BUPA's bid to purchase the Community Hospitals Group has re-awakened the debate over whether it shou...
BUPA's bid to purchase the Community Hospitals Group has re-awakened the debate over whether it should be acting as a service provider as well as an insurance company.
The company put in an offer of £230m for the chain of 21 hospitals, increasing the provider's bed count by 824 and making the company the largest provider of private healthcare in the UK.
Should the move go ahead, BUPA will have a 40% share of the privately insured market and over 30% of acute surgical beds in private hospitals in the UK.
Philip Fowles, sales and marketing director at BCWA, said: "It is hard to see how a vertically integrated business can still provide adequate service levels to the rest of the industry. Because BUPA hospitals are so close to BUPA insurance, how independently is it treating the rest of the sector?"
Robin Payne, business development manager at Exeter Healthcare, said: "The market is increasingly concerned about the potential of one provider having a 30% share of beds. It does not matter which market is in question - when one provider dominates the market there is a potential for consumer detriment."
BUPA said the sale will not impact on its membership. Claire Cater, head of public affairs, said: "Of the 21 hospitals, 18 are already in our network so we already have an agreed pricing structure with them." She added that if there is any geographical overlap in hospitals, BUPA would be prepared to sell some of its hospitals.
In response to the offer, a number of bodies, including the British Medical Association and the Charity Hospitals Federation, have filed submissions to the Office of Fair Trading (OFT) on the grounds that it will give the company a dominant position in the PMI and private hospital markets.
If the case goes ahead, it would be the second time the company has been investigated by the OFT.
BUPA said that it will not have a monopoly on the market because there are bigger private hospital providers who would stand to control a larger sharer of the market than BUPA if they bought CHG.
If it does purchase CHG, it will have a 22.7% stake in the private hospital market compared with 26% if General Healthcare purchased the group.
