A private hospital has been publicly named for breaking rules around providing incentives to consultants for at least six years and told to rectify the situation by the end of the year.
The competition regulator wrote to The Hospital of St John and St Elizabeth detailing concerns the hospital had not been treating consultants equally or fairly when offering services and treatment spaces, as required by the Private Healthcare Market Investigation Order 2014.
The Competition and Markets Authority (CMA) said the extended period of the breach was of “serious concern” to the regulator as it “may have affected a significant number of patients”.
The Hospital of St John and St Elizabeth voluntarily informed the CMA of the breach on 7 February 2024 and believes it may have been in breach of the order since it came into force in 2015. It has since taken action to address the non-compliant areas.
“Record keeping does not extend this far back but there is a strong likelihood that The Hospital of St John and St Elizabeth has never complied with all the provisions of the order,” the CMA said.
“It is certain that it has been in breach since 2018.”
‘Seen as incentives to refer patients’
The order requires a private hospital operator to not offer or provide referring clinicians with incentives that may encourage them to refer or treat a patient at that site.
Detailing the breach, CMA director – remedies, business and financial analysis Alistair Thompson noted the hospital did not offer these higher value services on non-discriminatory terms or at fair market value to each referring consultant and did not publish the appropriate information on its website.
He added the hospital had an “inconsistent and ad-hoc pricing structure for outpatient consultation rooms, administrative office rental and medical secretarial fees that varied between consultants, meaning they can be reasonably seen as incentives to refer patients to the hospital”.
These were not published on the hospital website so the relationship between the hospital and the referring consultants was not transparent, he added.
Thompson said the CMA was pleased to see some of the breaches had been remedied already but highlighted that the one regarding fees for medical secretaries was ongoing.
‘Patients could not make fully informed choices’
“The hospital failed to offer higher value services, including office rental space, medical secretarial services and consultant room hire, on non-discriminatory terms or at fair market value,” the CMA said.
“This was a clear breach that meant patients could not make fully informed choices.”
However, the CMA highlighted the hospital had recently undergone a change of senior leadership and management, and the new team has made progress to become compliant with the order.
These voluntary steps include:
- In January 2023, it restructured the costing arrangements for outpatient consultation rooms to make them fair and transparent.
- It has reorganised how it charges for administrative office rental, formalising the process with written licenses to occupy and making the pricing equal and at fair market value.
- It is currently engaging with the small number of consultants who use medical secretaries to determine the best course of action to become compliant with the order. This process is subject to the action plan and will be concluded by the end of 2024.
“Due to the nature of the voluntary actions that have been taken by The Hospital of St John and St Elizabeth, the CMA does not consider it necessary to take further formal enforcement action at this time,” Thompson continued.
“We reserve the right to take formal enforcement action if there is further non-compliance.”
A spokesperson from The Hospital of St John and St Elizabeth told Health & Protection: “We are pleased that the CMA has recognised the steps taken by the current senior management of the hospital to comply with The Private Healthcare Market Investigation Order 2014.
“The CMA has made it clear that there is no case for further action so long as the hospital takes the necessary steps to ensure compliance by the end of the year.”