Turmoil in Spain and Australia hits Bupa

The private medical group Bupa showed the scale of the task facing its new management team yesterday as turmoil at its Spanish and Australian arms saw half-year profits plunge 15 per cent to £218m, while its UK business faces a Competition Commission inquiry.

Since Stuart Fletcher took over as chief executive last March, Bupa has splashed out on a string of acquisitions, and overhauled its British operation by splitting its health insurance and clinics businesses into separate divisions. The move saw a string of top executives depart, but couldn't stop UK profits falling – last year they dipped by a fifth to £109.7m.

This time around the medical group, which has 13 million customers in 190 countries, saw its profit in the UK soar – more than doubling from £26.4m in the first half of 2012 to £59.2m this year. That's despite its number of customers actually falling 3 per cent to 2.8 million, but Mr Fletcher admitted the higher profit came from "improved claims cost management", that is, paying out less to sick and injured members, which was a core complaint lodged by policyholders to the Competition Commission.

As the body investigates whether the £5bn private healthcare industry is hampered by a lack of competition, complaints about Bupa include claims that its practices deny "an option of choice of medical consultant", and that "Bupa now has a policy of only using surgeons who will operate at the least cost to themselves".

But Mr Fletcher said: "The Competition Commission clearly stated in April that absent Bupa and insurers implementing caps and controls on what they're willing to pay consultants and hospitals for procedures, there would be very little constraints on the rising costs of premiums. We're managing both the quality of care provided and the cost of care by only working with those consultants who work to pre-agreed fees."

Bupa, whose marketing effort includes sponsorship of the Great North Run, set new caps on fees it pays out for around 250 procedures last year.

"Most fees came down," Mr Fletcher said. If patients want to use surgeons who charge more, "then they know a top-up fee will apply".

The Competition Commission is examining whether the dominance of just five private-sector hospital operators – General Healthcare Group, Nuffield Health Hospitals, Ramsay Health Care UK, Spire Healthcare and HCA – holds back competition.

Elsewhere, the medical insurer saw half-year profits in its Australian business fall 9 per cent to £115.9m, which it blamed on regulatory reforms in the country, while in austerity-hit Spain profit fell 13 per cent to £46m.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Guru Careers: Tax Manager / Accountant

£35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...

Day In a Page

Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen
A Very British Coup, part two: New novel in pipeline as Jeremy Corbyn's rise inspires sequel

A Very British Coup, part two

New novel in pipeline as Jeremy Corbyn's rise inspires sequel
Philae lander data show comets could have brought 'building blocks of life' to Earth

Philae lander data show comets could have brought 'building blocks of life' to Earth

Icy dust layer holds organic compounds similar to those found in living organisms
What turns someone into a conspiracy theorist? Study to look at why some are more 'receptive' to such theories

What turns someone into a conspiracy theorist?

Study to look at why some are more 'receptive' to such theories
Chinese web dissenters using coded language to dodge censorship filters and vent frustration at government

Are you a 50-center?

Decoding the Chinese web dissenters
The Beatles film Help, released 50 years ago, signalled the birth of the 'metrosexual' man

Help signalled birth of 'metrosexual' man

The Beatles' moptop haircuts and dandified fashion introduced a new style for the modern Englishman, says Martin King
Hollywood's new diet: Has LA stolen New York's crown as the ultimate foodie trend-setter?

Hollywood's new diet trends

Has LA stolen New York's crown as the ultimate foodie trend-setter?
6 best recipe files

6 best recipe files

Get organised like a Bake Off champion and put all your show-stopping recipes in one place
Ashes 2015: Steven Finn goes from being unselectable to simply unplayable

Finn goes from being unselectable to simply unplayable

Middlesex bowler claims Ashes hat-trick of Clarke, Voges and Marsh
Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Atwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action