Bupa yesterday warned a lack of competition among private hospitals was pushing up the cost of treatment and threatening to make its health insurance unaffordable.

As the cost of paying for its customers' private treatment continues to rise, it said the health insurance industry faced a looming "affordability crunch" .

It is negotiating to try to keep hospital prices down, but rising costs and the weak economic environment contributed to a 5% fall in customer numbers at its UK insurance division to 2.7 million in the six months to June 30.

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