Competition Commission: The remedies

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The Competition Commission (CC) has recommended a ban on consultant incentive schemes and called for greater transparency and price controls following its investigation into the private healthcare market.

The CC's notice of possible remedies for consultation include requiring operators to sell hospitals in areas where they derive significant market power from the ownership of local clusters; a ban on some incentive schemes; prevention of ‘tying or bundling' when a hospital network operator might respond to a loss of business in one area by raising prices nationally; possible entry enhancing measures; and the provision of better information on prices and quality for patients.

The investigation criticised existence of incentive schemes operated by private hospital operators which encourage patient referrals for treatment at their facilities, whether in cash or kind and whether related to the value or referrals or not.

It concluded such incentives including fee per referral schemes and equity ownership by consultants of private health facilities were producing harmful effects as choosing facilities on grounds other than price and quality could lead to "exessive diagnostic tests or consultations."

The CC recommended for private hospital operators to be prohibited from offering consultants any cash or non-cash incentives to encourage them to undertake work at their facilities.

This would permit private hospitals to make certain facilities, for example consulting rooms, available only if they could not be deemed to constitute an incentive to the consultant to bring work to the hospital operator, for example if it could be demonstrated that they were being charged a fair market price.

The investigation has also identified a lack of publicly available information on consultant performance and fees as an area causing consumer detriment, particularly where patients may face unexpected shortfalls in their PMI reimbursement.

The CC is making a recommendation to consultants and hospitals to publish initial consultation fees and require consultants to provide a list of proposed changes to patients in writing in advance of any treatment.

Health departments should also collect and publish their most appropriate patient-facing website individual consultant performance indicators to produce a "like for like" comparison between consultants, the watchdog added.

The CC is also seeking feedback on price control, which would set maximum prices at hospitals it would consider to have market power, although it acknowledges this may not be an appropriate course of action.

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