News story

CAT ruling on private healthcare remittal

The CAT has agreed to the CMA’s request to quash part of its final report into the private healthcare market investigation and remit it back to the CMA to reconsider and reach a new decision.

Stethoscope

Specifically, the decisions that have been quashed relate to:

  • the finding that there was an adverse effect on competition (AEC) in the markets for the provision of private hospital services, leading to higher prices being charged by HCA to private medical insurers across the range of treatments for insured patients in central London
  • the decision to remedy this AEC by requiring HCA to divest either London Bridge and Princess Grace hospitals or alternatively the Wellington Hospital including the Wellington Hospital Platinum Medical Centre

After the final report was published, the Competition and Markets Authority (CMA) was ordered by the Competition Appeal Tribunal (CAT) to grant access to HCA’s advisers to certain econometric analysis undertaken by the CMA (the insured pricing analysis) in a data room. HCA’s advisers identified certain errors in the insured pricing analysis which formed part of the evidence base for the AEC finding.

The CMA has accepted that as a result of certain errors identified by HCA’s advisers, it made a procedural error by not re-consulting with HCA on its insured pricing analysis, which the CMA had revised following an earlier consultation during the investigation.

The CMA submitted to the CAT that the most appropriate course of action would be for the matter to be remitted to it to consider further representations on the insured pricing analysis. The CMA also indicated to the CAT that it would take into account any representations received from parties on whether there has been a material change of circumstances since its decision was published in April 2014. In its ruling today, the CAT acknowledged that the CMA has taken a ‘responsible’ approach to dealing with the matter.

The CAT’s ruling agrees to the CMA’s proposals for the quashing of the relevant decisions and the remittal of the matter to the CMA. The CAT has also ordered that the parts of HCA’s challenge dealing with other aspects of the CMA’s report, as well as certain parts of a separate challenge by AXA PPP, should be stayed pending the outcome of the remittal. There will be a hearing at the CAT for the separate challenge by AXA PPP and the Federation of Independent Practitioner Organisations commencing on 23 January 2015.

The CAT’s ruling does not have any effect on the remainder of the CMA’s final report, including the CMA’s conclusions as to the existence of 2 structural features identified in the report which led to it finding AECs in the markets for the provision of private hospital services and the CMA’s finding of an AEC in relation to self-pay patients.

The CMA has already published an order to remedy other findings made by the CMA in the private healthcare investigation. These are:

  • a power to review arrangements for a private hospital to operate a private patient unit in an NHS hospital in its local area
  • provision of better information for patients on the performance of consultants and hospitals
  • a crackdown on benefits and incentive schemes provided to referring clinicians by private hospital operators

Earlier this month, the CMA announced that it had approved arrangements proposed by the Private Healthcare Information Network (PHIN) to establish an organisation which will make private healthcare information via an independent public website. This will give patients access to the information they need on performance and fees to make informed choices on where to have treatment.

All information on the remittal, including a timetable, will be available on the private healthcare case page in due course.

Published 23 December 2014