New powers for the CMA in the private healthcare sector

Stethoscope Print publication


We have reported previously on the Competition Commission’s investigation into the private healthcare market, the final report of which was published on 2 April this year. Now the Competition & Markets Authority (the CMA), which has assumed the functions of the Competition Commission (as well as the competition law functions of the Office of Fair Trading), has made an order – the Private Healthcare Market Investigation Order 2014 – designed to address the adverse competition effects identified by the Competition Commission.

The most significant element of the Order is that the CMA will be able to review arrangements between NHS Trusts and private hospital operators for the operation of private patent units (PPUs). There is no obligation to notify these arrangements but where the CMA has a concern about these, it will be able to call them in for review. Such a review could well be prompted by complaints to the CMA from aggrieved third party suppliers who are struggling to break into a local market with entrenched incumbent suppliers.

The CMA will prohibit arrangements which significantly lessen competition in the relevant local area or it may – in exceptional circumstances – accept undertakings from the parties concerned.

As well as the power to review PPU arrangements, the Order restricts the benefits and incentive schemes that may be provided to referring clinicians by private hospital operators, and requires collection and publication of information on the performance of private healthcare facilities and of consultants providing private healthcare, and on consultants’ fees.

The Order also envisages the establishment of an industry-wide “information organisation” to improve transparency across the sector and has instituted a consultation as to how this organisation will operate.

The Order’s provisions concerning PPU arrangements come into force immediately while those relating to clinician referral incentives for the most part come into force on 6 April next year. The information obligations also come into force on 6 April 2015, although not those relating to consultants’ fees, which are the subject of an ongoing appeal to the Competition Appeal Tribunal.

If you think your business might be affected by the Order, please do not hesitate to contact the writers.