Providers hail OFT stand

Health insurers have applauded the Office of Fair Trading’s (OFT) decision to refer the operation of the private healthcare market to the Competition Commission (CC).

The OFT was particularly concerned about the lack of transparency offered to patients going through the private treatment process and explained that many GPs it surveyed were also kept in the dark.

Sonia Branch, senior director of the OFT, told BBC Radio 4's Today programme that patients maybe paying higher prices for no additional quality because of a lack of clear information.

"When patients have a discussion with GPs we find they may not be getting very much information about the choice of consultants or private healthcare facilities they can visit," she said.

"A fifth (20%) of GPs we surveyed didn't feel they had any sufficient data to make the choice and another large proportion said they required more information to give the best advice to patients.

"We then found that when patients meet consultants, only about 40% will share their tariff list at first meeting.

"So patients aren't perhaps getting the same level of info about pricing and fees that they ideally should be."

This view has been recognised by several private medical insurance (PMI) providers who have applauded the OFT's conclusion.

Charlie MacEwan, corporate communications director at WPA, said the report vindicated everything the insurer had been doing and it wholeheartedly welcomed the findings.

"We have often raised concerns over the charging practices and lack of pricing transparency amongst most medical providers," he said.

"We actively promote our customers' freedom to choose where, when, how, and by who they are treated and a more transparent market will help this."

Nick Jones, brand and marketing manager at Exeter Family Friendly, agreed that increased consumer transparency would help, but noted that insurers held some responsibility too.

"It is vital to our success as insurers that we deliver what we promise at claim, so we must be better at engaging with our customers earlier in the claims process in order to give them all the information they need to make decisions that are right for them," he said.

"There is no doubt that if healthcare providers and consultants offered customers more information on their charges, they would again be empowered to make better decisions and in turn encourage better value.

"Also, the report points to a lack of consumer choice; driven by the size of both healthcare providers and insurers, which is compounded by both parties being highly dependent on the other, which can stifle innovation.

"As a specialist, mutual insurer, we would recognise the perceived dominance of the larger insurers, yet our experience over recent months has been that intermediaries are increasingly looking further afield for insurers who can and do innovate," he added.

Bupa has been a vocal critic of the private healthcare market recently, and yesterday announced it is likely to cull more BMI hospitals from its active list as part of an ongoing dispute.

Dr Natalie-Jane Macdonald, managing director of Bupa Health and Wellbeing, said: "For too long, the lack of competition amongst private hospitals and consultants in private practice has pushed the price of health insurance up to unsustainable levels.

"We have been saying for some time that we need more competition and efficiency amongst private hospitals and consultants in the UK and are pleased this has now been recognised by the OFT.

"We will be engaging with the OFT and, when appropriate, the Competition Commission, to ensure that their proposals help deliver better value healthcare for our customers," she added.

Bupa also noted that it would be working with the ABI and the FSA on their project.