British government bans BMA's private fees guide

BMJ 1994; 308 doi: (Published 19 February 1994) Cite this as: BMJ 1994;308:492
  1. L Beecham

    The British government has banned the British Medical Association (BMA) from publishing its guidelines to consultants on fees for private practice. In a report from the Monopolies and Mergers Commission (MMC) to the secretary of state for trade and industry the commission said that the list of fees creates a “complex monopoly.” The Fair Trading Act defines this as a situation that exists “if a group of two or more persons... restrict or distort competition in connection with the supply of goods or services.” The list helped doctors to charge higher fees than would otherwise be possible. The MMC said that the list was against the public interest and criticised the lack of price competition among consultants and of any pressure on charges exerted by patients or general practitioners. There is no reason, the commission says, why there should not be competition in private health care.

    The BMA said that it would stop publishing the guidelines. The corporate affairs minister, Mr Neil Hamilton, said that if it had not done so he would have made an order under the Fair Trading Act to prohibit the list's publication.

    The guidelines were first published in 1989 after a request from the association's annual representative meeting for a fee schedule for private work. This was because many consultants believed that the British United Provident Association (BUPA), Britain's largest private health group,was holding down fees by not increasing its maximum benefits. The rates in the BMA's guide (which exclude anaesthetists' charges) range from £30 ($45) for applying a plaster cast to £320 ($480) for a hernia repair and £5800 ($8700) for a liver transplant operation.

    But the guide came to be regarded as a tariff, and in 1992 the director general of fair trading asked the MMC to decide whether the fees contravened the Fair Trading Act (BMJ 1992;605:667).

    In its 300 page report the commission recommends that patients should be told beforehand and in more detail what consultants' charges are likely to be. General practitioners should also be given more information about charges to allow patients to shop around for the best value operation. The MMC suggests a code of practice on the subject.

    The BMA disputes that it is part of a monopoly and calls the decision “perverse.” In a press statement the association said that the guidelines “have been seen by both the medical profession and patients as a helpful source of information.” And the Independent Health Care Association, which represents private hospitals, said that the decision could mean that “patients have to negotiate over their own bodies at a time of immense stress.”

    The MMC found that about 3600 NHS consultants fixed their charges by referring to the BMA's guidelines and about 6600 used the maximum medical insurance benefits that BUPA would pay to its policy holders if they claimed for the cost of treatment. The commission did not think, however, that BUPA's table constituted a monopoly - it was a legitimate part of its function to tell the public the payments they would receive. The MMC said that BUPA's insurance payouts, which had declined in real terms since 1991, had had a restraining effect on consultants' charges.

    BUPA's director of benefits management, Mr Peter Garrad-Cole, found the report “fair and reasonable” and said that his organisation was negotiating with hospitals and consultants about reducing health care costs. Mr Tim Baker, commercial director of Norwich Union Healthcare, also welcomed the report. “Private health insurance premiums could fall by over 20 percent,” he said.

    In 1992 about 17 000 NHS consultants out of a total of 23 000 earned £550m ($825m) from private practice, mainly in London, south east England, and the midlands. The commission estimated that consultants engaged in private practice earned an average of £17 000 ($25 500) a year on top of their NHS salaries, which range from £38 475 ($57 700) to £49 680 ($74 520). About 250 consultants had gross earnings of over £200 000 a year, with about 50 earnings over £400 000. But after expenses the number earning over £200 000 fell to about 90. The Monopolies and Mergers Commission's report Private Medical Services. A report on agreements and practices relating to charges for the supply of private medical services by NHS consultants (Cmnd 2452) is available from HMSO, price £23.

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