Rising inflation can create disparities in budgets across hospitals due to differences in cost structures and contracts. This study examines how inflation affects Dutch hospitals and finds substantial variation in hospital-specific inflation rates, especially after the high inflation in 2021. Despite this, reimbursement differences do not align with these variations, suggesting no explicit adjustments. Insurers generally do not account for hospital-level inflation differences, leaving hospitals only partially compensated for overall inflation.
Our results show that there is considerable variation in hospital-specific inflation rates. These differences have increased particularly since 2021, when inflation rose sharply following the war in Ukraine. Despite this clear variation, linear regression analyses show that there is no significant relationship between differences in inflation and differences in hospital reimbursements. This suggests that, historically, no targeted adjustments have been made for hospitals that are relatively harder hit by inflation. In other words: hospitals facing higher cost increases are not systematically compensated extra.
Furthermore, interviews with relevant stakeholders indicate that health insurers do not explicitly factor in inflation differences between individual hospitals in their contracting. Instead, they primarily use generic inflation adjustments at national level. As a result, hospitals are only partially compensated for the actual rise in their costs. Higher inflation also increases the scope for negotiation and offers health insurers more opportunities to differentiate in healthcare procurement.
Inflation is just one of the factors that determine the ultimate financial scope available to hospitals, alongside, for example, price and volume agreements and any efficiency-related reductions. In practice, inflation compensation cannot be viewed in isolation from these factors: a reduction in inflation compensation can also be interpreted as a generic efficiency-related reduction. Rising inflation therefore leads to rising macro-level frameworks, which are then passed on to hospital budgets, either in full or in part.
Academie voor betaalbaarheid van zorg (Nederlandse policybrief voor VWS)
Health system effects of economy-wide inflation: How resilient are European health systems? (Policy brief on the effects of inflation in Europe for the European Observatory on Health Systems and Policies)