Measures introduced in the Competition and Markets Authority’s (CMA) final report into increasing competition in the private healthcare market could result in lower private medical insurance (PMI) premiums and new PMI product design.
Its Private healthcare market investigation final report has announced measures including a crackdown on benefits and incentive schemes awarded by private healthcare providers referring clinicians for treating patients at their facilities.
The report found these incentive schemes to be a problem that can lead to referrals being driven by considerations rather than quality and price.
The CMA’s report also sets out a number of remedy packages to address a lack of competition and consumer detriment issues in the market.
It follows a two-year investigation into the private healthcare market, after the Office of Fair Trading referred the private healthcare market to the Competition Commission, which is now part of the CMA.
The report also found a lack of sufficient publicly available performance information on private healthcare services by private hospital operators. As a result, they will now be required to provide clarity on costs and the quality of treatment.
The CMA’s remedies package include:
- A restriction or ban on certain benefits and incentive schemes provided by private hospital operators to clinicians.
- A combination of measures to improve the public availability of information on consultant fees and of information on the performance of consultants and private hospitals.
- The divestiture by Hospital Corporation of America (HCA) of either the London Bridge and the Princess Grace hospitals or the Wellington hospital.
- Measures to ensure that arrangements between NHS trusts and private hospital operators to operate or manage private patient units (PPU) will be capable of review by the CMA. The CMA will be able to prohibit arrangements which it decides substantially lessen competition in the relevant local area.
Roger Witcomb, chairman of the group and CMA panel chair, said: “These are measures which will bring changes across the country. The sale of HCA hospitals will significantly increase competition in central London, in particular by allowing the insurers to offer organisations and individual policyholders a comprehensive alternative to HCA.
“We’re also introducing measures which will improve competition across the whole market and ensure private patients get a better deal.
“Greater information on the performance of hospital operators and of consultants as well as consultants’ fees will allow patients to make far better informed choices about what they are paying for, when deciding which hospital and consultant to choose for their treatment.
“Equally, we are going to restrict incentive schemes that encourage patient referrals to particular private hospitals, again so that the advice given by consultants is driven solely by the merits of individual facilities.”
Joanne Anderson, senior healthcare consultant at Towers Watson, added: “This review could be the catalyst that invigorates change. Increased competition and transparency of information will stimulate growth and new product design.
“Earlier this year, we predicted that more employers will challenge the one-size-fits-all approach to healthcare benefits by implementing segmentation to provide benefit levels that are more relevant to specific employee groups.”
