OFT to probe UK’s private health sector

THE UK’s lucrative £5.5bn private healthcare market is to come under scrutiny from market watchdog the Office of Fair Trading (OFT), it announced yesterday.

The regulator has opened a consultation into whether the market for private hospitals and medical procedures offer customers enough choice and value, ahead of a full investigation in early 2011.

As the NHS accounts for 25 per cent of all revenues into the private health industry, the government is increasingly eager to get value for money from providers.

“We are keen to establish whether patients and buyers of private healthcare services, including the NHS, are getting the full benefit of choice and competition,” said OFT senior director Sonya Branch.

The top five private healthcare providers according to acute medical revenues, which includes names such as Spire Healthcare and Nuffield Health, accounted for 71 per cent of the UK market in 2008. OFT research has led to concerns that too much of the market is too concentrated in the hands of a few major companies, making it harder for new players to gain ground.

Branch told City A.M. that “our own research suggests markets are not working optimally,” adding that a range of submissions from people at different stages in the market alerted the OFT to the fact that “something more endemic” was wrong than any one isolated factor.

The market study will investigate concentration and market access but also whether the industry imposes any restrictions on doctors and how easily consumers can access, understand and compare provider information.

Medical insurance provider Bupa said it would support the study. “Competition in the private healthcare market is good for our customers,” said Dr Natalie-Jane Macdonald, managing director of Bupa Health and Wellbeing.

Ageing populations, longer life expectancy and reforms to the NHS have all added to the role private healthcare provision plays in the UK.