Insurers promise to pass healthcare competition savings on to customers


Private medical insurers (PMIs) are promising to pass on any savings made from the Competition and Market Authority's (CMA) final remedies for the private healthcare market to customers.

Insurers welcomed the CMA's report that concludes two years of investigation by the Office of Fair Trading and Competition Commission, noting that it put in place several positive changes that would help ensure better value for money for private patients.

As part of its final report the CMA has compelled HCA to sell either the London Bridge and the Princess Grace hospitals, or the Wellington hospital and Platinum Medical Centre in central London.

However it dropped all provisional threats to force another hospital group, BMI Healthcare, to sell seven of its hospitals around the country.

It also made a series of other mandates, including banning some incentives to medical practitioners and requiring greater transparency of costs and clinical performance.

Its August report found a lack of competition in the market had cost policyholders at least £173m a year between 2009 and 2012.

Bupa, the insurer with the largest market share, said the actions were a step in the right direction, but added that the sector must work together and go further if it was to drive better value for customers.

Bupa Health Funding managing director Dr Damien Marmion said the report "has some cautious but positive steps in the right direction" for customers and patients.

“We’re pleased the CMA has carried through measures to end consultant incentives schemes and require the publication of better information to patients on consultant outcomes and costs. We are ready to fund our share of the new information body for the private sector because it will increase transparency and help patients make more informed choices.

“Bupa will pass on any money saved from increased competition amongst hospital providers to our customers,” he added.

Axa PPP said the current situation had led to excessive concentration of hospital ownership, particularly in London, which had resulted in inadequate competition, with inappropriate incentives being given by hospital operators to consultants to encourage them to direct business their way and/or undertake unnecessary tests or treatments.

“Axa PPP especially welcomes the banning of consultant incentives that encourage some specialists to refer their patients to particular facilities. And the Authority’s call for healthcare providers to make available better information on the quality of their services and clinical outcomes is also to be applauded. Hospitals and consultants have kept patients in the dark for too long and it is essential that they are given the necessary facts to make informed choices,” it said.

Aviva added that together with improved transparency on the cost and performance of individual consultants and private hospitals, allowing customers to exercise choice, a much improved market would ensue with customers able to access high quality care at more affordable prices.

Aviva UK Health managing director Mark Noble said the remedies would, in time, “create a more sustainable and fairer market for all, and will engender better value for money for private healthcare customers.

“The removal of market power in London in particular will drive a much healthier, competitive approach to pricing, while all patients and GPs in the UK will be able to make more informed decisions on medical treatment through the publication of cost and performance data.”

However, he added that the customer benefits of these remedies would take time to manifest themselves.

Simplyhealth added that the findings, when implemented, would ultimately benefit the market and create a private healthcare landscape that was fairer for all.

Chief executive Romana Abdin said: “For Simplyhealth the most important outcome is around transparency of information, allowing patients to make informed choices about their care.

“We’re also pleased private medical insurers will have a collaborative role to play to aid and shape this flow of information. We have already begun engaging with the relevant organisations that will collate and publish consultant and hospital outcomes.”

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