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From the mid-1990s several countries have introduced elements of the model of regulated competition in healthcare. In 2012 we assessed the extent to which in five countries ten important preconditions for achieving efficiency and affordability in competitive healthcare markets were fulfilled. In this paper we assess to what extent the fulfilment of these preconditions has changed ten years later. In 2022, as in 2012, in none of the five countries all preconditions are completely fulfilled. In the period 2012-2022 on balance there have been some improvements in the fulfillment of the preconditions, although to a different extent in the five countries. The only preconditions that were improved in most countries were 'consumer information and transparency' and 'cross-subsidies without incentives for risk selection'. On balance the Netherlands and Switzerland made most progress in the number of better fulfilled preconditions. For Belgium these preconditions no longer seem relevant because the idea of regulated competition has been completely abandoned. In Germany, Israel and Switzerland, the preconditions 'effective competition policy' and 'contestability of the markets' are not sufficiently fulfilled in 2022, just as in 2012. In Germany and Switzerland this also holds for the precondition 'freedom to contract and integrate'. Overall, the progress towards realizing the preconditions has been limited., Competing Interests: Declarations of competing interest None., (Copyright © 2024 The Author(s). Published by Elsevier B.V. All rights reserved.)

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., (Copyright © 2020 Elsevier B.V. All rights reserved.)

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 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.

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.

Health care reforms in several European countries provide health insurers with incentives and tools to become prudent purchasers of health care. The potential success of this strategy crucially depends on insurers' bargaining leverage vis-à-vis health care providers. An important determinant of insurers' bargaining power is the willingness of consumers to consider alternative providers. In this paper we examine to what extent consumers are willing to switch hospitals when they are fully covered for hospital services, which is typical for many European countries. Since prices do not matter to these patients, we estimate time-elasticities to assess hospital substitutability. Using data from a large Dutch health insurer on non-emergency neurosurgical outpatient hospital visits in 2003, we estimate a conditional logit model of patient hospital choice taking both patient heterogeneity and hospital characteristics into account. We use the parameter estimates to simulate the demand effect of an artificial increase in travel time by 10% for every patient, holding all other hospital attributes constant. Overall, the resulting point estimates of hospitals' time-elasticities are fairly high, although variation is substantial (-2.6 to -1.4). Sensitivity tests reveal that these estimates are very robust and differ significantly across individual hospitals. This implies that all hospitals in our study sample have at least one close substitute which is an important precondition for effective hospital competition.

Purpose: To analyse the development of pharmaceutical policy in the Dutch market for outpatient prescription drugs since the early 1990s., Methodology: A literature review and document analysis is performed to examine the effects of pharmaceutical policy on the performance of the Dutch market for outpatient prescription drugs since the early 1990s., Findings: Government efforts to control prices of pharmaceuticals were effective in constraining prices of in-patent drugs, but had an opposite effect on the prices of generic drugs. The gradual transition towards managed competition--that particularly gained momentum after the introduction of the new universal health insurance scheme in 2006--appears to be more effective in constraining prices of generic drugs than earlier government efforts to control these prices., Originality: Comparative analysis of the impact of price regulation and managed competition on generic drug prices in the Netherlands., Implications: Implications of the changing role of health insurers are discussed for the future market for prescription drugs and role of pharmacies in the Netherlands.

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.

We examine the impact of price, service quality and information search on people's propensity to switch health insurers in the competitive Dutch health insurance market. Using panel data from annual household surveys and data on health insurers' premiums and quality ratings over the period 2006-2012, we estimate a random effects logit model of people's switching decisions. We find that switching propensities depend on health plan price and quality, and on people's age, health, education and having supplementary or group insurance. Young people (18-35 years) are more sensitive to price, whereas older people are more sensitive to quality. Searching for health plan information has a much stronger impact on peoples' sensitivity to price than to service quality. In addition, searching for health plan information has a stronger impact on the switching propensity of higher than lower educated people, suggesting that higher educated people make better use of available health plan information. Finally, having supplementary insurance significantly reduces older people's switching propensity. [ABSTRACT FROM AUTHOR]

Abstract: A necessary condition for competition to promote quality in hospital markets is that patients are sensitive to differences in hospital quality. In this paper we examine the relationship between hospital quality, as measured by publicly available quality ratings, and patient hospital choice for angioplasty using individual claims data from a large health insurer. We find that Dutch patients have a high propensity to choose hospitals with a good reputation, both overall and for cardiology, and a low readmission rate after treatment for heart failure. Relative to a mean readmission rate of 8.5% we find that a 1%-point lower readmission rate is associated with a 12% increase in hospital demand. Since readmission rates are not adjusted for case-mix they may not provide a correct signal of hospital quality. Insofar patients base their hospital choice on such imperfect quality information, this may result in suboptimal choices and risk selection by hospitals. [Copyright &y& Elsevier]

A competitive market for individual health insurance tends to risk-adjusted premiums. Premium rate restrictions are often considered a tool to increase access to coverage for high-risk individuals in such a market. However, such regulation induces selection which may have several adverse effects. As an alternative approach we consider risk-adjusted premium subsidies. Empirical results of simulated premium models and subsidy formulae are presented. It is shown that sufficiently adjusted subsidies eliminate the need for premium rate restrictions and consequently avoid their adverse effects. Therefore, the subsidy approach is the preferred strategy to increase access to coverage for high-risk individuals. [ABSTRACT FROM AUTHOR]