CMA letter to St John and St Elizabeth Hospital London

Details of the Breach:

Part 3 of the Order prohibits private hospital operators from offering referring clinicians incentives that might encourage patient referrals to their facility. These incentives include higher value services such as office rental space, medical secretarial services, and consultant room hire. The Hospital of St John and St Elizabeth failed to provide these services on non-discriminatory terms or at fair market value, preventing patients from making fully informed choices.

This requirement aims to address concerns identified in the CMA’s Market Investigation, which found that private hospitals could incentivize consultants to refer patients through benefits or discounted services, lacking transparency.

Despite voluntarily informing the CMA of the breach in February 2024, The Hospital of St John and St Elizabeth remains non-compliant. The CMA has requested the hospital to publish an action plan detailing how they will become compliant by 1 January 2025. This action plan is annexed to the letter.

The Breach Explanation:

The hospital offered higher value services but did not do so on non-discriminatory terms or at fair market value. Additionally, it failed to publish the appropriate information on its website. This resulted in an inconsistent and ad-hoc pricing structure for outpatient consultation rooms, office rentals, and medical secretarial fees, which could be seen as incentives for consultants to refer patients to the hospital. The lack of transparency in these arrangements was a clear violation of the Order.

The CMA is particularly concerned as the hospital believes it may have been in breach since the Order came into force in 2015, with certain non-compliance since 2018, potentially affecting a significant number of patients.

Voluntary Actions Taken:

The Hospital of St John and St Elizabeth has undergone a change in senior leadership and management, leading to progress toward compliance:

• Reorganized charges for administrative office rental, formalizing the process with written licenses and making pricing equal and at fair market value.
• Started to address fees for medical secretarial services and consultant room hire, aiming for full compliance by the end of 2024.

The CMA looks forward to further engagement with the hospital to ensure compliance by 1 January 2025.

CMA’s Assessment and Next Steps:

The CMA appreciates the voluntary actions taken by The Hospital of St John and St Elizabeth and does not deem further formal enforcement action necessary at this time. However, the CMA reserves the right to enforce action if non-compliance continues. The public version of this letter has been copied to the Care Quality Commission.