The UK’s biggest private healthcare provider, BMI, has been spared from having to sell off seven hospitals after the new competition watchdog heavily watered down plans to shake up the independent sector.
The Competition and Markets Authority (CMA) dropped the provisional plans affecting BMI under its final ruling published today.
Instead it is ordered US-owned rival HCA to sell one or two of its sites in London – prompting the company to threaten legal action.
An initial ruling by the Competition Commission last year had found weak competition was pushing up prices for patients in the £5.5bn private healthcare market.
It said the dominance of the three biggest hospital groups, Spire, BMI and HCA, had caused “consumer detriment” of up to £193m a year.
The commission initially proposed ordering 20 sites to be sold. But this was later scaled back to nine, before the final ruling restricted the sell-off to HCA’s sites in the capital.
It leaves BMI, which owns 66 hospitals and treatment centres across the country, in the clear after the group had been facing the prospect of selling four sites in outer London and three others outside the capital.
Chief executive Stephen Collier said CMA had reached a “sensible, measured and fair conclusion”.
But HCA has been told it must dispose of both the London Bridge Hospital and the Princess Grace Hospital − or alternatively the larger Wellington Hospital, including its Platinum Medical Centre.
The firm issued a robust response to the decision, saying the ruling would punish healthcare innovation and that it “intends to vigorously challenge it in the courts”.
Mike Neeb, president and chief executive of HCA International, said: “The CMA’s main allegation appears to be that HCA is too successful, too efficient, too innovative. It wants to punish HCA for that success.
“This can only discourage future investment and innovation in healthcare, and potentially other industries.”
However, Roger Witcomb, chair of the CMA’s private healthcare inquiry group, said the sell-off would “significantly increase competition in central London”.
Health insurer Bupa said the ruling was a cautious step in the right direction, but questioned the decision not to order any hospital sell-offs outside the capital.
Dr Damien Marmion, managing director of Bupa health funding, said: “Self-pay and insured customers will be surprised that no action has been taken outside London where excess profit and consumer detriment has been identified.”
- CMA final report: Private healthcare market investigation