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
    -3

    Comment number 378.

    61.shabutie
    Let me break it down:

    private sector quality = (cost - profit) / number of patients

    public sector quality = cost/number of patients

    It's not bloody rocket science which one is better!
    ---
    Don't assume all costs are same. NHS vastly over managed, rip 4 layers of management out then compare the costs per patient. The higher NHS costs outweight the private profits by a mile.

  • rate this
    +3

    Comment number 377.

    What an amazing range of subjects that you cannot HYS on.

  • rate this
    +5

    Comment number 376.

    It wont be long before shareholders are put above patients...

  • rate this
    +7

    Comment number 375.

    Are you paying cash, or is this an insurance job ? Car repairs, injury claims, healthcare it is all the same. Insurance companies do not do enough to keep their costs down, other than offshoring call centres, so everyone ends up paying more. Looks who's sponsoring your next athletic/yacht race, concert, beach polo match. Someone is paying and it's ultimately YOU in premiums.

  • rate this
    +2

    Comment number 374.

    Perhaps if UK spent more on Healthcare and ensuring its proper running (Less admin chiefs, more worker ants that DO the job) there would be better "competition".

    Instead our succesive governments have spent money on WMD, Dodgy Sexed Up Dossiers and enquiry after inquiry. Now we are on the threashold of action with Syria.

    Leave the NHS alone - the UK Armed Forces has been busted by incompetence.

  • rate this
    -3

    Comment number 373.

    @366 Secretbanker

    These people with "fears & prejudices" include the British Medical Council, and I'm sorry, but if the NHS doctors own organisation doesn't trust the NHS why should we?

    http://www.independent.co.uk/life-style/health-and-families/health-news/british-medical-association-accused-of-compromising-its-own-values-by-offering-private-medical-insurance-to-staff-8780922.html

  • rate this
    +1

    Comment number 372.

    364.Total Mass Retain
    "have healthcare systems that cost 20-25% more of their GDP than the NHS costs the UK " I'm afraid thats not true, the true cost of the NHS is a lot higher. All ex-NHS employees receive a nice pension, which in 2010 was estimated to be £287bil over eight years, or another 35bil a year on top of the NHS cost.We pay more than France or Germany when you factor in these costs.

  • rate this
    +3

    Comment number 371.

    You cannot compare illness and medical treatment with cars and widgets.

    This is a matter of life and death.
    It encompasses philisophical principles of justice.

    Most ordinary UK people will end up dying on the streets wikthout NHS.

    Ed Milliband, where is YOUR voice now, you who promised repeal of the H&SS Act?

  • rate this
    +4

    Comment number 370.

    In the UK privatisation translates to - Public money, private profit. Without real competition you can't have a service run to make a profit because you will always end up with a poor service making a large profit.
    Health care is far to important to be messed with in this way. The NHS was, is and should be brilliant we should take care when allowing politics to get involved or we could lose it.

  • rate this
    +2

    Comment number 369.

    it is shocking. My husbands funding ran out, and instead of the £1200 per week that the insurance company was paying i had to pay over £3000 - all for the same service.

  • rate this
    +6

    Comment number 368.

    Totally misses the point. Everyone pays far too much for private cover, a result of the greed and inefficiency of everyone in the chain; doctors, hospital managers and insurers. The number of people paying for their own cover has been in freefall for years, and the industry has everything it needs to put it right , return to growth and reduce pressure on NHS. They just decline to get it done.

  • rate this
    -2

    Comment number 367.

    126. j. lee why am i not surprised that an intelligent answer is the most negative ! Are the beloved malcontents so blinded by their own ailments ? Or is it just selective breeding from the bbc again ?

  • rate this
    +5

    Comment number 366.

    I sold private healthcare for a number of years. It is entirely designed to prey on the fears and prejudices of your average Daily Mail reader. Queues, waiting lists, dirty wards. You are better to save/invest the money in a pot for possible use. Unless you are sick, when you are unlikely to get cover anyway, you wont get value from it. When you get old, & sick you wont be able to afford it.

  • rate this
    +2

    Comment number 365.

    Some pepole think that shareholders have some say or right in the profit making or loss that is their stock holding.

    Let me assure them that there is no binding law that says a company must pay X% of Profits it gains.

    Having got into private business (healthcare) what happens when it all goes wrong like the recent breast implants scandal? Taxpayers get jumped again... or there is no recompense.

  • rate this
    +9

    Comment number 364.

    346. Gryphon

    All the countries you mention (and France) have healthcare systems that cost 20-25% more of their GDP than the NHS costs the UK (about 12% versus 9% of GDP). By all means argue that their outcomes are superior to the NHS, but don't try to argue that they're cheaper and more efficient: they're not. If we want those outcomes it'll cost us more.

  • rate this
    +1

    Comment number 363.

    Why have the BBC joind the NSA? thats almost to treason?

  • rate this
    +1

    Comment number 362.

    Of course there's competition, just use the NHS instead of the private alternative. If people think they're better than everyone else and deserve special treatment then if it is available it should bankrupt them. Those profits are then taxed and used to help support the NHS.

  • rate this
    0

    Comment number 361.

    Since for profit managed health care the US insurance companies tell the providers what they will pay period - and the providers do not bill the patients for the difference they just cost shift it. Same provider different methods Ins co 1 Paid $85 + patient copay of $20, Ins co 2. Paid $65 no copay. 3 Patient no ins paid $125 all for the same 15 minutes of incompetence.

  • rate this
    +2

    Comment number 360.

    @100.
    WithoutWorries



    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.

    Would agree but as the breast implant scandal has shown the private sector privatises profit and socialises debt at every opportunity hence the NHS had to pick up the tab when things went wrong. !!!

  • rate this
    -4

    Comment number 359.

    357.No to NHS Privatisation
    Because privatisation worked so well for energy companies and train companies, didn't it ? Prices have stayed low, yeah ?
    Bless you and your naïve belief in the Free Market.
    -
    Thats because the trains/energy are not free markets, government regulates it. Its a halfway house that doesnt work properly. As long as health remains free proper competition can only help

 

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