Britains private health-care business has been the subject of an inquiry by the Office of Fair Trading (OFT) following a complaint that the market is insufficiently competitive. Insurers and hospital groups who operate closed networks are the target of the complaint from Circle, a healthcare partnership which operates a network of UK hospitals co-owned by the clinicians and staff who work in them.
The OFT has conducted an initial enquiry and has to decide whether it will continue with a full investigation. Circle argues that agreements between the bigger private hospital providers and health insurance companies such as Bupa, AXA/PPP and Aviva, which control three-quarters of the market between them, could be anti-competitive.
The big four private hospital companies provide 60 per cent of the private healthcare market and network agreements mean that these companies negotiate contracts with insurers to offer lower prices in exchange for patient volumes. Insurers can refuse to reimburse patients who go to a hospital that is not part of the agreed network.
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