Reasons for merging and collaborating in healthcare: Marriage or living apart together?

BACKGROUND: Across OECD countries, integration between healthcare organisations has become an indispensable part of contemporary healthcare provision. In recent years, inter-organisational collaboration has increasingly been encouraged in health and competition policy at the expense of mergers. Yet, understanding of whether healthcare organisations make an active choice between merging and collaborating is lacking. Hence, this study systematically examines (i) healthcare executives' motives for integration, (ii) their potential trade-offs between collaborating or merging, and (iii) the barriers to collaborating perceived by them. METHODS: Early 2019, an online questionnaire was conducted among a nationwide panel of 714 healthcare executives in the Netherlands. Because of their strategic position within healthcare organisations as end-responsible managers, healthcare executives are especially suited to provide broad and in-depth knowledge on the internal and external processes and decisions. Three hundred thirty-seven Dutch healthcare executives completed the questionnaire (response rate 47%). This study sample was representative of the largest healthcare sectors in the Netherlands. In total, 137 mergers and 235 inter-organisational collaborations were reported. Both closed questions and open-ended questions were systematically analysed. RESULTS: Improving or broadening healthcare provision is the foremost motive for mergers as well as inter-organisational collaborations. When considering both types, reducing governance complexity is one of the decisive reasons to opt for a merger, whereas aversion towards a full merger and lack of support base within the own organisation convinced healthcare executives to choose for a collaboration. When comparing specific healthcare sectors, the overlap in pursued motives and sub-motives indicates that inter-organisational collaborations and mergers are used for comparable objectives. Only a small minority of the responding executives switched between both types of integration. Institutional barriers, such as laws, regulations and financing regimes, appear to be the most restricting for healthcare executives to engage in inter-organisational collaborations. CONCLUSIONS: Our integral approach and systematic comparison across sectors could serve policymakers, regulators and healthcare providers in aligning organisational objectives and societal objectives in decision-making on collaborations and mergers. Future research is recommended to study multiple collaboration and merger cases qualitatively for a detailed examination of decision-making by healthcare executives, and develop an integral assessment framework for balancing collaborations and mergers based on their effects in the medium to long term.

If you say so: A mixed-method study of hospital mergers and quality of care.

BACKGROUND: Despite a lack of supporting evidence, hospitals continue to merge in pursuit of quality improvements. PURPOSE: We seek to develop a more thorough understanding of the quality effects of hospital mergers by integrating various theoretical perspectives using a mixed-methods design. METHODOLOGY: Quantitatively, we tested the quality effect of all consummated hospital mergers in the Netherlands between 2008 and 2014 on 15 quality indicators (with 82 measurements at hospital, department, and disease levels) using a difference-in-difference approach with Bonferroni correction. Qualitatively, we conducted three comparative case studies to examine how hospital executives, managers, and medical professionals perceive the quality impact of hospital mergers. RESULTS: Our quantitative results reveal few significant effects of hospital mergers on quality of care at all levels. After applying Bonferroni correction, two quality indicators are negatively associated with hospital mergers. However, the qualitative results indicate that hospital staff have positive perceptions of the mergers' quality implications, resulting from scale and shock effects. CONCLUSION: The perceptions of hospital staff regarding mergers diametrically oppose their measurable effects. However, the operationalization of quality by hospital staff members differs considerably from the way it is quantitatively measured. The positive perceptions of hospital staff toward mergers could further contribute to the institutionalization of mergers as a quality improvement strategy. PRACTICE IMPLICATIONS: Hospital managers seeking measurable quality improvements should be wary of merging, despite potential positive perceptions toward it within the organization. In case they do decide to merge, mitigating difficulties in the postmerger integration processes seem most pertinent to achieve measurable effects.

Prices and market power in mental health care: Evidence from a major policy change in the Netherlands.

In the Dutch health care system of managed competition, insurers and mental health providers negotiate on prices for mental health services. Contract prices are capped by a regulator who sets a maximum price for each mental health service. In 2013, the majority of the contract prices equaled these maximum prices. We study price setting after a major policy change in 2014. In 2014, mental health care providers had to negotiate prices with each individual health insurer separately, instead of with all insurers collectively as in 2013. Moreover, after a cost-price revision, the regulator increased in 2014 maximum prices by about 10%. Insurers and mental health providers reacted to this policy change by setting most contract prices below the new maximum prices. We find that in 2014 mental health providers with more market power, that is, a higher willingness-to-pay measure, contracted significantly higher prices. Some insurers negotiated significantly lower prices than other insurers but these differences are unrelated to an insurers' market share.

Return to sender: Unraveling the role of structural and social network ties in patient sharing networks.

Healthcare is increasingly delivered through networks of organizations. Well-structured patient sharing networks are known to have positive associations with the quality of delivered services. However, the drivers of patient sharing relations are rarely studied explicitly. In line with recent developments in network and integration theorizing, we hypothesize that structural and social network ties between organizations are uniquely associated with a higher number of shared patients. We test these hypotheses using a Bayesian zero-dispersed Poisson regression model within the Additive and Multiplicative Effects Framework based on administrative claims data from 732,122 dermatological patients from the Netherlands in 2017. Our results indicate that 2.6% of all dermatological patients are shared and that the amount of shared patients is significantly associated with structural (i.e. emergency contracts) and social (i.e. shared physicians) ties between organizations, confirming our hypotheses. We also find some evidence that patients are shared with more capable organizations. Our findings highlight the role of relational ties in the way health services are delivered. At the same time, they also raise some potential anti-trust concerns.

