GP hospital incentives facing ban

Regulator will order private operators to stop handing doctors cash and free secretaries

Private hospital operators are set to be banned from providing financial incentives to doctors who refer patients to their facilities, as the Competition Commission looks to crack open the £5bn market.

A delayed inquiry report into private hospitals, which are dominated by five operators, is finally due to come out next month having been due in June.

Private medical insurance typically costs nearly £1,100 a year, according to healthcare intelligence group Laing & Buisson, an amount that any commission action could help to push down.

The commission is expected to take a hard line with the industry. This reflects the increasingly tough stance the commission is taking on the markets it investigates, from tackling the Big Four auditors to forcing airport group BAA to sell-off Gatwick and Stansted.

Sources aware of the thinking of the inquiry team, which is led by former National Power finance director Roger Witcomb, said they have been particularly concerned by referral fees and other incentives offered by the operators.

These can even include providing doctors with free secretarial support, which the inquiry worries ends up effectively coercing them into referring patients to their hospitals.

A source said: "Dodgy-looking incentives are not the sort of thing that the regulator is going to look kindly on. Making decisions based on incentives is unlikely to be helpful towards competition."

The big players are: General Healthcare Group, which is owned by private-equity giant Apax Partners; Spire, which buyout group Cinven bought from Bupa for a 2007 top-of-the-market price of £1.4bn; registered charity Nuffield Health; Ramsay Health Care UK, the British subsidiary of an Australian private-hospital empire; and HCA, a US-listed behemoth that made a revenue of $33bn (£21.6bn) last year.

The commission is also concerned that some regions appear to be overwhelmed by just one of these groups. For example, one submission to the commission argued that HCS had a "super-dominant position" in cancer services in London, owning six out of the capital's seven elite private hospitals.

The private equity-owned pair might particularly suffer should the commission demand sell-offs of their hospitals. Forced sales typically mean low price tags, potentially "devaluing" Apax's and Cinven's investments, according to an industry insider.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine