BUPA in major dispute with HCA - what strategy are they pursuing?
BUPA has taken its long-running dispute with the hospital group, HCA, to a new level. HCA owns most of the private hospitals in central London, including the Wellington, the Portland and the Harley Street Clinic.
For well over a year, the two sides have been deadlocked, but BUPA has now highlighted the dispute in letters sent to corporate clients and to BUPA patients booked in for treatment in one of HCA's six hospitals. The letter warns members that they could find themselves exposed to elements of this dispute if they go to an HCA hospital. It then quotes a helpline number for worried patients to call.
We understand that people calling the helpline will be told that, at the present time, all HCA charges that are normally eligible will be honoured. Similarly, we understand from HCA that it has no immediate plans to charge patients for any shortfalls on reimbursements from BUPA.
BUPA's actions seem designed to demonstrate that it is prepared to exclude HCA from its lists of recognised providers if the group does not compromise on some of the issues under dispute.
What are these issues? Price is clearly a factor, and there is no doubt that HCA is one of the most expensive hospital chains in the country. But the problems run much deeper than this. People are reluctant to buy BUPA's increasingly expensive insurance products when NHS waiting lists are lower than they have been for a generation. BUPA reasons that these consumers still have concerns over the quality of NHS facilities and would use the private sector as much, if not more, than they ever have, if the price was right.
The solution, as BUPA sees it, is to develop new products that include a limited range of high-quality hospitals and other providers. To be part of the partnership, BUPA is insisting on low prices and the right to regular quality checks. As we understand it, HCA will not accept BUPA's criteria for measuring the quality of its hospitals. Similarly, we believe that HCA has asked for certain guarantees of participation in future product initiatives that BUPA will not agree to.
The catalyst for this increase in temperature has been BUPA's launch of a new network of MRI scanning units. We understand that this will reduce the number of units that BUPA recognises from over 400 to around 230. It appears that BUPA is not prepared to admit HCA units onto its network until the underlying issues have been resolved.
While BUPA's determination to drive down costs and adapt to changing circumstances is entirely laudable, the approach they are taking is somewhat risky. Many people buying their own insurance will welcome new, low-cost products and will accept the restrictions on where they can go. But the market is more diversified than this and many, particularly corporate, customers will expect their employees to be able to use facilities such as the Wellington and others with established reputations.
While the most likely outcome to the HCA dispute is that a solution will be found without undue inconvenience to BUPA members, the restricted MRI network will be launched and may be followed by others. It may be that BUPA's proposition to customers will be very different in the future from what it is now and we will monitor developments closely.
Meanwhile, BUPA's new MRI list is due to come into effect from 20 April and will apply to all products immediately. BUPA tells us that it is planning more communication of the changes and has been keen to reassure us that 90% of members going for scans following the implementation of the network will be unaffected by the changes. It will also inform members who call to authorise treatment in the future of just what facilities will be available to them in their area. BUPA says that MRI accounts for less than 1% of the benefit that it pays out and that members should not experience any inconvenience in obtaining the scans that they need.
We will be issuing separate communications on the new MRI network when final details are published.
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