What do you think about the Competition Commission's recently published investigation into the private healthcare market and what will it mean for insurers?
Debbie Kleiner-Gaines, Best Health Business
Short term I don’t think it will make much difference to insurers because the difference will be to hospitals and their margins.
There is this mention of the fact hospitals have overcharged to the tune of £200 million and the claims spend with insurers is around £4 billion. In context this overcharge is minimal in the scheme of things.
In the longer term if there’s increased competition, treatment providers are going to have to reduce their price and work on smaller margins.
I think there is margin that can be reduced, but the HCA made a statement saying premiums with PMI insurers are increasing at a much steeper rate than hospital charges.
From an insurer perspective what they would say is they’ve seen a reduction in individual members and the company paid members have been quite stagnant, they have not increased.
They’ve seen less new entrants, who are obviously more profitable as they’re underwritten. Therefore they’re seeing more switch business so they’ve got a customer base who are claiming more.
With open referral, the decision over consultant choice is left to the customer without any knowledge and it’s left to the insurer to make recommendations. I think insurers are going to be encouraged to have better data.
The NHS has an incredible database of statistics on consultants. If insurers are going to go down that route of guiding customers to what consultants they might use, they are going to have better data, as otherwise it’s not treating customers fairly.
Andrew Tripp, ESMI
I’m not surprised about the findings because I’ve been talking about it for years. In essence, private medicine in the UK is 40% more expensive than it is in Europe.
We’ve been operating in an almost Stalinist system with no market forces bought to bear. Therefore that’s caused the high costs of medicine.
One of the greatest ironies and this has been going on for years, is the private hospitals have had insurers over a barrel because there is no alternative and a limited supply of hospitals.
Why do we not have centres of excellence specialising in heart, orthopaedics or lungs? For example 44% of hospitals in France are owned by the private sector, and we perceive France to be a massively socialist country, but it’s not.
These hospitals are efficient and well-run in the private sector which is a market force to keep costs under control.
I believe nothing is going to change in this country. The Commission has made its statement and the insurers are impotent in their relationship with suppliers, such as the scenario that Bupa had with Spire Hospitals last year.
Outside of Central London I think nothing will change. In Central London, there’s a bit of an arms race going on in the hospitals I visit. They’re spending a lot of money at the Cromwell upgrading their machines to be able to compete with HCA.
It’s an interesting debate and I’m delighted the Commission has highlighted something that’s been an issue for a decade, if not longer.
