Call for private hospital reforms
Private hospitals face being sold and perks for doctors banned under plans to tackle weak competition which is pushing up prices for patients, a watchdog has ruled.
The Competition Commission uncovered 101 private hospitals across the country which face little competition, driving up insurance premiums for patients in the £5.5 billion private healthcare market.
The watchdog ruled almost 20 hospitals may have to be sold, and also signalled an end to doctors earning incentives for directing patients to particular private hospitals.
The three biggest private hospital groups, Spire, BMI and HCA, came under fire for reaping high profits in recent years. The Commission said their market dominance caused "consumer detriment" of £173 million to £193 million a year between 2009 and 2011.
Smaller private hospital groups and insurers such as Bupa and Axa welcomed the measures. Bupa Health Funding called it "good news for patients and private healthcare".
Circle, which has two private hospitals in Bath and Reading, said the ruling vindicated its concerns over the "monopolistic behaviour" of big private hospital providers, and called for heavy fines.
But larger hospital groups were defiant, insisting concerns over profits ignore massive investment in technology and patient care. About 80% of private hospital patients are funded by insurance premiums, typically paid for by employers.
The regulator found new players rarely enter the private hospitals market due to high costs, the response from existing operators and flat demand. That means a lack of competition in many local areas - forcing insurers to use the incumbent private hospital and driving up insurance premiums for all patients. Patients who fund their own care are also hit with higher charges in areas with little competition, it said.
Commission chairman Roger Witcomb said: "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. 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."
However Stephen Collier, chief executive of BMI Healthcare, insisted its profits are reinvested back into its hospitals. He said: "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."