Private patients paying too much for care

29 August 2013

People with private medical insurance are paying too much for their care because of a lack of competition in local areas, the Competition Commission has warned.

It found more than 100 private hospitals face little competition in local areas, resulting in higher private medical insurance premiums and higher charges for private patients.

Hospital groups including BMI, Spire and HCA own many of the affected hospitals, according to the Commission.

Around 80% of private patients pay for their treatment through private medical insurance companies, very often paid for by their employer, the Commission reported.  

It acknowledged that even though prices charged by operators to insurers are set nationally, the lack of competition in many local areas, where insurers have less choice in what operator they choose results in higher premiums for consumers.

The Competition Commission has put forward proposals to improve competition, including:

  • A requirement for operators to sell hospitals if they have too much market power in a local area
  • Making it easier for other operators to enter the market
  • Preventing ‘tying and bundling' when an operator might respond to loss of business in one area by raising prices nationally.

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Dr Damien Marmion, managing director at Bupa Health funding backed the Commission's report, saying its "good news for patients".

"Millions of people with health insurance rightly expect high-quality healthcare for an affordable price. By tackling the lack of competition that has damaged the sector for too long, the Commission has understood the need for strong action and has put patients first," he said.

However, Rob Roger, chief executive of Spire Healthcare, said: "We strongly disagree with some of their report, including, that there are Spire hospitals facing little competition, that we make excessive profits and that we have disproportionate bargaining power over insurers."

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