As the market evolves, Oliver Maughan, chief executive of Maulin Group, considers whether it is time to revisit how private healthcare indemnity is regulated.
The CMA’s Private Healthcare Market Investigation Order 2014 was introduced with a clear and important objective: to ensure patients are not directed by financial incentives, but by clinical need, outcomes, and value. That principle remains entirely sound.
The prohibition on inducements between private hospitals and clinicians has played a vital role in protecting competition and patient choice. Few would argue otherwise.
However, the private healthcare market of 2026 is materially different from that of 2014, and it is legitimate to ask whether parts of the framework now warrant careful re-examination, not to weaken competition protections, but to strengthen patient protection in a changed risk landscape.
A market that has fundamentally evolved
In 2014, patient choice in private healthcare was comparatively opaque. Information asymmetry was high, and referral patterns were heavily clinician-led.
Since then, several structural shifts have occurred.
The Supreme Court’s decision in Montgomery v Lanarkshire Health Board established that informed consent must be judged from the patient’s perspective, embedding patient autonomy and choice into law. Transparency has accelerated. Platforms such as Doctify, which emerged in this period, have made clinician and hospital performance far more visible. Patients are now materially better equipped to research who treats them, where, and how.
At the same time, private hospitals have strengthened clinical governance. Practising privileges have become more granular, scope-based, and actively policed. Hospitals today exert far more oversight over what activity takes place within their facilities than was typical a decade ago.
Patient choice has not diminished; it has become more informed, more empowered, and more multidimensional.
The emerging fault line: Indemnity
Against this backdrop, professional indemnity has become an increasingly significant consideration.
In the UK, two distinct forms of professional indemnity operate in parallel: discretionary indemnity and contractual insurance. This dual structure is not universal. Some jurisdictions, including Australia, now require medical indemnity to be provided solely through regulated contractual insurance, whereas the UK has retained both models.
Discretionary indemnity remains the predominant form relied upon by clinicians. It is a long-established approach that has historically functioned well and continues to be widely used. Contractual insurance, by contrast, operates through defined policy terms that set out explicitly what is and is not covered, providing clarity and contractual certainty in advance.
Discretionary indemnity is structured differently. As it is not regulated insurance, it does not operate through predefined contractual terms. Instead, the provision of assistance is determined by the membership organisation on a case-by-case basis, exercising discretion in light of the circumstances of each matter. By its nature, this means that cover is not defined exhaustively in advance in the same way as a contractual policy, and certainty over scope and response is allocated differently.
This distinction is not about one model being right or wrong. The discretionary approach has endured in the UK for many years and, unlike in Australia, has not experienced the same systemic disruption that led to the withdrawal of discretionary indemnity as a permitted model there. Nonetheless, the existence of two structurally different approaches raises important questions about how clarity of cover is understood and managed.
For contractual insurance, clarity depends on understanding the policy terms being purchased and the limits and exclusions that apply. For discretionary indemnity, clarity depends on understanding that cover is not contractually defined in advance, but is subject to acceptance by the organisation on discretionary grounds. In both cases, informed understanding of how protection operates is critical.
This matters not only for clinicians, but also for hospitals and patients. Private hospitals carry reputational, operational, and often vicarious exposure for care delivered within their facilities. Where indemnity arrangements are not clearly aligned with that shared exposure, uncertainty over how claims may be handled can have downstream implications. In extreme cases, misunderstandings about the nature or scope of cover can affect how claims are resolved, with potential knock-on consequences for compensation pathways and vicarious liability.
In most routine clinical scenarios, these distinctions may have little practical impact. They become more relevant in complex, high-severity, or systemic situations, where clarity over responsibility, limits, and response across multiple parties becomes essential.
Where the current framework strains
The CMA Order treats contributions to professional indemnity as a “higher-value service” and quite rightly restricts arrangements that could function as inducements. In practice, this has meant that hospital involvement in indemnity is heavily constrained.
The unintended consequence is that hospitals are effectively discouraged from engaging with indemnity as part of their safety and governance infrastructure, even where doing so could enhance patient protection.
This is not about hospitals seeking to offer perks or to influence referrals. It is about whether, in a modern private healthcare system, indemnity should be viewed purely as a commercial attribute of individual practice, or as part of the patient-protection architecture that underpins safe care delivery.
This constraint is not merely theoretical. The Competition and Markets Authority has previously taken enforcement action where hospital involvement in indemnity arrangements was considered to go beyond what the Order permits, including in relation to arrangements at the Royal National Orthopaedic Hospital in a CMA letter on 9 November 2018. These cases underline that the boundaries set by the Order are actively enforced, and that hospitals must operate cautiously when seeking to engage with indemnity, even where the intention is improved governance or risk alignment.
A case for a tightly defined safe harbour
If this issue is revisited, any change must preserve the CMA’s core objectives. The solution is not deregulation, but precision.
A credible safe harbour would need to be narrow, conservative, and explicitly designed to neutralise competition concerns. At a minimum, it would require economic neutrality. Hospitals could arrange indemnity, but clinicians would pay the full, independently benchmarked market premium. There would be no subsidy, discount, or hidden cross-support. There would be strict scope limitation. Any such indemnity would apply only to activity undertaken within that hospital and within granted practising privileges. External practice would remain separately insured. A mandatory opt-out and equivalence would be essential. Clinicians would retain the right to rely on equivalent external cover, provided it meets defined contractual and limit standards. Indemnity could not become a tool for soft exclusivity. There should be uniform availability and transparency. The arrangement would need to be offered on identical terms to all eligible clinicians, with pricing, minimum limits, and opt-out processes clearly published and visible to patients. Finally, there would have to be independent underwriting. Insurers, not hospitals, would make underwriting decisions, ensuring indemnity is not used as an indirect gatekeeping mechanism beyond legitimate governance controls.
Such a framework would not advantage large providers over smaller ones, would not reduce clinician mobility, and would not distort referral incentives. What it would do is allow indemnity to align more closely with clinical governance and patient protection.
Why this matters for patients
From a patient perspective, the benefits are tangible.
Clear minimum indemnity standards reduce the risk of under-insurance. More importantly, clarity over how indemnity operates, whether through contractual terms or discretionary decision-making, helps ensure that all parties involved understand how protection is intended to respond. Alignment between practising privileges and insured activity provides an additional layer of assurance that care is being delivered within agreed scope and supported by appropriate indemnity arrangements.
In the event of a claim, clearer alignment between hospital and clinician cover can also support more coherent and timely resolution, benefiting patients as much as providers.
A question worth asking
The CMA Order was designed to protect patient choice. That aim remains paramount. But patient interests are not static. As the market evolves, so too must our understanding of where consumer harm truly lies.
In 2014, the primary risk was distorted choice. In 2026, a growing risk is indemnity opacity and fragility in a system that expects ever-higher standards of governance and accountability.
Revisiting how indemnity is treated within the competition framework is not about weakening safeguards. It is about ensuring that the regulatory architecture continues to serve patients in the market as it exists today, not as it once was.
That conversation is worth having.
