 5 years residence.

  • rate this

    Comment number 328.

    I understand the NHS is a free for all, ask the rest of the World! If the rich are getting a bit tetchy about the amount they have to pay perhaps Osborne should give them another tax cut? How are the Bankers doing? I understand Dave's off on one again! Just leave the nurses out, the unemployed the disabled the Welsh & the Scottish & the rich will be fine, Utopia S.E England, send Willy to Syria.

  • rate this

    Comment number 327.

    The people who bang on about the NHS being made private have you stopped to think that if it was, the number of hospitals ,doctors ,nurses and patients wouldn't decrease demand would still be the same, yet there would be twenty percent less budget as it has to go into profit.
    If you thought the NHS was bad now imagine that !

  • rate this

    Comment number 326.

    As long as the NHS (that's S for System not Service) stays broken I say good for private medicine. I have just been saved from becoming crippled by private medecine after the NHS took 9 months to diagnose - 6 weeks to see a consultant, 6 weeks for a test, 6 weeks to get the results, repeated over and over - and a 16 week wait for an operation. Private operation 6 days wait. Worth every penny.

  • rate this

    Comment number 325.

    @316 well you may well regret that misguided 'loyalty' one day. Having had our child admitted for the 7th time in as many months, while lost in the system as my GP phrased it herself. A senior A&E doctor, advised us that unless we went privately, our daughter would be returning for quite a few times more...the surgery she required had such a long backlog. It cost us 3k...the NHS has lost the plot.

  • rate this

    Comment number 324.

    Re top rated 6
    Unbelievable and very very sad that so many vote for this illiteracy.. The examples are all commodities with little product differentiation. In the case of petrol it is highly price sensitive, would you really pay 12p per litre more for fuel than at another petrol station nearby? Of course not.
    Competition is why the prices are the same.
    But the suppliers do need to be watched

  • rate this

    Comment number 323.

    People in the UK paying more than they should private healthcare.

    Well we pay more than we should for everything else, so no surprise really.

  • rate this

    Comment number 322.

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

    Hmm, 'for profit' companies. No mention of Nuffield Health - a charity.

  • rate this

    Comment number 321.

    Most medical consultants, private or otherwise, make fortunes from their work.

    People pay because they think they have no other choice and will suffer and perhaps die if they don't.

    The prospect of death and suffering allows people to dramatically over charge.

    It is extremely unethical and it is why the medical profession constantly fights to protect its own vested interests.

  • rate this

    Comment number 320.

    Oh dear All for All (311), there speaks a High Priest of Victimhood.

    For your information, my 'middle ground' means I support universal healthcare provision, but see the need for urgent reform; I support ambition, but not without some constraints on behaviour; and I'd rather encourage a sense of 'possibility' than victimhood as a state of mind.

    I'm so sorry if you find those beliefs unpalatable.

  • rate this

    Comment number 319.

    I have never managed to access the private helathcare I pay for on my insurance through work due to the fact that the insurers took forever to assess my claim. They acknowledged receit within three days of me submitting the form and all the evidence. I chase twice a week until I have the operation on the NHS. A year after returning to work, they finally said that they were assessing my claim.


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