AMII has backed the OFT’s decision to refer the market for privately funded healthcare services to the Competition Commission
The private healthcare sector is likely to be of continuing growing importance to the UK’s populace and economy. Following closely on the heels of the Coalition Government’s national health service reforms, it becomes vital that both the delivery of private healthcare and the distribution of insurance to cover its costs offers quality and value for money for private patients.
The Association of Medical Insurance Intermediaries’ view of the Office of Fair Trading’s decision to refer the market for privately funded healthcare services – not to be confused with referring the private medical insurance sector – to the Competition Commission is overwhelmingly positive.
The OFT held the view that the private healthcare market could work better for patients and that there were reasonable grounds for suspecting that there were features of the market that prevent, restrict, or distort competition.
However the Competition Commission must investigate with reference to and acknowledgement of the major factors of the NHS reforms.
The major elements of the NHS reforms appear to be:
* GP commissioning.
* Outcomes not targets.
* Watchdog for patients.
* Strong foundations.
* Fair stable and transparent regulation.
* Reduction of administration costs.
* Culture change.
* The importance of personal budgets
These have to be taken into consideration alongside the features identified by the OFT such as “a lack of easily comparable information being circulated to patients and their GPs on the quality and costs of private treatment”, plus “limited number of significant private healthcare providers and large PMI insurers at a national level”. The OFT recognises the potential barriers to new insurers entering the market and hence the inability to offer patient choice.
I believe the referral to be justified and vindicated, and the very fact that some larger private hospital providers can impose price increases without consultation or possibly provide incentives to specialist consultants to ensure that their patients are treated at a particular facility, is fundamentally unfair practice. It results in private patients and indeed their GPs facing extreme difficulty in selecting providers and ultimately delivers higher prices or lower quality of care.
The Competition Commission should specifically investigate transparency of full treatment costs which means consultation with both insurers and practitioners in terms of both clinical quality and the cost of private healthcare services.
I also believe that the predominance of venture capital investment in private hospital provider chains sometimes results in pockets of high concentration in some local areas where patients have limited choice of hospital. The result of this is, given the desire by most patients to be treated locally, that insurance providers will generally be forced to rely on these large provider chains to provide access to treatment for their policyholders. Fundamentally this manifests itself in ‘block’ hospital negotiations as opposed to pricing locally and does not recognise the variables in the delivery of healthcare costs throughout the UK.