February 9 2015 00:00

Contracting for health care services

Recent research into how health insurance companies contract for healthcare services shows that buyers should not negotiate for lower rates of services. Rather they should adopt a value chain approach to identify significant opportunities for improvement to change prescription patterns by doctors, reduce the number of service providers and reduce the bandwidth of the rates that they currently pay. Our research was focused on contracting for blood diagnostic services. It showed that the health insurance company actually spent 25% more than originally was known to them resulting in in a nearly €100 million spend annually. Next, the research identified massive differences in prescription behavior by doctors. Some doctors would indicate 6-8 diagnostics to be conducted. Others would easily tick off 12 to 20 blood diagnostics for their patients.Next the number of contracted laboratories per district (42) ranged from 2 to 5. Our research conveyed that blood diagnostics capacity and laboratories in the Netherlands is sufficient to probably serve half of Europe's need. Finally, we observed large differences between minimum and maximum rates that were paid per diagnostic service. The range between min and max rates could not be explained. When the health insurance company would adopt a more integrated approach to the problem, we estimated that they could easily save €25 million within one year. To the benefit of themselves and the insurance premium paid by consumers!