Competition watchdog to force HCA to sell London hospitals

LONDON, April 2 Wed Apr 2, 2014 4:45am EDT

LONDON, April 2 (Reuters) - Healthcare group HCA International must sell one or more of its hospitals in London, Britain's competition regulator said on Wednesday, after finding it had too strong a grip on the market for both self-pay and insured patients.

The Competition and Markets Authority (CMA) said it was clear HCA's market power in central London allowed it to charge higher prices to insurers. The company, part of U.S.-based HCA Holdings Inc, owned more than half of the available overnight bed capacity, it said.

The company said it intended to vigorously challenge the ruling in the courts.

In a related move, the CMA stopped short of making rival healthcare provider BMI, Britain's largest operator, sell any of its centres, despite previously saying many private hospitals faced too little competition in local areas across Britain.

The CMA had said in January that BMI, owned by South Africa's Netcare and private equity group Apax Partners , could be required to sell seven hospitals. But it had now decided it could not find clear enough evidence that a concentration of providers in areas outside central London led to higher prices for insured patients.

For HCA, the CMA's decision means it would be required to sell the London Bridge and Princess Grace hospitals, or alternatively the Wellington hospital.

"The sale of HCA hospitals will significantly increase competition in central London, in particular by allowing the insurers to offer corporates and individual policy holders a comprehensive alternative to HCA," said Roger Witcomb, chairman of the CMA's Private Healthcare Inquiry Group.

But HCA criticised the finding.

"HCA International made significant investments to transform these facilities into some of London's leading hospitals," said Mike Neeb, president and CEO of HCA International.

"In failing to consider our investment, the mix of patients we treat and the complex procedures we carry (out), the CMA has drawn inaccurate conclusions about HCA International's pricing - something which we strongly refute and will of course be challenging," Neeb said.

BMI Healthcare Chief Executive Stephen Collier said the commission had reached a "sensible, measured and fair conclusion".

The CMA's measures also include a crackdown on benefits and incentive schemes provided to referring clinicians by private hospital operators, and providing more information to patients on fees and the performance of hospitals.

"A more transparent market with patients actively making choices will drive hospital operators to compete on the things that matter to patients," Witcomb said. (Editing by David Holmes)

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