Competition policy for health care provision in the Netherlands

Schut, Erik; Varkevisser, Marco

doi:10.1016/j.healthpol.2016.11.002

Cited by 59 publications

(39 citation statements)

References 16 publications

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“…Maarse and colleagues framed the relationship between insurers and providers as a power conflict in which providers find that the power shift has gone too far and GPs perceive the offered contracts as a diktat 68 . However, others have argued that the bargaining position of health insurers vis‐à‐vis GPs and hospitals remains relatively weak 69,78 . In the Netherlands, GPs are represented in a strong professional organization called the National Association of General Practitioners (LHV).…”

Section: The Netherlandsmentioning

confidence: 99%

Power and Purchasing: Why Strategic Purchasing Fails

2020

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Strategically purchasing health care has been and continues to be a popular policy idea around the world. Key asymmetries in information, market power, political power, and financial power hinder the effective implementation of strategic purchasing. Strategic purchasing has consistently failed to live up to its promises for these reasons. Future strategies based on strategic purchasing should tailor their expectations to its real effectiveness. Context Strategic purchasing of health care has been a popular policy idea around the world for decades, with advocates claiming that it can lead to improved quality, patient satisfaction, efficiency, accountability, and even population health. In this article, we report the results of an inquiry into the implementation and effects of strategic purchasing. Methods We conducted three in‐depth case studies of England, the Netherlands, and the United States. We reviewed definitions of purchasing, including its slow acquisition of adjectives such as strategic, and settled on a definition of purchasing that distinguishes it from the mere use of contracts to regulate stable interorganizational relationships. The case studies review the career of strategic purchasing in three different systems where its installation and use have been a policy priority for years. Findings No existing health care system has effective strategic purchasing because of four key asymmetries: market power asymmetry, information asymmetry, financial asymmetry, and political power asymmetry. Conclusions Further investment in policies that are premised on the effectiveness of strategic purchasing, or efforts to promote it, may not be worthwhile. Instead, policymakers may need to focus on the real sources of power in a health care system. Policy for systems with existing purchasing relationships should take into account the asymmetries, ways to work with them, and the constraints that they create.

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Section: The Netherlandsmentioning

confidence: 99%

Power and Purchasing: Why Strategic Purchasing Fails

2020

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“…( 2011 ) found evidence of a significant positive effect of hospital market share on price–cost margins. Due to horizontal consolidation, the hospital market has become highly concentrated over the years (Schut and Varkevisser, 2017 ). A recent investigation by the Dutch competition authority found evidence of increasing hospital prices due to hospital mergers over the period 2007–2014 and of a positive association between hospital prices and market concentration (ACM, 2017 ).…”

Section: Discussionmentioning

confidence: 99%

Does managed competition constrain hospitals' contract prices? Evidence from the Netherlands

Douven

Burger

Schut

2019

HEPL

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In the Dutch health care system, health insurers negotiate with hospitals about the pricing of hospital products in a managed competition framework. In this paper, we study these contract prices that became for the first time publicly available in 2016. The data show substantive price variation between hospitals for the same products, and within a hospital for the same product across insurers. About 27% of the contract prices for a hospital product are at least 20% higher or lower than the average contract price in the market. For about half of the products, the highest and the lowest contract prices across hospitals differ by a factor of three or more. Moreover, hospital product prices do not follow a consistent ranking across hospitals, suggesting substantial cross-subsidization between hospital products. Potential explanations for the large and seemingly random price variation are: (i) different cost pricing methods used by hospitals, (ii) uncertainty due to frequent changes in the hospital payment system, (iii) price adjustments related to negotiated lumpsum payments and (iv) differences in hospital and insurer market power. Several policy options are discussed to reduce variation and increase transparency of hospital prices.

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“…These market-oriented reforms resulted in a healthcare system organized around three interconnected submarkets in which the health providers, health insurers and patients interact. Health insurers in the Netherlands are expected to act as prudent buyers of healthcare services (Schut and Varkevisser, 2017). To fulfil this role, each health insurer is expected to negotiate with healthcare providers on price, quality and/or volume.…”

Section: B the Dutch Healthcare Systemmentioning

confidence: 99%

“…For the remainder of the DTCs (labelled as the A-segment), including the most complex ones such as organ transplantations, maximum prices are determined by the NZa. In addition to competing for favourable contracts with health insurers, hospitals also compete directly for patients (Schut and Varkevisser, 2017). 6 Since the introduction of the new Dutch health care system, patients are encouraged to make an active choice between alternative providers.…”

Section: Stimuli For Hospital Competitionmentioning

confidence: 99%

Collaboration and Competition Policy in a Market-Based Hospital System: A Case Study from the Netherlands

Schors¹,

Kemp²,

Varkevisser³

2020

Journal of Competition Law &Amp; Economics

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In the Dutch healthcare system, provider competition is used as a tool to improve efficiency. From a competition policy perspective, little is known about how collaboration among healthcare providers contributes to overall patient welfare, and how a balance is achieved between scale benefits and preventing anti-competitive collusion. This paper examines the ex-post effects of a Dutch case study in which three competing hospitals have collaborated to provide high-complexity low-volume cancer surgery, an arrangement that tests the limits of permissibility under the Dutch cartel prohibition. Our preliminary empirical research demonstrated only a modest increase in price and travel time for some of the tumour surgeries. Volume analysis showed that the intended centralization of surgical procedures has not been fully realized. Our findings highlight the importance of a comprehensive self-assessment by the collaborating hospitals to ex-ante assess (potential) efficiencies and antitrust risks. Such self-assessments could benefit from research focused on which collaborations are most appropriate to achieve quality gains. For the ex-post assessment by competition authorities following the cartel prohibition, a more thorough insight into the (long-term) changes in hospital prices, profitability, and quality after collaboration is needed.

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Competition policy for health care provision in the Netherlands

Cited by 59 publications

References 16 publications

Power and Purchasing: Why Strategic Purchasing Fails

Power and Purchasing: Why Strategic Purchasing Fails

Does managed competition constrain hospitals' contract prices? Evidence from the Netherlands

Collaboration and Competition Policy in a Market-Based Hospital System: A Case Study from the Netherlands

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