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Clifford Chance

Clifford Chance


A thorough examination for the private healthcare sector

13 April 2012

On 4 April 2012, the Office of Fair Trading (OFT) decided to refer the markets for the supply and acquisition of private healthcare in the UK to the Competition Commission (CC) for an in-depth market investigation. 

The CC's terms of reference are wide, but it is likely to focus on certain issues identified by the OFT, including:

  • the lack of information allowing quality comparisons between different private healthcare providers and between consultants;
  • high concentration levels of providers, particularly in local geographic markets;
  • barriers to entry, such as difficulties for new private healthcare providers in getting recognised by main insurers, and incentives payments paid by providers to consultants and GPs;
  • insufficient warnings for insurance patients of the possibility of facing shortfall prices, where services exceed the level of their policy cover; and
  • the prevalence of anaesthetists forming local groups with common fee levels.

Market investigation references can be expensive and time consuming for those involved.  While the CC has two years to get to grips with the issues, a key challenge will be to predict accurately the impact of a number of important ongoing market developments and, in particular, those that will flow from the recently enacted Health and Social Care Act 2012.

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