The impact of an 'evergreening' strategy nearing patent expiration on the uptake of biosimilars and public healthcare costs: a case study on the introduction of a second administration form of trastuzumab in The Netherlands.

In this paper, we explore dynamic market share and public healthcare costs of trastuzumab's evergreening (subcutaneous) variant during introduction of trastuzumab's competitive biosimilar variants in the Netherlands. We used a time series design to assess dynamic market share of trastuzumab's evergreening variant after introducing trastuzumab's biosimilar variants, focusing on the number of treatments and patients. The public healthcare costs of this evergreening strategy were estimated using administrative claims data. Our results show that the original trastuzumab was completely replaced by the subcutaneous and biosimilar variants. The uptake of the subcutaneous form peaked at 50% market share but after the introduction of biosimilars progressively reduced to a market share of 20%, resulting in a more competitive market structure. The public healthcare costs for trastuzumab significantly decreased after the introduction of the biosimilars. After the introduction of the biosimilars, a substantial price drop is visible, with the subcutaneous version, still under patent, also falling sharply in price but less strongly than the iv/biosimilar version. As the costs are publicly funded, we recommend a more explicit societal debate to consider if the potential benefits of subcutaneous Herceptin® (and other similar medicines) are worth the additional costs, and at which price it should be reimbursed as the part of the benefit package.

Associations of hospital volume and hospital competition with short-term, middle-term and long-term patient outcomes after breast cancer surgery: a retrospective population-based study.

OBJECTIVES: For oncological care, there is a clear tendency towards centralisation and collaboration aimed at improving patient outcomes. However, in market-based healthcare systems, this trend is related to the potential trade-off between hospital volume and hospital competition. We analyse the association between hospital volume, competition from neighbouring hospitals and outcomes for patients who underwent surgery for invasive breast cancer (IBC). OUTCOME MEASURES: Surgical margins, 90 days re-excision, overall survival. DESIGN, SETTING, PARTICIPANTS: In this population-based study, we use data from the Netherlands Cancer Registry. Our study sample consists of 136 958 patients who underwent surgery for IBC between 2004 and 2014 in the Netherlands. RESULTS: Our findings show that treatment types as well as patient and tumour characteristics explain most of the variation in all outcomes. After adjusting for confounding variables and intrahospital correlation in multivariate logistic regressions, hospital volume and competition from neighbouring hospitals did not show significant associations with surgical margins and re-excision rates. For patients who underwent surgery in hospitals annually performing 250 surgeries or more, multilevel Cox proportional hazard models show that survival was somewhat higher (HR 0.94). Survival in hospitals with four or more (potential) competitors within 30 km was slightly higher (HR 0.97). However, this effect did not hold after changing this proxy for hospital competition. CONCLUSIONS: Based on the selection of patient outcomes, hospital volume and regional competition appear to play only a limited role in the explanation of variation in IBC outcomes across Dutch hospitals. Further research into hospital variation for high-volume tumours like the one studied here is recommended to (i) use consistently measured quality indicators that better reflect multidisciplinary clinical practice and patient and provider decision-making, (ii) include more sophisticated measures for hospital competition and (iii) assess the entire process of care within the hospital, as well as care provided by other providers in cancer networks.

Inter-organizational collaboration between healthcare providers.

Across OECD countries, healthcare organizations increasingly rely on inter-organizational collaboration (IOC). Yet, systematic insight into the relations across different healthcare sectors is lacking. The aim of this explorative study is twofold. First, to understand how IOC differs across healthcare sectors with regards to characteristics, motives and the role of health policy. Second, to understand which potential effects healthcare executives consider prior to the establishment of the collaborations. For this purpose, a survey was conducted among a representative panel of Dutch healthcare executives from medium-sized or large healthcare organizations. Almost half (n = 344, 48%) of the invited executives participated. Our results suggest that differences in policy changes and institutional developments across healthcare sectors affect the scope and type of IOC: hospitals generally operate in small horizontal collaborations, while larger and more complex mixed and non-horizontal collaborations are more present among nursing homes, disability care and mental care organizations. We find that before establishing IOCs, most healthcare executives conduct a self-assessment including the potential effects of the collaboration. The extensive overview of policy developments, collaboration types and intended outcomes presented in our study offers a useful starting point for a more in-depth assessment of the effectiveness of collaborations among healthcare organizations.

Patient hospital choice for hip replacement: empirical evidence from the Netherlands.

In the Dutch health care system, hospitals are expected to compete. A necessary condition for competition among hospitals is that patients do not automatically choose the nearest hospital, but are-at least to some extent-sensitive to differences in hospital quality. In this study, an analysis is performed on the underlying features of patient hospital choice in a setting where prices do not matter for patients as a result of health insurance coverage. Using claims data from all Dutch hospitals over the years 2008-2010, a conditional logit model examines the relationship between patient characteristics (age, gender and reoperations) and hospital attributes (hospital quality information, waiting times on treatments and travel time for patients to the hospitals) in the market for general non-emergency hip replacement treatments. The results show that travel time is the most important determinant in patient hospital choice. From our analysis, however, it follows that publicly available hospital quality ratings and waiting times also have a significant impact on patient hospital choice. The panel data used for this study (2008-2010) is rather short, which may explain why no coherent and persistent changes in patient hospital choice behaviour over time are found.