A dispute between a London hospital and Britain's second-largest private insurer is drawing scrutiny to preferred provider arrangements in the United Kingdom.
The Heart Hospital, a for-profit specialty facility, has used the words "blacklisting" and "freezing out" to describe its exclusion by PPP Healthcare, an insurer that co-owns four London hospitals in a joint venture with Columbia/HCA Healthcare Corp.
One of PPP's hospitals, Harley Street Clinic, provides cardiac services and is located just a minute's walk from The Heart Hospital.
The joint venture was formed in 1996 and also includes Princess Grace Hospital, Portland Hospital for Women and Children, and Wellington Hospital.
Nashville-based Columbia says it isn't directly involved in the dispute, since The Heart Hospital's complaint is with PPP's insurance operations, not its hospitals, which operate separately.
"We're interested observers, but it really isn't about us," Columbia spokesman Jeff Prescott says.
But a spokesman for The Heart Hospital, James O'Keefe, notes Columbia's current entanglement in criminal and civil investigations in the United States.
"In light of Columbia's track record, questions are being asked as to whether PPP (is) acting anti-competitively through their workings with PPP-Columbia hospitals," O'Keefe says.
The Heart Hospital filed a complaint in February with the British Office of Fair Trading, which polices anti-competitive conduct. It claims PPP is trying to preserve business for its joint-venture hospitals.
Spokesman Graeme Myles says the office is investigating the allegations. If it decides there is a case, the government could file an action against the insurer in a court that specializes in restrictive practices. If the court finds the company guilty, it could impose a fine.
But even if the agency decides it has a case against the insurer, it may not act until next year. Under legislation passed last year, starting in March 2000, the office can impose fines of up to 10% of a company's operating revenues without taking the firm to court, says Veronica Jackson, a spokeswoman for the Office of Fair Trading. Companies could appeal fines to a special commission.
The office says it has received multiple complaints about preferred provider networks, which are relatively new in the U.K. About 87% of British healthcare is government-funded.
The British typically use private insurance to supplement government coverage, allowing them to avoid long waits for procedures.
Preferred providers and negotiated hospital charges are common in the U.S., where private insurance is the cornerstone of financing. In Britain, preferred provider networks are not as common but are a growing influence.
"We are considering the possible effect on the market of the use of preferred hospital networks and the negotiation of hospital charges by leading (insurance) companies," the office said in a written statement.
PPP has about 30% of Britain's private medical insurance market and covers about 2 million people, according to figures provided by PPP. Richard Needham, chairman of The Heart Hospital, says PPP is doing a disservice to patients by limiting physician and patient choice. He says PPP has refused the hospital's offer to undergo a quality comparison with PPP hospitals.
The Heart Hospital management is "not so worried that they have networks; it's just how they're used," O'Keefe says.
The Heart Hospital, which completed a $72 million refurbishment last October, is owned by Gleneagles Hospital UK, a subsidiary of Singapore-based Parkway Group Healthcare.
PPP attributed the exclusion partly to the narrow range of The Heart Hospital's services, compared with those of nearby facilities. PPP's network includes 23 central London hospitals, 10 of which perform cardiac procedures, according to PPP.
PPP says it picks its network hospitals based on quality and cost, without regard to ownership. The company says it asks hospitals to submit profiles of their clinical services, management and other "organizational quality issues." If necessary, PPP says, it sends a nurse, a physician and a manager to assess the facilities. After that, the hospitals are invited to bid for a contract, according to PPP.
Although Columbia manages and owns a stake in the PPP hospitals, the hospital chain is not directly involved in the British insurance-related turmoil, says Columbia spokesman Prescott.