By Claire West

The Office of Fair Trading (OFT) today announced plans to launch a market study into private healthcare.

The study will examine the nature of competition in the market, and whether the market is fully competitive.

Ahead of the formal launch in Spring 2011, the OFT is seeking views on the proposed scope of the study.

Preliminary research undertaken by the OFT and information received from participants across the sector have raised questions about whether the market is working well for private healthcare patients.

The private healthcare market, which is currently worth more than £5.5 billion, is of growing importance due to an ageing population, improved medical outcomes and higher life expectancy. It is also important to the NHS as a result of ongoing Government initiatives which allow NHS patients to seek treatment from private healthcare providers in certain circumstances. The NHS currently accounts for almost one quarter of revenues paid to private healthcare providers.

The OFT proposes to explore four possible areas of concern:

The level of concentration amongst providers of private healthcare at the national, regional and local levels, and whether this limits the extent of competition in the market.
The existence of any barriers preventing private healthcare providers from entering or expanding in the market.
The existence of any restrictions on the ability of consultants and other medical professionals to practice.
How consumers access and assess information, and how they exercise choice in the provision of private healthcare.
The OFT is currently seeking the views of all interested parties in order to refine and confirm the scope of the study. It is possible that, following this period of consultation, these initial areas of interest may change.

The OFT does not presently intend to focus directly on the market for private medical insurance, although aspects of this market's operation will be considered in so far as they affect the provision of private healthcare.

Sonya Branch, OFT Senior Director of Services and Public Markets said:

'We are keen to establish whether patients and buyers of private healthcare services, including the NHS, are getting the full benefit of choice and competition.

As this is a complex area, we want to engage with providers, patients and government first to ensure that we identify and focus on the correct issues prior to launching the market study in 2011.'