In its market study published on 8 December, the OFT set out a number of areas in which it finds that competition in the market may not be as effective as it could be. These are:

  • a lack of easily comparable information available to patients, GPs or health insurance providers on the quality and costs of private healthcare services
  • the limited number of significant private healthcare providers and of larger health insurance providers at a national level
  • the relationship between healthcare providers and larger insurance providers (in particular in some local areas) in certain geographical areas
  • issues potentially creating barriers to entry
  • issues in relation to consultant incentives

The OFT has consulted the Department of Health and a number of health sector bodies.

The OFT also notes that as a result of concerns raised during the study, the Financial Services Authority will work with the Association of British Insurers and health insurance providers on enhancing clarity for patients, so that they understand the limits applying to amounts payable under their insurance policies and when they may have to make shortfall payments for their treatment.

The OFT's Chief Executive, John Fingleton, said that "Our provisional findings suggest that private patients in the UK don't have access to easily comparable information on quality and costs and that competition is also restricted by barriers to new private healthcare providers entering and being able to offer private patients greater choice. It is important that patient demand and choice are able to drive competition and innovation in this market with a view to better value for all patients. We have provisionally decided that these significant concerns merit a more in-depth investigation by the Competition Commission."

The OFT now requests comments on its provisional findings before 30 January. See its consultation on the proposed market investigation reference. The full market study case page and report can be found here. A final decision is anticipated before the end of March 2012.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

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The original publication date for this article was 09/12/2011.