Financing COVID-19-related health care costs in the Dutch competitive health system during 2020 and 2021: Overall experiences and policy recommendations for improving health system resilience.

The Dutch health system is based on the principles of managed (or regulated) competition, meaning that competing risk bearing insurers and providers negotiate contracts on the price, quantity and quality of care. The COVID-19 pandemic caused a huge external shock to the health system which potentially distorted the conditions required for fair competition. Therefore, an important question is to what extent was the competitive Dutch health system resilient to the financial shock caused by the pandemic? Overall, the Dutch competitive health system proved to be sufficiently flexible and resilient at absorbing the financial shock caused by the COVID-19 pandemic in 2020 and 2021 due to an effective combination of regulatory and self-regulatory measures. However, based on the overall experiences in the Netherlands, from the health policy perspective improvements are needed aimed at (i) refining the catastrophic costs clause included in the Health Insurance Act, (ii) reducing the vulnerability of the Dutch risk equalisation system to distortions due to unforeseen catastrophic health care costs, and (iii) establishing more equal financial risk sharing between health insurers and health care providers. These improvements are also relevant for other countries with a health system based on the principles of managed (or regulated) competition.

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.

Emergency care reconfiguration in the Netherlands: conflicting interests and trade-offs from a multidisciplinary perspective.

Many countries are reconfiguring their emergency care systems to improve quality and efficiency of care, and this often includes the concentration of emergency departments (EDs). This trend is evident in the Netherlands, but the best approach is the subject of debate among stakeholders. We (i) examined the views of stakeholders on the concentration of EDs in the Netherlands and (ii) identified the main conflicting interests and trade-offs that are relevant for health policy. To do this, we organised focus groups and semi-structured interviews with emergency care professionals, hospital executives and selected external stakeholders. First, the participants saw both advantages and disadvantages to concentration, but these were also contested and debated. Second, we found that - sometimes conflicting - public health care goals (i.e. quality, accessibility and affordability) and narrower interests (e.g. the interests of specific hospitals, insurers, medical specialists and local administrators) were both pointed out. Third, there was no clear preferred approach to the future organisation of EDs, although most stakeholders mentioned some form of centralised decision-making at the national level, combined with regional customisation. Our findings will facilitate health policy decision-making around the reconfiguration of emergency care with the long-term goal of achieving efficient and high-quality emergency care.

Health service planning to assess the expected impact of centralising specialist cancer services on travel times, equity, and outcomes: a national population-based modelling study.

BACKGROUND: Centralisation of specialist cancer services is occurring in many countries, often without evaluating the potential impact before implementation. We developed a health service planning model that can estimate the expected impacts of different centralisation scenarios on travel time, equity in access to services, patient outcomes, and hospital workload, using rectal cancer surgery as an example. METHODS: For this population-based modelling study, we used routinely collected individual patient-level data from the National Cancer Registration and Analysis Service (NCRAS) and linked to the NHS Hospital Episode Statistics (HES) database for 11 888 patients who had been diagnosed with rectal cancer between April 1, 2016, and Dec 31, 2018, and who subsequently underwent a major rectal cancer resection in 163 National Health Service (NHS) hospitals providing rectal cancer surgery in England. Five centralisation scenarios were considered: closure of lower-volume centres (scenario A); closure of non-comprehensive cancer centres (scenario B); closure of centres with a net loss of patients to other centres (scenario C); closure of centres meeting all three criteria in scenarios A, B, and C (scenario D); and closure of centres with high readmission rates (scenario E). We used conditional logistic regression to predict probabilities of affected patients moving to each of the remaining centres and the expected changes in travel time, multilevel logistic regression to predict 30-day emergency readmission rates, and linear regression to analyse associations between the expected extra travel time for patients whose centre is closed and five patient characteristics, including age, sex, socioeconomic deprivation, comorbidity, and rurality of the patients' residential areas (rural, urban [non-London], or London). We also quantified additional workload, defined as the number of extra patients reallocated to remaining centres. FINDINGS: Of the 11 888 patients, 4130 (34·7%) were women, 5249 (44·2%) were aged 70 years and older, and 5005 (42·1%) had at least one comorbidity. Scenario A resulted in closures of 43 (26%) of the 163 rectal cancer surgery centres, affecting 1599 (13·5%) patients; scenario B resulted in closures of 112 (69%) centres, affecting 7029 (59·1%) patients; scenario C resulted in closures of 56 (34%) centres, affecting 3142 (26·4%) patients; scenario D resulted in closures of 24 (15%) centres, affecting 874 (7·4%) patients; and scenario E resulted in closures of 16 (10%) centres, affecting 1000 (8·4%) patients. For each scenario, there was at least a two-times increase in predicted travel time for re-allocated patients with a mean increase in travel time of 23 min; however, the extra travel time did not disproportionately affect vulnerable patient groups. All scenarios resulted in significant reductions in 30-day readmission rates (range 4-48%). Three hospitals in scenario A, 41 hospitals in in scenario B, 13 hospitals in scenario C, no hospitals in scenario D, and two hospitals in scenario E had to manage at least 20 extra patients annually. INTERPRETATION: This health service planning model can be used to to guide complex decisions about the closure of centres and inform mitigation strategies. The approach could be applied across different country or regional health-care systems for patients with cancer and other complex health conditons. FUNDING: National Institute for Health Research.

