Competition Commission Inquiry in to the BUPA Insurance purchase of the Community Hospitals Group

The LCA gave written and verbal evidence to the Competition Commission inquiry into the BUPA Insurance purchase of the Community Hospital Group (CHG). The Chairman of the LCA was also spoke on behalf of the BMA in the absence of Mr. Derek Machin, the Chairman of the BMA Private Practice Committee. The view of the BMA, the LCA, the HCSA and most other medical groups was that the purchase of CHG by BUPA Insurance would put the insurance company into a very dominant position in the market. This purchase would have given BUPA Insurance about 40% of the networked hospitals and over 25% of all private beds. As BUPA Insurance is the largest insurer with 40% of the market, this would have created a complex monopoly. Part of our evidence was also centred on the BUPA Insurance Consultant Partnership because if, as BUPA Insurance are hoping, substantial numbers of consultants join this, it would add to the total control and domination by this group.

The Competition Commission reported to the Secretary of State in October and its 237-page report was issued in December 2000. This contains considerable detail about the opposing arguments. In the end, the purchase was forbidden unless BUPA Insurance agreed to split its hospital division completely from its insurance division. BUPA Insurance has refused to do this and so the purchase of CHG cannot proceed.

Copies of this report may be purchased for £20.40, www.Competition-Commission.org.uk

The main remit of the Competition Commission was to look into the purchase of the CHG group. Our evidence, together with much support from many others, caused the Commission to look at the whole structure of the private medical market. The report contains many interesting statements about the preferred provider hospital system and the nature of the private market.

Members of the LCA who wish to receive selected quotes should contact our office