A competition ruling spells trouble for new health-care models
By A.McE.
BRITAIN’S private health-care occupies an awkward position in a country where the taxpayer-funded National Health Service (NHS) is often referred to as a “national religion”. Private health's revenues of around £4.2 billion ($7 billion) are minuscule in comparison with the £95 billion spent yearly on state-funded care, and any expansion is met with indignant cries of “privatisation”.
Yet the NHS relies on its private counterpart to take pressure off waiting lists, and a growing number of NHS management trusts are in partnership with commercial outfits. Hospital Care America (HCA), for example, runs the Portland Clinic, where royals and celebrities like to give birth, and has opened three floors of consulting suites in the glitzy Shard building near its London Bridge hospital. Besides ministering to the capital's well-off, it provides cancer services for NHS hospitals in London, Essex and Manchester.
On January 28th, however, the Competition Commission, Britain's antitrust watchdog, ruled that the private health market lacked enough players to be competitive. It concluded that patients were being over-charged by between £173m and £193m a year. To remedy this, it wants HCA to sell off two of its main London hospitals and the South-African BMI group to shed seven hospitals nationally.
Sensibly, the Commission says it wants to give more bargaining power to private insurers, whose business model has been languishing in leaner times. About 700,000 customers left the market in the five years to mid-2013, and the number of privately-insured Britons is at the same level as it was in 1995.
Yet it is not clear that the measures will enhance patients’ choice of provider, nor encourage innovation in the way hospitals are run. The Commission takes a dim view of employee-led models of ownership, on the grounds that these might induce doctors to refer patients to treatment centres in which they have a financial stake.
That is particularly bad news for Circle, the only taxpayer-funded hospital operator in Britain outside the NHS. It has such an arrangement with its clinical staff and might be forced to unwind it, unless it can face down the Commission in a legal challenge. Another largely employee-owned newcomer, the Kent Institute of Medicine and Surgery (KIMS), is concerned at the implications of the ruling for its business model. Both KIMS and Circle are testing whether merging the roles of doctors and managers might work better than the traditional NHS divide between pen-pushers and clinical staff.
Openness with patients about the financial rewards of such set-ups is a sound precaution. But quashing new ways of doing things may simply result in stymying innovation, rather than promoting greater variety in a heavily centralised heath system. Ironically, Circle has just signed a deal with CITIC, a Chinese multinational, to provide advice on setting up an employee-owned health service there. Letting a thousand flowers bloom at home is turning out to be rather trickier.