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.

Do health insurers use target marketing as a tool for risk selection? Evidence from the Netherlands.

In health care systems based on managed competition, enrolees can choose between insurers who are positioned as prudent buyers of care on their behalf. To avoid risk selection, insurers are compensated through a system of risk equalisation. The Dutch system of risk equalisation is generally considered to be one of the most sophisticated in the world. Empirical evidence, however, shows there are still consumer segments that are profitable for insurers. To examine whether insurers use target marketing for attracting these segments, we assessed promotional material used by Dutch insurers during the switching season of 2019. Our findings provide preliminary evidence that large insurers with different brands primarily use their sub brands as strategic vehicles to improve their competitive positions by targeting these brands at financially favourable groups and price sensitive buyers. By contrast, the more visible main brands are targeted at a much broader spectrum of consumer groups to display the insurer's social character. Only a minority of insurers' marketing expressions are targeted at actual users of care. Despite continuous improvements in the risk equalisation system, on average this group is still unprofitable for insurers. From a health policy perspective, further improvements are key to motivate health insurers to target their efforts at improving care for the chronically ill and to eliminate incentives for risk selection.

Cooperation amongst insurers on enhancing quality of care: precondition or substitute for competition?

In health care systems based upon managed competition, insurers are expected to negotiate with providers about price and quality of care. The Dutch experience, however, shows that quality plays a limited role in insurer-provider negotiations. It has been suggested that this is partly due to a lack of cooperation among insurers. This raises the question whether cooperation amongst insurers is a precondition or a substitute for quality-based competition. To answer this question, we mapped insurers' cooperating activities to enhance quality of care using a six-stage continuum. The first three stages (defining, designing and measuring quality indicators) may enhance competition, whereas the next three stages (setting benchmarks, steering patients and selective contracting) may reduce it. We investigated which types of insurer cooperation currently take place in the Netherlands. Additionally, we organized focus groups among insurers, providers and other stakeholders to examine their perceptions on insurer cooperation. We find that all stakeholders see advantages of cooperation amongst insurers in the first stages of the continuum and sometimes cooperate in this domain. Cooperation in the next stages is almost absent and more controversial because without adequate quality information, it is difficult to assess whether the benefits outweigh the cost associated with reduced competition.

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.

Does price deregulation in a competitive hospital market damage quality?

Regulators may be hesitant to permit price competition in healthcare markets because of its potential to damage quality. We assess whether this fear is well founded by examining a reform that permitted Dutch health insurers to freely negotiate prices with hospitals. Unlike previous research on hospital competition that has relied on quality indicators for urgent treatments, we take advantage of a plausible absence of selection bias to identify the effect on the quality of elective procedures that should be more price responsive. Using data on all admissions for hip replacements to Dutch hospitals and a difference-in-differences comparison between more and less concentrated markets, we find no evidence that price deregulation in a competitive environment reduces quality measured by hip replacement readmission rates.

Simulating the impact of centralization of prostate cancer surgery services on travel burden and equity in the English National Health Service: A national population based model for health service re-design.

