Choice and cost at heart of inquiry into private healthcare industry

Published on 05/04/2012 00:00

AN INVESTIGATION has been ordered into the £5 billion private healthcare sector in an attempt to make it “work better” for patients.

The Office of Fair Trading (OFT) has referred the industry to the Competition Commission. The OFT said some parts of the UK, such as Edinburgh, have only one private hospital and there are “significant barriers” to new companies entering the market, which is currently dominated by five players.

The move follows a provisional decision to refer the industry in December and was welcomed by Bupa’s insurance arm, which has long called for an inquiry as it said the cost of private healthcare was becoming “unsustainable”.

The Commission has wide-ranging powers and could potentially order the industry’s biggest players to sell some of their hospitals to encourage competition.

The major players in Scotland include Spire Healthcare, which runs the Murrayfield Hospital in Edinburgh, and Nuffield Health, which has a hospital in Glasgow.

OFT chief executive John Fingleton said: “The private healthcare sector is likely to continue to be of growing importance to the nation’s population and economy and so it is important that the market works well.

“Yet private patients and their GPs face difficulties selecting private healthcare providers on the basis of quality or value for money, and this may result in patients paying higher prices, or receiving lower quality care.

“Following extensive consultation, we have concluded that an in-depth investigation by the Competition Commission is the most appropriate means of investigating and potentially remedying the market problems we have identified.”

The OFT’s report found that General Healthcare Group, Nuffield Health Hospitals, Ramsay Health Care UK, Spire Healthcare and HCA account for three-quarters of the market.

In some parts of the country, including Edinburgh, Exeter and Hull, there is only one private hospital or healthcare facility, which poses a problem for patients wanting to be treated locally. And where there is a choice available, it can be difficult to accurately compare prices and the quality of different private health providers, it added.

Dr Natalie-Jane Macdonald, managing director of Bupa Health and Wellbeing, said: “For too long, the cost of private healthcare has been rising to unsustainable levels, in large part because of a lack of competition and efficiency in the private hospital market and among consultants in private practice.”

David Mobbs, chief executive of Nuffield Health said: “We believe the decision by the OFT to refer the private healthcare market for further scrutiny is the right decision for both the industry and the consumer.”

Rob Roger, chief executive of Spire Healthcare, said: “It is important for patients and GPs to be able to compare private healthcare providers and make an informed choice.”