Lack of competition is harming private medical insurance

The Competition Commission’s investigation into private healthcare has found that a lack of competition is harming consumers’ interests.

The investigation found that low-level competition in local markets has lead to consumers paying premiums for private medical insurance (PMI) that are higher than should be expected.

Competition Commission and Private Healthcare Inquiry Group chairman Roger Witcomb said: “The lack of competition in the healthcare market at a local level means that most private patients are paying more than they should either for private medical insurance or for self-funded treatment. The lack of available and comparable information, often less than is available to NHS patients, also makes informed choices – which could help drive competition – for these patients difficult.

“We’ve also seen the existence of a range of incentives that encourage medical professionals to choose facilities on grounds other than price and quality – and we struggle to believe these can be in the interests of patients.”

The provisional findings of the investigation, released today, also found that insurers do not have enough power when it comes to negotiating prices with providers, but that they are taking to steps to attempt to keep premiums down.

Witcomb said: “Although Bupa and AXA PPP have some clout, we haven’t found that this completely offsets the power of the hospital operators. We’re aware of the disquiet expressed by some patients and consultants in relation to the actions of some health insurers.

“To the extent that they are trying to keep premiums down and promote competition on price and quality, they are doing exactly what their customers would expect.”