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What the CMA Private Healthcare Order means for your practice

Written by Richard

The Competition and Markets Authority has released their final report of their investigation into the private healthcare sector (2014), with changes due to come into effect in 2016.

The Order specifies remedies to the market distortions that they have identified in the investigation. (Read the full Order here)

The market distortions that have been highlighted are

  • High barriers to entry and expansion for private hospitals, and weak competitive constraints on private hospitals in the provision of privately-funded healthcare by private hospital operators.
  • Private hospital operators rewarding referring clinicians directly or indirectly for treating private patients at, or commissioning tests from, the facilities of the relevant private hospital operator.
  • Lack of publicly available information regarding performance measures and fees of private healthcare facilities of private consultants.

All private healthcare facilities and consultants must provide data to allow the public to easily access relevant data and to make costs clear.

For consultants this includes:

  • outpatient consultation fees as either a fixed fee or an hourly rate
  • the standard procedure fee for the 50 types of procedure most frequently undertaken
  • standard terms and conditions, plus any exclusions or caveats
  • the estimated cost of the outpatient consultation or consultations, which may be expressed as a range, so long as the factors which will determine the actual cost within the range are explained
  • details of financial interests of any kind, which the consultant has in the medical facilities and equipment used at the premises
  • a list of all insurers which recognise the consultant


Neither private hospital or referring clinicians may be a party to any arrangement which may induce a referring clinician to refer private patients to, or treat private patients at, the facilities of a particular private hospital operator, and must terminate any existing arrangements.

Private hospitals must, when providing ‘high-value’ services to referring clinicians (such as secretarial services or consulting rooms or insurance contributions), charge the clinician the market value of the service, offer the service to all consultants at the hospital and disclose details on the hospital website.

‘Low Value’ exemptions from this provision include:

  • general services provided to ensure clinical safety
  • including in-house training
  • operational services such as patient admission, administrative services and billing
  • insurance or indemnity cover in respect of the treatment of NHS patients
  • basic workplace amenities
  • free tea and coffee
  • subsidised meals provided on-site
  • stationery
  • parking spaces if they are available to staff and persons working at the facility generally and not just to a limited number of senior hospital executives
  • general marketing
  • production of consultant directories
  • general promotional events
  • reasonable corporate hospitality, when not inducing or rewarding referrals

A referring clinician is prohibited from having, directly or indirectly a share or financial interest alongside a private hospital operator in a private hospital or a facility owned or operated by a private hospital operator or in any equipment used for treating patients.

This does not apply to GP clinics, or in cases where the following conditions are all satisfied:

  • full payment is made at fair market value by the clinician
  • the clinician owns less that 5% of the financial interests
  • the clinician is not obliged in any way to treat patients at the hospital over other hospitals
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