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Bismarckian health systems are mainly governed by social health insurers, but their role, status, and power vary across countries and over time. We compare the role of health insurers in three distinct social health insurance systems in improving health systems' efficiency. In France, insurers work together as a single payer within a highly regulated context. Although this gives insurers substantial bargaining power, collective negotiations with providers are highly political and do not provide appropriate incentives for efficiency. Both Germany and the Netherlands have introduced competition among insurers to foster efficiency. However, the rationale of insurer competition in Germany is unclear because contracts are mostly concluded at a collective level and individual insurers have little power to influence health system efficiency. In the Netherlands, insurer competition is substantially more effective, but primarily focused on price and cost containment. In all three countries, the role of insurers has been transforming slowly to respond to common challenges of assuring care quality and continuity for an ageing population. To assure sustainability, they need to ensure that care providers cooperate with the same quality and efficiency objectives, but their capacity to do so has been limited by insufficient support to enforce public information on provider quality.

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.

Worldwide, policymakers and purchasers are exploring innovative provider payment strategies promoting value in health care, known as value-based payments (VBP). What is meant by 'value', however, is often unclear and the relationship between value and the payment design is not explicated. This paper aims at: (1) identifying value dimensions that are ideally stimulated by VBP and (2) constructing a framework of a theoretically preferred VBP design. Based on a synthesis of both theoretical and empirical studies on payment incentives, we conclude that VBP should consist of two components: a relatively large base payment that implicitly stimulates value and a relatively small payment that explicitly rewards measurable aspects of value (pay-for-performance). Being the largest component, the base payment design is essential, but often neglected when it comes to VBP reform. We explain that this base payment ideally (1) is paid to a multidisciplinary provider group (2) for a cohesive set of care activities for a predefined population, (3) is fixed, (4) is adjusted for the population's risk profile and (5) includes risk-mitigating measures. Finally, some important trade-offs in the practical operationalisation of VBP are discussed.

For almost a century, the Netherlands was marked by a large market for voluntary private health insurance alongside state-regulated social health insurance. Throughout this period, private health insurers tried to safeguard their position within an expanding welfare state. From an institutional logics perspective, we analyze how private health insurers tried to reconcile the tension between a competitive insurance market pressuring for selective underwriting and actuarially fair premiums (the insurance logic), and an upcoming welfare state pressuring for universal access and socially fair premiums (the welfare state logic). Based on primary sources and the extant historiography, we distinguish six periods in which the balance between both logics changed significantly. We identify various strategies employed by private insurers to reconcile the competing logics. Some of these were temporarily successful, but required measures that were incompatible with the idea of free entrepreneurship and consumer choice. We conclude that universal access can only be achieved in a competitive individual private health insurance market if this market is effectively regulated and mandatory cross-subsidies are effectively enforced. The Dutch case demonstrates that achieving universal access in a competitive private health insurance market is institutionally complex and requires broad political and societal support.

In several OECD countries the percentage of elderly in long-term care institutions has been declining as a result of ageing-in-place. However, due to the rapid ageing of population in the next decades future demand for institutional care is likely to increase. In this paper we perform a scenario analysis to examine the potential impact of these two opposite trends on the demand for institutional elderly care in the Netherlands. We find that the demand for institutional care first declines as a result of the expected increase in the number of low-need elderly that age-in-place. This effect is strong at first but then peters out. After this first period the effect of the demographic trend takes over, resulting in an increase in demand for institutional care. We argue that the observed trends are likely to result in a growing mismatch between demand and supply of institutional care. Whereas the current stock of institutional care is primarily focussed on low-need (residential) care, future demand will increasingly consist of high-need (nursing home) care for people with cognitive as well as somatic disabilities. We discuss several policy options to reduce the expected mismatch between supply and demand for institutional care.

In markets where hospitals are expected to compete, preventive merger control aims to prohibit anticompetitive mergers. In the hospital industry, however, the standard method for defining the relevant market (SSNIP) is difficult to apply and alternative approaches have proven inaccurate. Experiences from the United States show that courts, by identifying overly broad geographic markets, have underestimated the anticompetitive effects of hospital mergers. We examine how geographic hospital markets are defined in Germany and the Netherlands where market-oriented reforms have created room for hospital competition. For each country, we discuss a landmark case where definition of the geographic market played a decisive role. Our findings indicate that defining geographic hospital markets in both countries is less complicated than in the United States, where antitrust analysis must take managed care organisations into account. We also find that different methods result in much more stringent hospital merger control in Germany than in the Netherlands. Given the uncertainties in defining hospital markets, the German competition authority seems to be inclined to avoid the risk of being too permissive; the opposite holds for the Dutch competition authority. We argue that for society the costs of being too permissive with regard to hospital mergers may be larger than the costs of being too stringent.

We investigate the impact of the transition towards managed competition in the Dutch health care system on health insurers' contracting behaviour. Specifically, we examine whether insurers have been able to take up their role as prudent buyers of care and examine consumers' attitudes towards insurers' new role. Health insurers' contracting behaviour is investigated by an extensive analysis of available information on purchasing practices by health insurers and by interviews with directors of health care purchasing of the four major health insurers, accounting for 90% of the market. Consumer attitudes towards insurers' new role are investigated by surveys among a representative sample of enrollees over the period 2005-2009. During the first four years of the reform, health insurers were very reluctant to engage in selective contracting and preferred to use 'soft' positive incentives to encourage preferred provider choice rather than engaging in restrictive managed care activities. Consumer attitudes towards channelling vary considerably by type of provider but generally became more negative in the first two years after the reform. Insurers' reluctance to use selective contracting can be at least partly explained by the presence of a credible-commitment problem. Consumers do not trust that insurers with restrictive networks are committed to provide good quality care. The credible-commitment problem seems to be particularly relevant to the Netherlands, since Dutch enrollees are not used to restrictions on provider choice. Since consumers are quite sensitive to differences in provider quality, more reliable information about provider quality is required to reduce the credible-commitment problem.

In 2006, the Dutch health insurance system was radically reformed to strengthen competition among health insurers as purchasers of health services. This article considers whether purchaser competition has improved efficiency in health-care provision. Although supply and price regulation still dominates the allocation of health services, purchaser competition has already significantly affected the provision of hospital care, pharmaceuticals and primary care, as well as efforts to gather and disseminate information about quality of care. From this perspective, the glass is half full. However, based on the crude performance indicators available, the reforms have not yet demonstrated significant effects on the performance of the Dutch health system. From this perspective the glass is half empty. The article concludes that the effectiveness of purchaser competition depends crucially on the success of ongoing efforts to improve performance indicators, product classification and the risk equalisation scheme.

Effective antitrust enforcement is of crucial importance for countries with a market-based health care system in which hospitals are expected to compete. Assessing hospital market power--a central issue to competition policy--is, however, complicated because the presence of third party payers and the general unobservability of prices make it difficult to apply the standard methods of market definition. Alternative, less formal methods historically employed in the hospital industry have proven inaccurate; these methods were even called inapplicable in a recent US court decision. In this paper, we discuss the strengths and weaknesses of several new approaches to defining hospital markets that are suggested in the recent economic literature. In particular, we discuss the applicability of the time-elasticity approach, competitor-share approach, and option-demand approach to the recently partly deregulated Dutch hospital market. We conclude that the appropriate approach depends crucially on how health insurers contract with hospitals and how patients select their hospital.