Private healthcare groups face having to sell off sites after the competition watchdog found 101 private hospitals across the UK have little local competition, according to the East Anglian Daily Times.
The Competition Commission ruled that almost 20 hospitals may have to be sold because stifled competition is pushing up prices and medical insurance premiums for private patients.
Incentives to doctors could also be slashed, and private hospitals could be barred from further tie-ups with NHS hospitals in areas where there is little competition, the commission concluded.
The regulator said some private hospitals are in clusters owned by three major groups, Spire, BMI and HCA, which it said have been earning high profits in recent years.
About 80% of private hospital patients are funded by insurance premiums, typically paid for by employers. Insurers include the likes of Bupa and AXA PPP.
Entry by new players into the private hospitals market is rare, the commission said, due to high costs, the response from existing operators and flat demand.
It found the lack of competition in many local areas means insurers have little choice but to use the incumbent operator - meaning higher premiums for all patients. Patients who fund their own care are also hit with higher charges in areas with little competition.
The regulator found HCA charges significantly higher prices to insurers than other operators, with BMI the next most expensive for insurers.
The commission said the three major players’ dominance caused “consumer detriment” of £173million to £193m a year between 2009 and 2011.
Commission chairman Roger Witcomb said: “The lack of competition in the healthcare market at a local level means that most private patients are paying more than they should either for private medical insurance or for self-funded treatment.
“The lack of available and comparable information, often less than is available to NHS patients, also makes informed choices - which could help drive competition - for these patients difficult.”
The commission also found private hospitals offer access to resources and perks to consultants to encourage them to use their facilities and refer patients. The watchdog said this could create an incentive for excessive tests or consultations.
Hospital groups will be banned from offering incentives to consultants to refer patients to, or treat them at, their hospitals, the commission ruled.
Operators will also be prevented from using their dominance in a local area as leverage in negotiations with insurers.
They will also have to give more information on quality, fees and services.