Reducing cost of hospital contracts for health insurers

Frontier has recently provided economic and strategic advice to a major private health insurer in the European Union. The work involved a detailed empirical analysis of the reasons for differences in costs among providers of hospital services to the insurance company. Frontier advised the company on how it could develop mechanisms to reduce costs from the more "expensive" hospital providers. The advice not only covered the framework for discussing hospital charges with providers but also concentrated on how the insurance tariff to customers could be adapted to influence the future behaviour of hospital providers.