people to take out private medical insurance through tax breaks, the argument will run, and that will lift a burden from the NHS. Not on this evidence it won’t. It would be providing tax relief for an inefficient and costly industry and its greatest long-term effect, rather than lifting a burden on the NHS, would probably be to push the overall cost of healthcare higher, at lower value for money. The commission’s report, published in July, is not its final word on the subject. Its proposed remedies— which include barring incentives to consultants to refer to particular hospitals or groups of hospitals, and proposals that most of the bigger hospital groups will have to divest themselves of some of their hospitals to increase local competition—remain subject to consultation. But it seems clear some significant changes are on the way. Unsurprisingly, the commission’s findings have been attacked by the private hospital operators and welcomed by the insurers who have long been worried that premium have risen well ahead of inflation for years now, and have often outstripped NHS inflation. The two biggest insurers, Bupa and AXA, ‘have some clout’ the commission said. But ‘we haven’t found that this completely offsets the power of the hospital operators’. Indeed, they face their own problems with complaints to the Financial Ombudsman Service about the restrictions involved in their policies almost doubling over the last three years. ‘To the extent that they are trying to keep premiums down and promote competition on price and quality, they are doing exactly what their customers would expect’ the commission said. However, they, and Bupa in particular, ‘need to ensure that they communicate better with policyholders about what their premiums entitle them to.’ Partly because the health market simply is different—the difficultly patients have in getting information on price and quality and then understanding it, and the face that it is not really the patient who is the private hospital’s customer but the consultant who brings the patient to it—means that ‘curing these ills and trying to get a better deal for patients is not going to be straightforward’ the commission says. Which is why any proposal for encouraging patients to go private as a cure for the NHS’s financial ills should be handled with extreme caution. After all, if there is one thing that Margaret Thatcher taught us, it is that you should not subsidise inefficient private industries. BJHCM Nick Timmins, senior fellow at the Institute for Government and the King’s Fund, comments on the Competition Commission’s findings on the state of private healthcare The state of private healthcare