Charity hospitals to sue over PPP chief's remarks on safety

CHARITY hospitals are set to bring a libel action against PPP, Britain's second largest health insurer, over what they claim are defamatory comments made by its chief executive.

The Federation of Charity Hospitals yesterday said it was consulting its lawyers over remarks by Peter Owen, chief executive of PPP, that allegedly implied some of its members' hospitals were unsafe.

Mr Owen was asked by a policyholder at PPP's AGM to say how he decided which hospitals would be ditched from its list of care providers.

Mr Owen replied: "There is a very rigorous process that is gone through with all of the hospitals in all the areas where we ascertain the levels of safety at the hospital and the range of services they can provide, and it is on that basis that we make the choice."

The federation, which represents 65 per cent of hospitals in the charity sector, said the implication of the remarks was that member hospitals which had been de-listed by PPP were unsafe.

Gerald Pilkington, chief executive of the federation, said: "This is a shocking statement and was made to a subscribers' meeting where the public were present. We have no doubt this is defamatory about our members and we will take whatever steps are necessary."

In the last two years, tension has risen between private medical insurers and the hospitals they use. The insurers are desperate to cut costs in order to contain a rise in premiums of 3.5 per cent a year above inflation.

Insurers such as PPP have introduced "network initiatives". Under these schemes, the insurer will only cover treatment at a specially selected network of private hospitals. Excluded hospitals face the prospect of losing a large chunk of their annual income.

John Neville, a spokesman for PPP, declined to comment on the threat of a libel action. But he said the network initiatives were merely introducing market discipline to private hospitals.

"Our initiatives address the serious over-capacity of private hospitals which means the charges are unnaturally high because they are subsidising unoccupied beds," he said.