Established practice
Insurer contract negotiations aren't going your way, and your rates are falling behind costs
Insurer contracts for independent hospitals require structured evidence, negotiation strategy, and benchmarking data. Most hospitals negotiate without all three, and accept rates that don't keep pace with cost inflation.
- steps
- 7
- steps
- to start
- 2 to 4 weeks
- to start
The short answer
Insurers come to negotiations with better data than most independent hospitals. You close the gap by knowing your cost and margin per procedure, your volume with that insurer, and what the insurer needs from you, such as local capacity, waiting times or a gap in its network. Decide your walk-away position before the first meeting, not during it.
7 steps
Do it yourself: step by step
0 of 7 done
For your top 30 procedures by insurer income, calculate full cost per episode (theatre time, bed days, consumables, implants, drugs) and compare with the tariff paid by each insurer
- Time
- 2 to 4 weeks
- Typical cost
- Internal time
- Who does it
- Finance director with theatres and procurement
Done when: A table shows margin per procedure per insurer
This problem is Solvable.
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Insurer negotiation preparation sheet
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Insurer negotiation preparation sheet
Insurer: [Insurer name] Contract renewal date: [date] Lead negotiator: [Name]
1. Procedure economics (top 30 by income)
| Procedure | CCSD code | Annual volume with this insurer | Current tariff | Full cost per episode | Margin £ | Margin % | Proposed tariff | Walk-away tariff |
|---|---|---|---|---|---|---|---|---|
| [Primary hip replacement] | [code] | [n] | [£] | [£] | [£] | [%] | [£] | [£] |
| [Cataract] | ||||||||
| [Knee arthroscopy] |
2. Our value
- CQC rating: [rating, date]
- PHIN measures: [readmissions, infections, patient feedback]
- Average wait from referral to treatment: [weeks]
- Spare capacity: [theatre sessions per week]
- Specialties with few local alternatives: [list]
3. What the insurer needs from us
- [e.g. capacity in orthopaedics]
- [e.g. lower cost for day case procedures]
- [e.g. inclusion in pathway or network]
4. Terms we will not accept
- Payment terms beyond [30] days
- Unilateral tariff changes mid-contract
- [Other]
5. Trades we can offer
- [e.g. lower day case rate in return for volume commitment]
- [e.g. package prices for named procedures]
Avoid these
Common mistakes
- Negotiating on overall percentage uplift without knowing margin per procedure.
- Going into the meeting without an agreed walk-away position.
- Conceding on payment terms and pre-authorisation rules that cost more than the tariff gain.
- Not checking after signing that the insurer actually pays the agreed rates.
- Relying on one insurer for most of your income without a plan B.
Free personal check
Done by Paul Robinson, not software
Answer eight quick questions and I'll show you where insurers have the upper hand
What I need from you
- Eight tap answers about your contract data and approach
- Your main insurers
What you get
- Where your preparation falls short of the insurer's
- The three things to build before your next round
- A simple value case outline
Within 2 working days
No sign-in, no sales call. I read every request myself and reply on WhatsApp.
Free tools
Check where you stand
Benchmarks
About 670,300 insured admissions in the UK in 2025, about 70% of 953,000 private admissions
Shows how dependent independent hospitals are on insurer contracts
A 3% tariff improvement on £10m of insured income is worth £300,000 a year
Simple illustration for a mid-sized independent hospital (Solvable estimate: illustrative arithmetic)
Solvable estimate
Paul Robinson
14 years in UK private healthcare
I solve this one for hospitals
Want a hand? I'll look at your situation and tell you the three things I'd tackle first.
A few quick questions, about two minutes. I read every one myself and usually reply the same day.
No sales call unless you ask for one. Just a straight answer from me.
I reply personally, usually the same day.
Questions
Frequently asked questions
Can we compare our tariffs with other hospitals?
Not directly. Insurer tariffs are confidential, and sharing them, or your negotiating plans, with competing hospitals risks breaching competition law. Use your own cost data and published quality data instead. This is general information, not legal advice. Speak to a competition lawyer before any benchmarking exercise that involves other hospitals' prices.
What if the insurer will not move?
Look at the terms rather than the tariff: payment times, pre-authorisation, package prices or volume. If none move and margin is negative, consider limiting that work.
Should our consultants be involved?
Yes, for evidence on quality and access, but keep tariff discussions to the hospital team.
How early should we start?
At least six months before renewal. Building the cost data alone can take a month.
Do we need an adviser?
Not always. If you have a finance director who can build procedure costs and a director who can negotiate, you can do it yourselves.
Insured patients going elsewhere before they reach you?
See: Insurers are routing patients past your hospital
Last reviewed:
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