OFT to investigate private health market

Britain's consumer watchdog is preparing to probe the multi-billion pound private healthcare market.

The Office of Fair Trading said preliminary research had "raised questions" about whether the private healthcare industry, which has been steadily growing in importance as life expectancy rises, was working well for patients.

"We are keen to establish whether patients and buyers of private healthcare services, including the National Health Service, are getting the full benefit of choice and competition," the watchdog's senior director of services and public markets, Sonya Branch, said.

The study, which will be formally launched in the spring, will look at barriers to entry, market concentration and possible restrictions on the ability of consultants and other medical professionals to practice in the lucrative and growing sector. The watchdog also plans to scrutinise consumers' access to information.

Ahead of the launch, the OFT said it would be contacting key parties directly and extended an invitation to other interested players to submit their views by the beginning of February. The study could lead to a number of possible outcomes, ranging from recommendations to the industry to a potential referral to the Competition Commission.

The private healthcare market was worth more than £5.5bn in 2008, according to figures from a report cited in the OFT announcement, but is dominated by just five providers. The report from the healthcare data provider Laing & Buisson has since been updated, and values the market at more than £6bn in 2009.

Private medical insurance is the main source of funding for private healthcare providers, accounting for some 60 per cent of funds last year. NHS-funded patients were the second biggest source, with 25 per cent, and self-paying and overseas patients accounted for 15 per cent.