April 2014

The Competition and Markets Authority (into which the Competition Commission was recently subsumed) made its final report which, save for some reduction in the hospital divestitures required, is much as the Provisional Report. We still have no answer on the omission of the insurers from the investigation and are really no further forward on the issues that we raised: ‘open referral’ as it is operated (a new, fuller explanation of ‘open referral’ is in preparation an will be on our website soon), the effects of pre-existing condition limitations and the cost penalties for self pay patients and those using smaller, less powerful insurers. PPF receives an increasing flow of patient complaints – all are against PMIs, none against hospitals or doctors.

When the dust has settled, we will publish a more comprehensive commentary.


February 2014

PPF did report when we made our last submission that it was “to little effect”.  So we decided that there was enough in the provisional remedies (it is a PDF – some 255 pages) that we would have another go at getting the Commission to answer the question “Why miss out the insurers?”. Have a look at our Fifth submission. We never forget that you, the patient, are central to all we do.  You can see our submission as published on the CC website


January 2014

The Commission published its Summary of provisional decision on remedies. PPF is still not impressed. We put out this Press Release: PPF response to CC’s provisional remedies.


December 2013

PPF made its Fourth submission but, to little effect. The Commission does not appear to accept that its process is flawed by the omission of the same scrutiny to insurers as they are giving to doctors and hospitals. Again, you can see the submission on the CC’s website where you can see what others have said both in formal submissions and hearings.


September 2013

The Commission published its provisional findings. PPF was, once again, disappointed that not all of the parts of the private healthcare sector had been investigated. The insurers were, in our view, missed out. Anyway, PPF is largely supportive of the findings. We have made a Third submission from PPF in response. You can also see that on the Commission’s site (click here).


June 2013

The Competition Commission (CC) is conducting a market investigation into the private healthcare market.

This page is sets out to bring together what PPF thinks will be of special interest to those using or planning to use private healthcare.

The CC was prompted to act by the referral from the Office of Fair Trading.  PPF supported that in its  OFT referral support letter following a meeting with the OFT.

From the initial submissions (including Initial submission from PPF) and its own market investigation, the CC identified a number of ‘theories of harm’ which it set out in its Annotated Issues Statement.  PPF identified the theories of harm that it thought most important to patients and made its Second submission from PPF .

On 14 June 2013, the CC published a paper offering some valuable information for people using private healthcare.

PPF has pulled out some highlights and will, as time allows, include in our guide web pages what will help you in selecting insurer, hospital and consultant. Its introduction is nearly the rationale for the founding of PPF:

In our description of the private healthcare industry we referred to the consumer ‘pathway’ to both private health cover and private healthcare. At various points on this pathway the consumer has to make choices: which private medical insurance product to buy, which consultant to see, which treatment recommendation to follow and at which hospital or clinic to be treated. If the consumer lacks the necessary information on which to base these choices, or if information asymmetries exist, it is possible that distortions may arise.”

First on insurers

The CC reports that complaints to it from individual patients about insurers are in line with PPF’s experience. Principally they are about:

  • shortfalls (patient having to find the cost difference between the doctor’s fee and the amount the insurer would pay) arising from changes in ‘fee maxima’ (the top cost the insurer would pay) [para 11]
  • the failure of the insurer to inform the patient of policy changes [para 14]
  • referral by the insurer to a ‘less appropriate or less experienced consultant’ [para 16]
  • inability to switch insurers because of pre-existing conditions [para 18]


It is worth looking at Table 1 on page 7 which sets out some customer satisfaction data on the principal PMIs.

Table 3 shows complaints notified to the Financial Standards Authority (FSA whose successor body is FCA) by the major PMIs since 2010. It shows that complaints jumped 38% over two years to 20,316 in 2012. Of these 12,165 were about Bupa (8,090 in 2010), 3,544 (1,891) about Aviva and 2,729 (3,356) about AXA/PPP.

That last deserves a special mention: the only major PMI with fewer complaints in 2012 than in 2010.  Had AXA/PPP not bucked the trend, the complaints overall would be just short of 55% up on two years previously.

What about the doctors?

Concern has been expressed about over treatment (unnecessary procedures and additional tests that increase the income of the consultant and don’t improve the outcome for the patient).  Interestingly, the CC states the following:

We think that it would be extremely difficult to quantify the extent of over-treatment in private medicine since, for example, it is difficult to find an appropriate benchmark. Certain procedures might rarely be performed under general anaesthetic within the NHS on cost grounds, for example, even if patients would prefer this. It might therefore be unreasonable to characterise the use, in private medicine, of general anaesthesia as ‘over-treatment.’ One reason consumers take out private health insurance is to avail themselves of options not generally available on the NHS.

Even if it could be shown that unwarranted over-treatment was commonplace, on the basis of this, albeit limited, review we think that lack of consumer information or information asymmetry regarding treatment options would be unlikely to be its cause. We think that there is a great deal of information available to consumers about the treatment options available to them for many common conditions. Further, we think that this is likely to increase over time since the NHS is aiming to save money and making patients aware of (cheaper) treatment options is aligned with this goal.

[para 54 and 55]

PPF has expressed concern about special relationships between doctors and hospitals – see our second submission to the OFT and our observations to the CC.

The CC finds:

Our working paper on hospital competition for clinical referrals revealed that the practice of offering consultants incentives to treat patients or refer them for tests at particular hospitals had been widespread, though since 2011 schemes had become more sophisticated and more liable to stress the clinicians’ obligations to comply with GMC guidelines regarding the best interests of their patients.

Our survey of clinicians, however, did not indicate that consultants were aware of the practice. Over 80 per cent of consultants said that hospitals either did not offer incentives to encourage them to use their facilities or equipment or that they did not know whether they did. 11 per cent said that hospitals did offer incentives. Only 3 per cent of consultants said they personally had been offered any type of incentive or benefit (such as reduced room fees, secretarial support etc) in the past five years. One possible explanation for this, apparent, under-claiming is that the practices referred to may be considered by clinicians to reflect badly on the profession. Another could be that, in the case of consultants who had accepted an incentive or benefit was bound by a non-disclosure agreement.

The GMC rules not only prevent clinicians from accepting inducements: they also require that where a conflict of interest does arise it must be declared. We did not undertake a systematic review of consultant or practice websites to determine the extent to which consultants who are involved in, for example, joint ventures with hospital groups or who own an equity stake in a hospital or clinic, disclose this. However, the impression that we formed during this investigation, from reviewing consultants’ and practices websites was that, generally, they did not do so on their websites though they may, of course, disclose this at their consulting rooms by means of a notice, for example, or tell patients in the course of their consultation.

[paras 70 and 71]

Last on hospitals:

Like PPF, the CC thinks that the new PHIN data (see our news story on this) will help with the paucity of information currently available.  PPF thinks that this part of the CC paper (‘Preliminary conclusion – choosing a hospital’) is work in progress.

It is now looking as though the hospitals will be most affected by the CC.  Press speculation – and sector insider commentary – informs this opinion. See our news item on this.

Latest news (28 August 2013):

The Commission has published its Provisional Findings and these are available on their website, Look for Notice of provisional findings and Notice of provisional remedies. PPF has produced a Press Release (response to CC’s provisional findings) which sets out our views.  It’s interesting to reflect that, as experience has shown elsewhere with the Competition Commission’s remedies, the good intentions don’t always end in improvement.  It might be that opening up local markets for inter-hospital competition will work but London looks to be a hard nut to crack. PPF will be watching this with great interest.  The Commission’s wish to get a better deal for patients is just what we want.  Worth looking at the Commission’s press release also.

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