Nashville-based HCA has been ordered by the United Kingdom’s Competition Commission to sell some of its London hospitals because a perceived lack of competition is increasing health care prices.
Regulators have proposed that HCA sell two of its six London hospitals — London Bridge and Princess Grace — based on the commission’s August report that found the facilities faced little competition. (Separately, South African company BMI Healthcare has been told it needs to sell seven facilities.)
“This led to higher prices for insured patients by those private hospital operators with market power in negotiations with private medical insurers, namely HCA, BMI and Spire,” read the commission’s press release.
Regulators also cited incentive schemes, reporting that clinicians were encouraged to refer patients for treatment or tests to particular providers, and a lack of performance information as further competition problems.
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“Requiring operators to sell hospitals is a big step and we have focused on those areas where a sale will be effective in increasing competition — where a single operator owns a cluster of hospitals which face little rivalry,” said Roger Witcomb, chairman of the Competition Commission and the Private Healthcare Inquiry Group.
HCA strongly contests the planned sales, according to a separate press release. The company in 2012 pulled in $1.1 billion in revenues from its international division, up from $784 million two years earlier.
“The Competition Commission’s provisional recommendations are plainly wrong,” said Mike Neeb, CEO and president of HCA International. “The CC’s own report acknowledges there are nearly 50 competitors in Greater London, our ownership of these hospitals encourages competition and drives a higher standard of care among hospitals in the UK.”
In a recent Financial Times report, the regulators’ stance drew ire from HCA official Keith Biddleston, who pointed to Prime Minister David Cameron’s recent attempts to increase the health care trade between Britain and China.
“Maybe when David Cameron next goes to China to encourage investment in our economy,” Biddleston said, “he should tell them that if they legally buy a business like we did 13 years ago, have the purchase cleared by the Office of Fair Trading, transform it into one of the best hospitals in the world through sweat, skill and money, he has a Competition Commission that can force you to sell it because it is too successful.”
Date: January 28, 2014