Ofcom own-initiative investigation into the price of making telephone calls to hospital patients

18 January 2006

Complainant: Ofcom own-initiative investigation
Investigation against: Patientline Limited ("Patientline"), Premier Managed Payphones Ltd ("Premier"), certain NHS Trusts
Case opened: 21 July 2005
Case closed: 18 January 2006
Issues: (i) Whether the agreements that are in place between certain NHS Trusts and both Patientline and Premier each infringe the Chapter I prohibition of the Competition Act 1998 ("the Act") and/or Article 81 of the EC Treaty; and
(ii) Whether the prices that Patientline and Premier each charge consumers for making calls to hospital patients each infringe the Chapter II prohibition of the Act and/or Article 82 of the EC Treaty.
Relevant instrument: Chapter I of the Act and Article 81 of the EC Treaty (anti-competitive agreements) and Chapter II of the Act and Article 82 of the EC Treaty (abuse of a dominant position)

Ofcom continues to have significant concerns about the level of charges for incoming calls to hospital patients.

However, for the reasons set out in the case closure document which is available at the link below, Ofcom has concluded that it would not be appropriate at this stage to continue with this investigation. Ofcom considers that the best outcome for consumers would be achieved by:

  • the submission to the Department of Health of Ofcom’s concerns regarding the basis on which bedside communications and entertainment services are provided in major NHS hospitals; and
  • the Department of Health and providers entering into discussions to examine whether services can viably be provided on a basis that does not involve charging high prices for incoming calls.

Ofcom has met with the Department of Health and Patientline and Premier in the course of the investigation and has highlighted its concerns to them. All parties have expressed their willingness to review the manner in which bedside communications and entertainment services are provided, with a view to reviewing all aspects of the charging structure. For these reasons, Ofcom has decided to close its investigation.

Case Leader: Robert MacDougall (020 7783 4338 e-mail: Robert.MacDougall@ofcom.org.uk)
Case Reference: CW/00844/06/05

 

Text published when the case was opened

Ofcom has opened this investigation to consider whether:

  • the prices that Patientline and Premier charge consumers for making calls to hospital patients are excessive;
  • the use of the recorded message at the start of each call raises the costs of making calls to hospital patients to excessive levels; and
  • the agreements that Patientline and Premier have with NHS Trusts are anti-competitive because of, amongst other things, their exclusivity and length.

Background

Patientline and Premier have each entered into exclusive agreements with certain NHS Trusts to provide bedside communications and entertainment services to hospital patients at individual hospital sites.

As part of the service that Patientline and Premier provide, hospital patients at these sites are able to receive telephone calls from their bedside. When a consumer makes a call to a hospital patient, the cost of the call is shown on the phone bill supplied by the consumer's chosen communications provider.

Ofcom has received a number of complaints from consumers about the prices charged for making calls to hospital patients (in most cases, 49p per minute peak and 39p per minute off-peak). Consumers have also complained about the duration of the recorded message that callers are required to listen to at the start of each call, which also attracts these charges.

Ofcom has held initial exploratory discussions on these matters with the NHS Estates, Patientline and Premier.

The investigation

In the light of these concerns, Ofcom is investigating the above mentioned issues under the Act and the EC Treaty.

The Chapter I prohibition of the Act and Article 81 of the EC Treaty both prohibit, in certain circumstances, agreements which prevent, restrict, or distort competition. The Chapter II prohibition of the Act and Article 82 of the EC Treaty both prohibit, in certain circumstances, conduct by one or more undertakings which amounts to an abuse of a dominant position.

As set out in section 25 of the Act, Ofcom may conduct an investigation if it has reasonable grounds for suspecting that the Chapter I or Chapter II prohibitions have been infringed. In addition to these prohibitions, Ofcom also has the power to apply Articles 81 and 82 of the EC Treaty in full.

Ofcom's investigation will consider:

  • whether or not Patientline and certain NHS Trusts and/or Premier and certain NHS Trusts have each infringed Chapter I of the Act and/or Article 81 of the EC Treaty; and
  • whether or not Patientline and/or Premier have each infringed Chapter II of the Act and/or Article 82 of the EC Treaty.

Case Leader: Robert MacDougall ( e-mail: Robert.MacDougall@ofcom.org.uk)
Case Reference: CW/00844/06/05