INTRODUCTION: There is limited evidence on the impact of centralization of cancer treatment services on patient travel burden and access to treatment. Using prostate cancer surgery as an example, this national study analysis aims to simulate the effect of different centralization scenarios on the number of center closures, patient travel times, and equity in access. METHODS: We used patient-level data on all men (n = 19,256) undergoing radical prostatectomy in the English National Health Service between January 1, 2010 and December 31, 2014, and considered three scenarios for centralization of prostate cancer surgery services A: procedure volume, B: availability of specialized services, and C: optimization of capacity. The probability of patients travelling to each of the remaining centers in the choice set was predicted using a conditional logit model, based on preferences revealed through actual hospital selections. Multivariable linear regression analysed the impact on travel time according to patient characteristics. RESULTS: Scenarios A, B, and C resulted in the closure of 28, 24, and 37 of the 65 radical prostatectomy centers, respectively, affecting 3993 (21%), 5763 (30%), and 7896 (41%) of the men in the study. Despite similar numbers of center closures the expected average increase on travel time was very different for scenario B (+15 minutes) and A (+28 minutes). A distance minimization approach, assigning patients to their next nearest center, with patient preferences not considered, estimated a lower impact on travel burden in all scenarios. The additional travel burden on older, sicker, less affluent patients was evident, but where significant, the absolute difference was very small. CONCLUSION: The study provides an innovative simulation approach using national patient-level datasets, patient preferences based on actual hospital selections, and personal characteristics to inform health service planning. With this approach, we demonstrated for prostate cancer surgery that three different centralization scenarios would lead to similar number of center closures but to different increases in patient travel time, whilst all having a minimal impact on equity.

Price effects of a hospital merger: Heterogeneity across health insurers, hospital products, and hospital locations.

In most studies on hospital merger effects, the unit of observation is the merged hospital, whereas the observed price is the weighted average across hospital products and across payers. However, little is known about whether price effects vary between hospital locations, products, and payers. We expand existing bargaining models to allow for heterogeneous price effects and use a difference-in-differences model in which price changes at the merging hospitals are compared with price changes at comparison hospitals. We find evidence of heterogeneous price effects across health insurers, hospital products and hospital locations. These findings have implications for ex ante merger scrutiny.

Patient responsiveness to a differential deductible: empirical results from The Netherlands.

Health insurers may use financial incentives to encourage their enrollees to choose preferred providers for medical treatment. Empirical evidence whether differences in cost-sharing rates across providers affects patient choice behavior is, especially from Europe, limited. This paper examines the effect of a differential deductible to steer patient provider choice in a Dutch regional market for varicose veins treatment. Using individual patients' choice data and information about their out-of-pocket payments covering the year of the experiment and 1 year before, we estimate a conditional logit model that explicitly controls for pre-existing patient preferences. Our results suggest that in this natural experiment designating preferred providers and waiving the deductible for enrollees using these providers significantly influenced patient choice. The average cross-price elasticity of demand is found to be 0.02, indicating that patient responsiveness to the cost-sharing differential itself was low. Unlike fixed cost-sharing differences, the deductible exemption was conditional on the patient's other medical expenses occurring in the policy year. The differential deductible did, therefore, not result in a financial benefit for patients with annual costs exceeding their total deductible.

Managed competition in the Netherlands: Do insurers have incentives to steer on quality?

In health care systems based on managed competition, insurers are expected to negotiate with providers about price, quantity, and quality of care. The Dutch experience shows that this expectation may be justified with regard to price and quantity, but for quality the results are less conclusive. To examine the incentives insurers face for enhancing quality of care, we conducted in-depth interviews with CEOs and organised separate focus groups with purchasers and marketers of five Dutch health insurers. Jointly these insurers account for more than 90 percent of the market. We distinguished three categories of both positive and negative incentives to steer on quality: social, competitive and financial incentives. The overall picture emerging is that insurers are caught in a struggle between positive and negative incentives, with CEOs being more positive about the incentives to steer on quality than purchasers and marketers. At present, the social mission perceived by insurers seems to be their most important driver to invest in quality enhancement. However, whether or not the role of the social mission is sustainable in a competitive market remains unclear. Improving publicly available information on quality therefore seems to be crucially important for reinforcing the positive as well as counteracting the negative incentives insurers face with respect to enhancing quality of care.

Competition policy for health care provision in the Netherlands.

