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Private health sector may distort competition, OFT says

health service
Image caption The OFT will make a final ruling on referring the sector to the Competition Commission next year

The Office of Fair Trading has said it is minded to refer the UK's £5bn private healthcare sector to the Competition Commission.

In a provisional report, the OFT said it had found issues that could "prevent, restrict or distort competition" in the market.

Private patients do not have "access to easily comparable information on quality and costs", the OFT said.

The OFT will make a final ruling next year after further consultation.

In a statement, the OFT said it found three key issues that needed further investigation:

  • There is a lack of easily comparable information available to patients, GPs or health insurance providers on the quality and costs of private healthcare services;
  • There are only a limited number of significant private healthcare providers and of larger health insurance providers at a national level;
  • A number of features of the private healthcare market combine to create significant barriers to new competitors entering and being able to offer private patients greater choice.

John Fingleton, OFT chief executive, said: "Our provisional findings suggest that private patients in the UK don't have access to easily comparable information on quality and costs and that competition is also restricted by barriers to new private healthcare providers entering and being able to offer private patients greater choice.

"It is important that patient demand and choice are able to drive competition and innovation in this market with a view to better value for all patients," he said.

Reaction

Suppliers have broadly welcomed the review. They and other interested parties have until 30 January to respond to the OFT.

"We need much more upfront pricing transparency on what patients are required to pay when they sign up to a private medical insurance policy," said Dr Andy Jones, of Nuffield Health.

"This [report] calls into question some of the agreements between insurers and providers. It calls into question some of the cosy deals."

Meanwhile Dr Natalie-Jane Macdonald, managing director of Bupa Health and Wellbeing, said: "The OFT has recognised that private patients are not always aware of the full costs of their treatment and may need to pay additional unexpected charges over and above their health insurance premiums.

"This shortfall happens when a consultant charges more than health insurers' monetary limits and is, understandably, of great concern to our customers."

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