NHS Vows to Comply with Competition Law After Pricing Data Controversy

Jack Humphrey, Regulatory journalist
August 20, 2012 /

Eight NHS Hospital Trusts have have assured the Office of Fair Trading (OFT) that they will no longer exchange commercially sensitive information about their Private Patient Unit (PPU) prices, in compliance 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 about possible competition concerns over 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.”

 

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