71/12   16 August 2012

Eight NHS Hospital Trusts have given voluntary assurances to the OFT that they will no longer exchange commercially sensitive information about their Private Patient Unit (PPU) prices, to ensure they comply with competition law.

The OFT approached members of the Southern Region Private Healthcare Association (SPHA) earlier this year following information it received from a whistleblower, which highlighted possible competition concerns about the pricing data being exchanged between them.

All public bodies, including NHS Hospital Trusts, are subject to the Competition Act 1998 when engaged in the commercial supply of goods or services, such as paid treatments for private patients.

The exchange of commercially sensitive pricing information can result in higher prices for customers, as it can diminish incentives on organisations to compete on price and has the potential to facilitate collusion. Where this behaviour is caught by the Competition Act 1998, it can constitute a breach of the law, and consequently may result in financial penalties of up to 10 per cent of worldwide turnover.

To address the OFT's concerns, eight Hospital Trusts, which are members of the SPHA, have provided assurances that they will not exchange confidential pricing information and will provide further training to their staff on the importance of complying with competition law where applicable.

The OFT will also be writing to all NHS Trusts and Foundation Trusts which operate PPUs, enclosing guidance on competition law compliance.

Deborah Jones, Director in the OFT's Services, Infrastructure and Public Markets Group, said:

'We welcome the assurances given by these Trusts which have enabled us to bring our preliminary investigation to a close.

'However, this does not preclude the OFT from investigating any aspect of Hospital Trusts' economic activities if it receives further evidence of potential infringements of the law. We urge all Trusts to take steps to ensure they are compliant with competition law when engaging in commercial activity.

'Where public sector providers compete with the private and voluntary sectors, the OFT is committed to ensuring that there is a level playing field for all so that effective competition encourages suppliers to offer lower prices, better quality and an improved range of goods or services.' 

NOTES

1. The Trusts who are members of the SPHA include: Brighton and Sussex University Hospitals NHS Trust, Frimley Park Hospital NHS Foundation Trust, East Sussex Healthcare NHS Trust, Portsmouth Hospitals NHS Trust, Dartford & Gravesham NHS Trust, University Hospital Southampton NHS Foundation Trust. Epsom and St Helier University Hospitals NHS Trust and East and North Hertfordshire NHS Trust have since withdrawn from the SPHA.
2. Private Patient Units (PPUs) allow for private treatment in a hospital within the NHS. Such private patient units typically offer a full range of general and specialist medical services on site.
3. Private treatment in these units is covered by most health insurance schemes and patients may also be able to take advantage of low cost fixed price surgery 'packages' from some of the NHS PPUs.
4. See OFT guidance on Public Bodies and Competition Law (OFT1389) and the OFT quick guide to competition compliance (OFT1330).
5. The OFT has made no finding of an infringement of competition law by members of the SPHA. It has closed its preliminary investigation in response to the SPHA members' voluntary assurances without opening a formal investigation.
6. See more information on the OFT's work in the healthcare sector.
7. The Competition Act 1998 prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK. The Chapter I prohibition of the Act covers, among other matters, anti-competitive agreements and concerted practices that have the object or effect of preventing, restricting or distorting competition in the UK (or a part of the UK).