New Competition Commission proposals to shake up the private healthcare sector are a move forward for customers, who should see a financial benefit, Bupa has said.
The Commission's Provisional Remedies report into the private healthcare market, sets out a series of actions to end behaviour by consultants and hospital groups that lead to higher prices for both insured and self-pay patients.
The Commission estimated that the potential extra cost to customers caused by the excessive profits of certain hospital groups was between £173 million to £193 million a year between 2009 and 2011.
The health insurer noted that the Commission had previously found that no insurer had enough ‘buyer power' to offset the market power of major hospital groups.
The new report proposes that some large groups should sell off a total of nine hospitals to promote competition - especially in London.
Dr Damien Marmion, managing director, Bupa Health Funding said: "This report is a decisive step forward for customers and patients."
The report identifies high barriers to entry by new hospital operators and weak competition in many areas. The report also calls for an end to incentive payments from hospitals to consultants, along with the publication of information on consultants' outcomes and fee levels to help patients make informed choices.
AXA PPP healthcare also welcomed the publication. In a statement the company said: "We remain encouraged by the direction the investigation is taking and, as it nears its end, we believe the remedies it has proposed should significantly improve the competitiveness of the private healthcare market in the interests of consumers."
Marmion added: "The Commission is right to address the dominance of some hospital groups in areas like London. Customers will expect to see the benefit - so these proposals for hospital divestment must be carried through to the final stage.
"We are keen to support the independent publication of consultants' outcome data and fees. It is something we have always argued for, as patients want this transparency to help them to make more informed decisions."
However, he cautioned that there would be no immediate improvement: "These proposals won't provide an instant fix to the problems of the private healthcare market - it will be some time before customers will see the benefits."
Today's report details five key ‘remedies' to address failures in competition that the Commission has identified in the private healthcare market:
• divestiture by private hospital groups of nine hospitals;
• restrictions on agreements under which private hospital operators operate private patient units (PPUs) in NHS hospitals;
• ending consultant incentive schemes that encourage patient referrals to particular facilities or for particular treatments or tests;
• requiring the collection and publication of information on the performance of private hospitals and individual consultants; and
• making private hospital operators require consultants to provide fee information in standard format as a condition of practising there.