The ABI has responded positively to the Office of Fair Trading's (OFT) decision to conduct a study of the private healthcare (PH) market.
Its reply follows clarification from the OFT that the study will focus primarily on the provision of private healthcare treatment and services.
However, due to what it notes as the ‘critical input' of private medical insurance (PMI) into private healthcare, it will, where relevant, consider the relationship between PMI providers and healthcare providers.
Responding to the OFT announcement, Nick Starling, director of general insurance and health at the ABI, said: "We support the OFT review into the private healthcare sector.
"A competitive marketplace benefits customers and is in the best interests of everyone involved, whether they are NHS patients who also use private healthcare, people who self-fund or use private medical insurance. We will work with the OFT and wait for the conclusion of the review," he added.
The Federation of Independent Practitioner Organisations (FIPO) has already welcomed the move, saying it was 'gratifying to see that the concerns expressed by our member organisations over the impact that the implementation of fixed fee schedules and restrictive consultant networks will have on patient choice and continuity of care, are reflected in the scope of the study.'
The scope of these investigations include whether there are any non-structural barriers to new entrants in the PH market.
In this area, the OFT highlights the hospital network agreements between certain PH and PMI providers, asking if these agreements make entry and expansion difficult for new PH providers?
And subsequently, it may ask what the benefits of these agreements are from the perspective of the PMI and PH provider respectively and ultimately to consumers?
The OFT also questions if the actions of PH and PMI providers produce constraints on the freedom of consultants to practice to the detriment of consumers?
In this arena, its enquiry could also focus on what PMI providers' policies are regarding allowing their policy holders to 'top up' fees paid to consultants above the benefit maximum, and how PMI providers choose which consultants and other medical professionals are included on their approved lists?
However, the OFT did note that despite the PMI sector being relatively concentrated (the top five providers account for 80% of the market) it was not concerned that barriers to entry were particularly high.
Hence, will not be examining:
• data or information relating to entry or expansion in the provision of PMI
• whether the market for the provision of PMI is competitive
• innovation and diversity of PMI products
• how consumers select their PMI product, for example on the basis of reputation of the provider, or branding of the product.
