Recent developments in Dutch hospitals; How does competition impact on inpatient care?

Posted by D. Daniel Sokol

Sylvia Meijer, Rudy Douven, and Bernard van den Berg (all CPB Netherlands Bureau for Economic Policy Analysis) ask about Recent developments in Dutch hospitals; How does competition impact on inpatient care?

ABSTRACT: The aim of this research was to explore the effect of the introduction of managed competition in Dutch inpatient hospital care. Firstly, we performed a literature study to determine competitive forces that have played a role in the US hospital market. Next, we discussed these forces with Dutch hospital board members to ascertain their relevance to the Dutch hospital market. The interviews revealed that Dutch insurers are cautiously initiating new initiatives such as selective contracting and united purchase combinations, and fiercely negotiate on price when buying hospital care. The board members suggested that the way to raise turnover is to increase hospital production. This resulted in growing quality competition between hospitals through the purchase of new technology and the launch of outpatient centres for specific treatments. Other forces that may have increased hospital production are the fee-for-service payment ! system of medical specialists and the practice of defensive medicine. As health insurers are apparently still unable to directly steer and control volume, this may result in more treatments by hospitals.