AXA PPP has been singled out by the Competition Commission for failing to recognise a new private hospital in Bath, a report by the Competition Commission has revealed.
The watchdog said AXA PPP's decision not to recognise the new hospital, Circle Bath, "would appear to have been based on the importance of its broader, national commercial relationship with BMI rather than specific contractual terms which would have obliged it to incur higher hospital charges at the [BMI] Bath Clinic as a result of recognising Circle Bath."
Last year the Office of Fair Trading had referred issues in the private medical insurance market, including barriers to new competitors entering the market, onto The Competition Commission.
Circle entered the Bath private healthcare market in March 2010 with a business model where in return for committing to undertake a certain proportion of their work, consultants would be entitled to an equity stake in the business.
The BMI Bath clinic, which had operated in the area for 30 years, sought to match the new entrant's business model by introducing its own consultant incentive or ‘loyalty' schemes. Consultants were also required to agree they would not enter into any form of any agreement or contract with any competitor relating to the operation of a private medical practice.
AXA PPP was important to Circle Bath as it had a 25% share in the PMI market, but as a result of ‘consultant drag', Circle faced the proposal that consultants would continue to treat Bupa patients at the Bath clinic rather than split their lists.
Bupa signed Circle to its network for a three year deal, WPA who were approached by Circle did not operate a network and Aviva eventually signed the hospital to its Key network.
According to AXA PPP internal documents, the insurer decided not to include Circle Bath on the grounds that it needed to take into account the broader national relationship it had with BMI, AXA PPP did not need addition provision in the Bath area based on existing subscriber numbers and Circle Bath did not offer any additional services to the Bath clinic.
