Bupa has delivered a strong response to news that concerns over health insurers' doctor payment schedules are to be reported to the FSA.
The health insurer said that without the schedules premium costs would spiral, leading to a reduction in demand and income for the private medical sector, with "obvious" implications for both private and NHS hospitals.
Earlier this week Lord Sassoon, the Commercial Secretary to the Treasury, said he would report House of Lords concerns raised in response to a question by Lord Walton.
A former General Medical Council chairman, he asked: "Whether fixed fee schedules and restricted hospital and consultant networks...were in the public interest?".
The question was put as part of a dispute between health insurers and the medical profession over insurers' plans to implement fixed fee treatment schedules with defined consultant networks, and to require data consultants feel will impact on patient care and choice.
Dr Natalie-Jane Macdonald, managing director of Bupa Health and Wellbeing, said: "Customers who choose to be treated in a network hospital benefit by paying a lower premium.
"Networks give patients the reassurance that the consultant treating them and the hospital caring for them meet high clinical and customer service standards. We therefore believe that they are in the public interest."
"It is our view that if such networks did not exist, private healthcare costs could spiral leading to premium increases. Furthermore, we also believe that it is not in consultants' interests because it could impact on the viability of their private practices.
"Ultimately, without these networks there could be a reduction in demand and income with obvious implications for both private and NHS hospitals."
As an example, Bupa pointed to its MRI network, which gives customers access to a nationwide network of scanners and a 30% cut in prices for scans to Bupa. The insurer said this released money for funding new drugs and treatments for customers.
The Federation of Independent Practitioner Organisations (FIPO), representing medical organisations said members had "overwhelming concern" for patient choice and continuity of care.
Geoffrey Glazer, chairman of FIPO, commented: "More and more patients are unaware of the restrictions in their policies until they come to need them although not all insurers are involved."
