Rising inflation can lead to unequal financial pressure across hospitals, for example due to differences in cost structures, energy contracts and rising interest rates. In this study, we investigated how the impact of inflation varies between Dutch hospitals and to what extent this is compensated for within the current healthcare system. In the Netherlands, macro expenditure frameworks are, in principle, fully and automatically adjusted for average inflation. At the same time, this does not mean that the adjustment is automatically passed on to individual hospitals.
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 further.
Furthermore, interviews with relevant stakeholders indicate that health insurers do not explicitly take inflation differences between individual hospitals into account in their contracting. Instead, they primarily apply 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 greater opportunities to differentiate in their healthcare procurement.
Inflation is just one of the factors determining the ultimate financial scope for hospitals, alongside, for example, price and volume agreements and any efficiency discounts. 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 discount. Rising inflation therefore leads to rising macro-level frameworks, which are then passed on – in full or in part – to hospital budgets.
The following publications are linked to this topic:
Academy for Healthcare Affordability (Dutch policy brief for the Ministry of Health, Welfare and Sport)
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)