Hospital-Insurer Bargaining

In the Netherlands, very little research has been done on the topic of insurer-hospital bargaining. The Netherlands Competition Authority (hereinafter: NMa) is interested in this bargaining process, since it can broaden their view on the health care market. The current assumption is that having a large market share leads to a strong bargaining position. In practice, the picture might be more complicated. More determinants, next to the market share and market concentration, may influence the bargaining process between the hospital and health insurer. To give some examples, one might think of the relationship between the insurer and the hospital, a hospital’s reputation among its patients, the quality of care delivered, or the insurer’s ability to channel patients. In this thesis it is investigated what determinants might influence the perceived bargaining position of the hospital and the health insurer. To the NMa, this research might lead to a better understanding of the bargaining process and it will give insight into whether the current framework, when for example assessing proposed mergers or litigating possible cartels, is sufficient or if other determinants should be considered as well. This research seems also relevant for the Dutch Healthcare Authority (hereinafter: NZa), since it might contribute to their knowledge as well about the functioning of the current health care system and more specifically on the care purchasing market. If the factors that determine (i.e. the determinants) the perceived bargaining position are clarified through this research, the NZa could also pay attention to these factors when monitoring the care purchasing market. To society, this thesis is relevant in an indirect manner: consumers of health insurance and health care can only benefit from competition if the competitive markets are functioning properly and therefore well monitored. The NMa and NZa play an important role in this monitoring process. This thesis, as argued above, may help the NMa and NZa in this monitoring role as it will gain insight in the care purchasing market. Indirectly consumers of health insurers and health care will benefit from this, since it might lead to the NMa and NZa being better able to monitor the markets and therefore will be a step towards a fairer market. Finally, this thesis adds value to existing research about bargaining positions and bargaining processes in deregulated hospital markets. Much of the current research is based on market shares and market concentration as determinants of bargaining positions. However, much of the bargaining process is left unexplained. Moreover, much literature on this topic is based on health care markets in the United States. This thesis will therefore add to the very limited existing Dutch research on this topic.