Bupa, the UK's biggest private medical insurer, may have to split its insurance and hospital divisions into two separate businesses as a condition of its proposed £260m acquisition of the Community Hospital Group (CHG).
The Competition Commission has yet to rule on the merger itself, but issued a number of precursory recommendations in case of adverse findings.
The most severe was the complete separation of BUPA's two arms, but other proposals included strengthening the arms' length relationship between the insurance and medical services divisions and the enforced sale of a number of hospitals.
Bupa, which collected more than £900m of premiums last year, has yet to confirm whether or not it
would proceed with the acquisition.
The dominance of the two biggest PMI providers, Bupa and the Axa-owned PPP, which have about 70% of the market between them, led to an Office of Fair Trading investigation into the duopoly last year.
Bupa announced in April that it wanted to buy the CHG network of 21 hospitals to add to the 36 hospitals it already owned.
An inquiry into the deal was ordered in June by the trade secretary, Stephen Byers. At the time he said: “The proposed acquisition of CHG by Bupa raises competition concerns in respect of both the private medical insurance and private medical services markets in the UK.”
Opponents of the deal fear that Bupa may charge higher rates to non-members or block access to patients from other healthcare insurers.
The Consumers Association said: “Our main concern is that Bupa could use its stronghold as an insurer and healthcare provider to reduce choice and competition by directing their own patients to Bupa hospitals only and by using high charges to restrict access to patients insured by other companies.
A Bupa spokeswoman dismissed these claims. She said the acquisition of CHG would give Bupa a better geographical spread of facilities and give it access to some facilities is does not have at the moment.
She said of CHG: “They have a perfect strategic fit. The ethos and way they run their hospitals is similar to our own.”
She also denied that the company was going to reduce private hospital capacity in order to introduce higher charges. “There are no such plans,” she said.
Bupa is expecting a decision from the trade secretary by the end of the year.
