Improving Performance in Complex Surroundings: A Mixed Methods Evaluation of Two Hospital Strategies in the Netherlands

Abstract

Background: Hospital strategies aimed at increasing quality of care and simultaneously reducing costs show potential to improve healthcare, but knowledge on real-world effectiveness is limited. In 2014, two Dutch hospitals introduced such quality-driven strategies. Our aim was to evaluate contexts, mechanisms, and outcomes of both strategies using multiple perspectives. Methods: We conducted a mixed methods evaluation. Four streams of data were collected and analysed: (1) semi-structured interviewing of 62 stakeholders, such as medical doctors, nurses, managers, general practitioners and consultants; (2) financial statements of both organisations and other hospitals in the Netherlands (counterfactual); (3) national database of quality indicators, and patient-reported experiences; (4) existing material on strategy development and effects. Results: Both strategies resulted in a relative decrease in volume of care within the hospital, while quality of care has not been affected negatively. One hospital failed to cut operating costs sufficiently, resulting in declining profit margins. We identified six main mechanisms that impacted these outcomes: (1) Quality-improvement projects spur change and commitment; (2) increased coordination between hospital and primary care leads to substitution of care; (3) insufficient use of data and support hinder quality improvement; (4) scaling down hospital facilities is required to convert volume reductions to cost savings; (5) shared savings through global budgets lead to shared efforts between payer and hospital; and (6) financial security for physicians facilitates shift towards quality-driven care. Conclusion: This integrated analysis of mixed data sources demonstrated that the institutionwide nature of the strategies has induced a shift from a focus on production towards quality of care. Longer-term (financial) sustainability of hospital strategies aimed at decelerating production growth requires significant efforts in reducing fixed costs. This strategy poses financial risks for the hospital if operating costs are insufficiently reduced or if payer alignment is compromised.

Measuring Active Purchasing in Healthcare: Analysing Reallocations of Funds Between Providers to Evaluate Purchasing Systems Performance in the Netherlands

“…As quality measures, we calculate mean z-scores of publicly available structure, process and outcome indicators from 2010-2018. For details on Dutch hospital quality indicators, see Wackers et al 34 As robustness check, — following Chandra et al — we estimate a pooled regression relating absolute size to quality measures to correct for the possibility that large providers have higher quality overall. Due to limited data availability of hospital standardized mortality ratio (HSMR) data (available for general hospitals and UMCs only from 2010-2013 and 2016-2019), we include HSMR in a robustness check.…”

How to Design Integrated Strategies to Improve Healthcare Quality Whilst Containing Healthcare Costs? A Response to the Recent Commentaries

“…For example, a strategy to contain total hospital costs by reducing unnecessary treatments may actually increase the cost per patient. 6 From the hospital perspective, a strategy may be considered successful if costs decline while reimbursements or budgets remain the same, as this would imply additional margins. This may be challenging in itself when the correlation between hospital costs and reimbursements is limited, as is often the case.…”

“…While in theory a shared savings model could pursue both aims, in practice this is challenging — and risky — for hospitals. 6 , 8 For example, by demonstrating success in terms of cost containment, a hospital signals a potential for additional cost cutting by payers.…”

“…However, it is challenging to retain physician support when economic and clinical considerations misalign 9 : cost containment often requires staff reductions, as this is the bulk of hospital spending. 6 , 10 Strong leadership is critical to retain employee engagement, especially when workload increases while staff is reduced. 3 …”

Why Reducing Low-Value Care Fails to Bend the Cost Curve, and Why We Should Do it Anyway

“…In order to reduce the spending, the essential first step is to reduce the volume of care. 11 Thus, care substitution should be discouraged. In the real world of the internal budgetary politics in hospitals, however, active volume reductions are rare.…”