The Competition and Markets Authority (CMA) has, in its private healthcare review, taken the necessary steps towards creating a fair and equitable UK private medical market, says Mercer. However, the consultancy questions the impact of the divestiture ruling and the effect this may have on the ability of the UK private medical market to provide an affordable and efficient service to its patients.
On 2 April, the CMA released its final report on the investigation into anti-competitive practices within the UK private medical market. The findings aim to open the market up to greater competition but, according to Mercer, may in fact lead to greater uncertainty within the industry, ultimately stifling growth.
Following the CMA review, consultants will be required to be more transparent around their fees, including providing patients with information in a set format made available by the healthcare facility where the consultant practices.
Naomi Saragoussi, Principal in Mercer’s Employee Health and Benefits business commented: “Greater access to data will make it easier for employers to differentiate the service propositions of insurers and administrators and move away from purely cost based discussions. We urge employers to use this fundamental change as a springboard for re-evaluating whether their current healthcare provision remains relevant for their employees’ needs.
“Given that approximately 80% of individuals covered by private healthcare are covered as part of an employer sponsored arrangement, encouraging individual patient choice has the potential to directly affect the dynamic of group schemes. Multiple individual buying decisions may not equate to the same buying decision the employer has historically made for the scheme as a whole, in terms of hospital and consultant eligibility.”
Ms Saragoussi added: “It is paramount that, at a time when patients are in emotional turmoil, they are able to easily review all their options. This requires a level of transparency in the market that will prevent clinicians from charging over the typical market rate. It also requires hospitals and consultants to provide details of clinical outcomes before a scheduled review in 2019. We hope that this investigation will lead to private medical administrators, hospital groups and clinicians working collaboratively with the patient to achieve better outcomes.”
In the report, the CMA also requires that one hospital group divest itself of one or more of its hospital facilities. Mercer believes that the above decision will be rigorously challenged by the hospital group who has made major capital investments into these hospitals. It is of concern to the consultancy that the group is being penalised for achieving such a high status within their respective clinical areas. This decision, in the short term, is likely to have little impact on the market within London and the South East other than potentially stifling growth during this period of increased uncertainty.
Mercer welcomes the decisions made by the CMA but maintains that any differences between hospital groups, private medical administrators and clinicians needs to be resolved in a practical fashion. This will allow the market, which has remained static for a considerable amount of time, to invest in growth and offer sustainable costs to the private medical market.
Findings from the CMA are listed below:
- Review of Private Patient Units situated on an NHS site to ensure that the arrangement is competitive
- An embargo on clinician incentive schemes from private hospitals to use their facilities. Clinicians will be required to declare financial interests publically on their website
- Publish information on hospital and consultant performance through an industry funded organisation
- Consultants need to be more transparent about their fees allowing patients to make informed decisions
Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in 43 countries and the firm operates in more than 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @MercerInsights |
