Consultants apply for CMA concessions to kick-start private practice

By Robin Stride

Private consultants today called on the competition watchdog to intervene to enable them to get back to work treating the huge backlog of patients waiting for help.

Dr Mark Vanderpump, LCA chairman

In a strongly-worded missive, they appealed to the Competition and Markets Authority (CMA) to allow private hospitals to waive charges for secretarial/administration services and room rentals – which can amount to over £80,000 a year for full-time independent practitioners.

The CMA made these charges mandatory four years ago after a long-running investigation into private healthcare, which identified ‘market distortions’.

But the London Consultants Association (LCA) argues that the private market would be kick-started back into life if these fees could be waived or significantly reduced by private hospitals and clinic operators.

The LCA believes most would do so because ‘they should see this as a way to ensure their own long-term survival’. 

Independent hospital administrators are said to have informed the LCA they are reluctant to allow any concessions for fear of falling foul of the regulator.

The LCA says key to restoring the market is to get the private medical consultant back to work. This will open the front end of the service and starting the process of patient investigation and referral to get the paralysed market moving once more. 

It tells the CMA: ‘Consultants cannot keep staff on furlough forever and they cannot rely on savings, which will eventually become depleted. Again, the fear is that many consultants will not return to private practice.’ 

Read the LCA’s full statement:

‘The LCA remains very concerned regarding the future of private medical practice from the available patient activity data reported by Healthcode in mid-July 2020. 

There is a very mixed picture with losses of practice varying between regions and by specialty. Activity was reported as 29% in May, 47% in June and 49% in July. However, this only includes outpatient activity with insured patients and not those self-paying or international patients. 

The future remains uncertain with the real prospect of regional lockdowns and the lack of an effective vaccination programme before this winter.

Private practice is estimated to contribute 10% of total healthcare in the UK. It remains unclear how the NHS plans to clear the increasing backlog of cases that has resulted from the pandemic and the role of the private healthcare sector.

Although independent hospitals have now agreed to start taking private patient admissions, there are still significant restrictions and consultants are reluctant to restart their practice due to the over-burdening cost and the risk involved.

A number of consultants are reported to have taken early retirement while others have furloughed support staff relying on savings or spousal income. The situation remains grave. 

For a consultant to restart a practice, they must commence re-employing their secretaries and installing administration once again. Many consultants have utilised virtual consultations but are reluctant to restart ‘face-to-face’ consultations in view of the limited number of patients wishing to be seen in clinics. 

The cost of hiring a consulting room – chargeable by the private hospitals – in addition to their other overheads, makes the return to normalcy unviable. 

Independent hospital administrators have informed the LCA that they are reluctant to make any concessions for fear that they will fall foul of the regulator. Moreover, private medical insurers, for example Vitality, are reducing reimbursements for virtual consultations, further reducing the incentive to return to practice.

Currently, independent hospitals are not seeing any real return of private patient admissions into their hospitals and clinic room usage is reported to be very limited. There is a paralysis in the market and these prohibitive restart costs are another barrier preventing a return to a normal private healthcare market. 

The LCA are of the very strong opinion that a kick-start process needs to be developed to allow the market to recover, which would bring back private patients safely and in so doing, would assist private hospitals to return to revenues and build profitably once again.  

The key to restoring the market is to get the private medical consultant back to work; opening up the front end of the service, seeing new patients face to face once more and starting the process of patient investigation and referral to get the process and the market moving once more. 

Consultants cannot keep staff on furlough forever and they cannot rely on savings, which will eventually become depleted Again, the fear is that many consultants will not return to private practice. 

The LCA have proposed a way to get the private patient market re-established. There are two costs which would normally have to be borne by the consultant in their private practice:

  1. Secretarial / administration services. Typical monthly costs to run a medium size practice equating to 1.5 whole-time equivalent staffing would be of the order £60k per annum, including employer’s costs. 
  2. The costs of consulting room rental. Consulting room rental for a medium private practice utilising two 8-hour consulting sessions per week and based on a fair market price of £25 per hour rent would equate to a cost of £1600 per month or around £20k per annum. 

The LCA firmly believes that if these charges could be waived or significantly reduced by the private hospital or clinic operator, then this would give the impetus and support to get the consultant back to work with some confidence, and the market would be restarted. 

This process of support may take up to one year. The role of the CMA is to ensure an even and fair market balance. 

The LCA has requested a CMA review to consider a uniform easing of regulation so the private hospital operator can decide whether or not to waive or significantly reduce these charges over a period of one year. The LCA believes that the majority would, as they should see this as a way to ensure their own long-term survival.’ 

Mark Vanderpump, LCA chairman

Keith Hague, adviser