In the Netherlands in 2006 a major health care reform was introduced, aimed at reinforcing regulated competition in the health care sector. Health insurers were provided with strong incentives to compete and more room to negotiate and selectively contract with health care providers. Nevertheless, the bargaining position of health insurers vis-à-vis both GPs and hospitals is still relatively weak. GPs are very well organized in a powerful national interest association (LHV) and effectively exploit the long-standing trust relationship with their patients. They have been very successful in mobilizing public support against unfavorable contracting practices of health insurers and enforcement of the competition act. The rapid establishment of multidisciplinary care groups to coordinate care for patients with chronic diseases further strengthened their position. Due to ongoing horizontal consolidation, hospital markets in the Netherlands have become highly concentrated. Only recently the Dutch competition authority prohibited the first hospital merger. Despite the highly concentrated health insurance market, it is unclear whether insurers will have sufficient countervailing buyer power vis-à-vis GPs and hospitals to effectively fulfill their role as prudent buyer of care, as envisioned in the reform. To prevent further consolidation and anticompetitive coordination, strict enforcement of competition policy is crucially important for safeguarding the potential for effective insurer-provider negotiations about quality and price.

What health plans do people prefer? The trade-off between premium and provider choice.

Within a healthcare system with managed competition, health insurers are expected to act as prudent buyers of care on behalf of their customers. To fulfil this role adequately, understanding consumer preferences for health plan characteristics is of vital importance. Little is known, however, about these preferences and how they vary across consumers. Using a discrete choice experiment (DCE) we quantified trade-offs between basic health plan characteristics and analysed whether there are differences in preferences according to age, health status and income. We selected four health plan characteristics to be included in the DCE: (i) the level of provider choice and associated level of reimbursement, (ii) the primary focus of provider contracting (price, quality, social responsibility), (iii) the level of service benefits, and (iv) the monthly premium. This selection was based on a literature study, expert interviews and focus group discussions. The DCE consisted of 17 choice sets, each comprising two hypothetical health plan alternatives. A representative sample (n = 533) of the Dutch adult population, based on age, gender and educational level, completed the online questionnaire during the annual open enrolment period for 2015. The final model with four latent classes showed that being able to choose a care provider freely was by far the most decisive characteristic for respondents aged over 45, those with chronic conditions, and those with a gross income over €3000/month. Monthly premium was the most important choice determinant for young, healthy, and lower income respondents. We conclude that it would be very unlikely for half of the sample to opt for health plans with restricted provider choice. However, a premium discount up to €15/month by restricted health plans might motivate especially younger, healthier, and less wealthy consumers to choose these plans.

Hospital merger control in Germany, the Netherlands and England: Experiences and challenges.

Aiming at the efficiency enhancing and quality improving effects of competition, various steps have been undertaken to foster competition in hospital markets. For these mechanisms to work, robust competition policy needs to be enacted and enforced. We compare the hospital markets in Germany, the Netherlands and England regarding their experience with competition and put a special focus on merger control and the stringency of its implementation. Elaborating on the differences in merger control practice we find that despite very similar goals the respective agencies apply very different approaches and take fundamentally different routes when balancing proclaimed benefits of mergers with potential risks of consolidated markets. While the German competition authority has a strong focus on maintaining the preconditions for competition, in the Netherlands we find over the past decade a much stronger focus on hypothesized countervailing buyer power, accepting in turn highly concentrated markets. In England we find the currently most comprehensive analysis of proposed mergers in combination with a clearly positive assessment of the effects of patient choice and competition on prices and quality. All agencies are still reluctant to implement merger simulation models or similarly advanced econometric methods in their appraisal. One very likely reason is a lack of country specific empirical evidence on these matters.

Using the deductible for patient channeling: did preferred providers gain patient volume?

In market-based health care systems, channeling patients to designated preferred providers can increase payer's bargaining clout, other things being equal. In the unique setting of the new Dutch health care system with regulated competition, this paper evaluates the impact of a 1-year natural experiment with patient channeling on providers' market shares. In 2009 a large regional Dutch health insurer designated preferred providers for two different procedures (cataract surgery and varicose veins treatment) and gave its enrollees a positive financial incentive for choosing them. That is, patients were exempted from paying their deductible when they went to a preferred provider. Using claims data over the period 2007-2009, we apply a difference-in-difference approach to study the impact of this channeling strategy on the allocation of patients across individual providers. Our estimation results show that, in the year of the experiment, preferred providers of varicose veins treatment on average experienced a significant increase in patient volume relative to non-preferred providers. However, for cataract surgery no significant effect is found. Possible explanations for the observed difference between both procedures may be the insurer's selection of preferred providers and the design of the channeling incentive resulting in different expected financial benefits for both patient groups.

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.