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Comment: OFT private healthcare probe

15 December 2010

LONDON, 15 December 2010 - "The OFT is proposing to examine competition in private healthcare, including market concentration, barriers to entry, supply-side constraints (i.e. on consultants) and constraints on consumer choice.  The study has been prompted by initial research and changes in the market over the past ten years, including consolidation among private hospital providers and movements by private medical insurers towards network agreements with private healthcare providers.
 
The OFT carries out market studies of this nature into a number of sectors, with the aim of identifying and addressing any aspects of market failure.  As the OFT did in its market study on equity underwriting earlier in the year, it is seeking views to confirm the scope prior to launching the actual study.  It is possible that the scope of the study will be refined as a result of comments made.
 
The study will focus on the UK but the OFT is also proposing to look at how markets operate in other countries such as the US, Sweden and the Netherlands, where there have been recent developments in relation to patient choice.
 
The OFT is not planning to look at provision of private medical insurance, having no reason to believe that barriers to entry to the private medical insurance market are high.
 
The study comes at a time when healthcare - both public and private - is a top priority for regulators and government.  For example, separately the government is consulting on a range of initiatives relating to the future of the National Health Service.  These include a proposal to establish Monitor (the regulator of NHS foundation trusts) as an economic regulator for the health care sector, with competition law powers. Earlier this month, the OFT announced a study into commissioning and competition in the provision of public services, designed to help government buyers promote competition in markets in order to realise better value for money.
 
Important social and economic interests are in play and interested parties will no doubt be monitoring developments as the healthcare sector comes under closer competition law scrutiny."

For more information please contact:

Simon Barnes

Counsel in Hogan Lovells' Antitrust, Competition and Economic Regulation (London)

Tel: +44 207 296 5899

simon.barnes@hoganlovells.com

Suzanne Rab

Counsel in Hogan Lovells' Antitrust, Competition and Economic Regulation (London)

Tel: +44 207 296 2382

suzanne.rab@hoganlovells.com

 
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