CMA provisional findings and possible remedies in private healthcare market investigation (II)

The Competition and Markets Authority has released its provisional findings on its re-examination of the private healthcare market.

The Competition Commission started the original investigation in April 2012 and in April 2014 the then newly established CMA ordered HCA International to divest hospitals in central London to address what the CMA found to be adverse effects on competition in the private healthcare market.  HCA then successfully appealed the CMA’s decision before the Competition Appeal Tribunal (CAT) and in November 2014 the CAT remitted certain issues back to the CMA to consider afresh.

The CMA has adopted most of the findings in its original final report and provisionally concluded that its revised Insured Price Analysis indicates that HCA charged higher prices than its nearest competitor.  However, the CMA is not in a position to conclude on the size of the difference.  It has also provisionally concluded that there is no basis to change its original finding of an adverse effect on competition in relation to self-pay patients in London.

However, the CMA is consulting on a wider category of remedies beyond pure divestment.  The remedies being consulted on include (i) divestment by HCA of up to two hospitals (ii) a requirement on HCA to give competitors access to its facilities and (iii) restrictions on HCA’s expansion in central London.  The CMA has rejected other remedies including a light touch price control and restrictions in the way that HCA contracts with insurers.

The CMA has invited comments on its provisional findings by 3 December 2015.  A key test of the revised remedies will be how attractive they are to HCA and competitors and how capable they are of implementation.

The CMA is due to publish its final report on the remittal in March 2016.  Yet that is unlikely to bring closure to the CMA’s wider probe of the private healthcare sector.  In particular, its fee information remedy requiring publication of consultants’ fees remains in abeyance following an appeal by the Federation of Independent Practitioner Organisations (FIPO), currently before the Court of Appeal.  Whatever the outcome of that appeal the CMA will need to consider whether its remedies remain fit for purpose in light of changed circumstances in the market that it and its predecessor have examined in a procedure that began over three years ago.

CMA news release

Notice of provisional findings

Provisional Findings Report

Notice of possible remedies

CMA case page