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Friday, February 12, 1999 Published at 16:32 GMT


Private health insurance investigated

PPP has been accused of pushing patients to use its own clinics

The multi-million pound private health insurance industry is under investigation by the Office of Fair Trading.

The industry has been accused of anti-competitive behaviour, including sending patients to "preferred hospitals" and market rigging.

The information has come to light after Sir Richard Needham, chairman of the Heart Hospital in London, made a complaint against PPP health insurance.

Sir Richard says the company has been trying to prevent the hospital competing against its own London clinics.

In a letter to the Director General of Fair Trading, Sir Richard claimed PPP was refusing to list the hospital as an approved clinic "with full reimbursement of treatment costs".

Blatant abuse

He alleged the firm was instead trying to push patients into its own hospitals, including the nearby Harley Street Clinic.

Claiming "clear unfair competition", Sir Richard said PPP was guilty of "a blatant abuse of market power to retain its grip on the private sector".

Other private insurers, including Bupa, send patients to the Heart Hospital, which replaced the National Heart Hospital - the scene of the UK's first heart transplant.

PPP, which is in the middle of a takeover bid by Sun Life & Provincial Holding plc, said it had not included the Heart Hospital in a list of recommended hospitals in central London because "at the current time" it offered "a relatively restricted range of treatments which are catered for in other nearby multi-speciality facilities".

It adds that its decisions are based on ensuring high standards for customers as well as value for money.

The Monoplies and Mergers Commission ruled in 1994 that the private medical industry must work in a competitive environment.

A spokesman for the Office of Fair Trading said the investigation had been going on for the last 18 months or so.

"We have received a number of allegations made in confidence about private hospitals and medical insurance," he said.

Broad spectrum

The Independent Healthcare Association (IHA) said the private health insurance industry had been growing and changing rapidly in the last few years.

"It is becoming much more mature, but inevitably there will be issues it needs to resolve along the way," said David Lucas, executive director of acute hospitals for the IHA.

Historically, insurance firms recognised a broad spectrum of private hospitals for reimbursement purposes.

But in recent years, some have developed networks of hospitals to cover the geographical and specialist range they want.

This means they do not necessarily accept newcomers.

"It is not necessarily an anti-competitive practice and you have to look at individual cases," said Mr Lucas. "But one could imagine ways it could be anti-competitive."

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