Bupa was ‘hugely disappointed' with the Competition and Market Authority's change of direction in its provisional remedies on the private healthcare market, according to the summary of the evidence hearing between the CMA and Bupa published this week.
Bupa said that it "strongly agreed" with the CMA's conclusion that there were adverse effects on competition in central London caused in particular by HCA's "high market concentration and dominant share."
At the hearing Bupa said that it was concerned that there was "no sufficiently robust" evidence to support the CMA's view that the new market entrant, Cleveland Clinic would be an effective constraint on HCA by 2022.
As part of its evidence-gathering process, the CMA held hearings with a range of industry customers and interested parties over recent months.
Bupa said that it did not believe that the evidence available supported the conclusion that Cleveland Clinic would enter the market in the time frame envisaged by the CMA and effectively constrain HCA by 2022.
Previous experience suggested that new hospital facilities were often hit by unexpected issues that caused delays. Bupa said that the evidence provided by Cleveland Clinic described its entry as ‘complicated'
The insurer also said that The CMA's NPV analysis contained material errors which, when corrected, would show that divestment would be proportionate.
In addition The CMA had "not discharged its statutory duty by properly considering alternative remedies to address the clear customer detriment the CMA has identified such as a more limited divestment, the removal of restrictive clauses in insurer contracts or the imposition of price control mechanisms."
Bupa also highlighted that GPs directed their patients to specific consultants, with insurers having limited ability to influence the flow.
Of the oncologists practising in central London, it believed that approximately 15% had equity stakes in HCA facilities (based on information HCA published on its website).
Bupa had submitted evidence showing the patient flows of consultants with equity relationships compared to consultants that did not have these equity relationships or arrangements.
Consultants with such relationships took a far higher proportion of their work to HCA than the consultants that did not.
The insurer also warned that Bupa HCA "had grown in its underlying strength since the original report, so the balance continued to tip in HCA's favour."
The hearing summary said that HCA accounted for more of Bupa's claims spend, a higher percentage of Bupa patients were treated there, it was even more dominant in critical specialisms like cancer and cardiology and it controlled more primary care referrals into its system through its GP franchises in the City.
Bupa estimated that it accounted for approximately 20% of HCA's revenues.
Further announcements and a final stage on the investigation into the HCA and the London private hospital market are expected in the coming months, COVER understands.
Alex Perry, general manager, Bupa UK Customer said: "The CMA has confirmed that there isn't enough competition in central London, with HCA dominating the private hospital market and charging higher prices. This means our customers pay higher premiums than they should.
"This situation will likely continue until 2022 at the earliest, when a new hospital company might bring more competition to one part of London.
"Customers will continue to be penalised by higher prices and one possible new entrant in six years' time is not enough to make a difference. We ask the CMA to make sure it fulfills its responsibility and acts firmly to address this problem.
"We will continue to do all we can to get a better deal for our London customers."
Further reading
CMA: Competition problems still need addressing in private healthcare
