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ACM studies: the insured’s diversity of wishes affects the negotiation balance between health insurers and hospitals

Approximately one in three insured believe that health insurers should negotiate fiercely in order to keep premiums low. Almost the same percentage of insured believe that health insurers should predominantly offer unlimited choice in health care options. Insured say they will leave their current health insurer if it charges higher premiums or if certain hospitals become out-of-network hospitals. Health insurers must constantly find the right balance between the various wishes of insured. That affects their position in negotiations with hospitals. These conclusions can be drawn from three studies that the Netherlands Authority for Consumers and Markets (ACM) has published.

Insured turn out to react strongly to a hospital’s network status. 38% of all insured say they will switch health insurers if their preferred hospital is out of their current insurer’s provider network. 31% of all insured say they will adjust their insurance policies so that they will be able to continue to visit their preferred hospital. Also, it turns out that some of the insured find it very important that they can go to all hospitals in their insurer’s network: 11% of all insured say they will switch insurers if a hospital outside their region is not in their current insurer’s network. These kinds of reactions among insured may have effects on negotiations between health insurers and hospitals.

In negotiations with individual hospitals, the capacity of nearby hospitals also plays a role. After all, the ability of those hospitals to expand their capacity will affect a health insurer’s options for relocating specific health care services to a different hospital, if the insurer and the hospital in question do not reach an agreement. Prior to the current coronavirus (COVID-19) outbreak, ACM studied what factors influence the ability to expand capacity. At first glance, the study revealed that, in normal times, hospitals have sufficient physical capacity (beds, rooms) for insurers to relocate health care. Today (and also in the future), however, we are dealing with staff shortages, which reduces the ability of hospitals to expand their capacity and, by extension, their relocation options.

Martijn Snoep, Chairman of the Board of ACM, explains: ‘ACM wants to help ensure that health care remains affordable and of high quality. To that end, it is vital that hospitals and health insurers have a balanced relationship in negotiations. These studies show that insured threaten to walk out on their current insurer if they see that their insurer does not include a certain hospital in its network. Furthermore, health insurers have few options to relocate health care to nearby hospitals due to staff shortages. That affects the balance between health insurers and hospitals in negotiations. We will take these insights into account in our assessments of mergers and collaborations.’

Three studies 

These conclusions follow from three ACM studies. All three of them provide more insight into the balance in negotiations between hospitals and health insurers. The 2020 Health Care Monitor shows what insured think health insurers should focus on in their activities. Another study looked into the question of how insured will react if a health insurer does not include a specific hospital in its network. The third study offers insight into the options that hospitals in two regions have for expanding their capacities, and what factors influence such expansions.

See also

05-06-2020 Cutting the group insurance discount in half for the basic health insurance will not result in additional switchers (in Dutch)
05-06-2020 Study: capacity problems among hospitals (in Dutch)
05-06-2020 Study: Reaction of insured if a hospital is not included in an insurer’s network