Health Care Brokers: Cartel Offices?

1. Health Care Brokers: Cartel Offices? Rob Vossen Netherlands Competition Authority Antitrust Department

2. 1. Introduction Introduction History Health care brokerage market(s) Competition problems Question

3. 2. Collective Bargaining Past: Collective negotiations between health care providers and health insurance companies on establishment and tariffs on regional level Now: Prohibited by competition law (leads to price agreements and dividing of markets) If more than 8 undertakings with joint turnover more than € 908,000

4. 3. Individual Negotiations? • High transactions costs (providers/insurers) • Horizontal cooperation? • Or health care broker…

5. 4. Many sided Market Insurance Company Broker Health care provider Patient

6. 5. Health Care Brokerage • Vertical agreement between broker and healthcare provider not in itself a competitive restriction • Restriction of competition if broker represents competing providers  indirect tuning between providers • No restriction of competition if broker respresents different types of providers or providers in different regions

7. 6. Representing Competing Providers: Conditions • Separate negotiations for each provider or permitted cooperation of providers, not negiotiate for the group as a whole • No active engagement with the commercial policy of providers • Can not lead to horizontal information exchange or tuning of behaviour between providers (not branch organization)

8. 7. Practice • Not used much in practice • Except: pharmacies • 75% or more of independent pharmacies represented by one health care broker • Pharmacy chains negotiate for themselves • Only in negotiations with 6 health insurance companies

9. 8. Question • Arguments for additional (structural) conditions on health care brokerage to avoid competition problems???