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Stadhouders and colleagues' new measure answers an important question: do strategic purchasing and managed competition redirect health care resources, and, if so, when, how, and to what? Applying it to the Netherlands, they find that they do not. This commentary first examines logical problems in arguments for strategic purchasing and managed competition, and then briefly reviews other evidence of their very limited success from, in particular, the Netherlands and England. It then raises the question of why strategic purchasing and managed competition continue to be advocated despite the poor logic of the arguments behind them and substantial evidence that they do not work.

Many current policies and approaches to performance measurement and payment reform focus on individual providers; they risk reinforcing the fragmented care and lack of coordination experienced by patients with serious illness. In this paper we show that Medicare beneficiaries receive most of their care from relatively coherent local delivery systems comprising physicians and the hospitals where they work or admit their patients. Efforts to create accountable care organizations at this level--the extended hospital medical staff--deserve consideration as a potential means of improving the quality and lowering the cost of care.

Background In a health care system based on managed competition it is important that health insurers are able to channel their enrolees to preferred care providers. However, enrolees are often very negative about financial incentives and any limitations in their choice of care provider. Therefore, a Dutch health insurance company conducted an experiment to study the effectiveness of a new method of channelling their enrolees. This method entails giving enrolees advise on which physiotherapists to choose when they call customer service. Offering this advice as an extra service is supposed to improve service quality ratings. Objective of this study is to evaluate this channelling method on effectiveness and the impact on service quality ratings. Methods In this experiment, one of the health insurer’s customer service call teams (pilot team) began advising enrolees on their choice of physiotherapist. Three data sources were used. Firstly, all enrolees who called customer service received an online questionnaire in order to measure their evaluation of the quality of service. Enrolees who were offered advice received a slightly different questionnaire which, in addition, asked about whether they intended to follow the advice they were offered. Multilevel regression analysis was conducted to analyse the difference in service quality ratings between the pilot team and two comparable customer service teams before and after the implementation of the channelling method. Secondly, employees logged each call, registering, if they offered advice, whether the enrolee accepted it, and if so, which care provider was advised. Thirdly, data from the insurance claims were used to see if enrolees visited the recommended physiotherapist. Results The results of the questionnaire show that enrolees responded favorably to being offered advice on the choice of physiotherapist. Furthermore, 45% of enrolees who received advice and then went on to visit a care provider, followed the advice. The service quality ratings were higher compared to control groups. However, it could not be determined whether this effect was entirely due to the intervention. Conclusions Channelling enrolees towards preferred care providers by offering advice on their choice of care provider when they call customer service is successful. The effect on service quality seems positive, although a causal relationship could not be determined.

This commentary discusses the study by Stadhouders et al., which analyzes budget reallocations among Dutch healthcare providers as a result of one form of active purchasing. The study assumes that healthcare purchasers aim to shift substantial funds from inefficient to efficient providers, yet finds little evidence of such shifts. This commentary explains more explicitly why substantial volume shifts are not and should not be a major factor in the Dutch context, citing factors such as the scarcity of underperforming providers, strong regional dependencies, data quality limitations, and patient reluctance to change provider. More promising avenues for active purchasing include fostering active collaboration and improving contractual arrangements.

This article comments on the paper by Stadhouders, Koolman, Tanke, Maarse and Jeurissen titled Measuring Active Purchasing in Healthcare: Analysing Reallocations of Funds Between Providers to Evaluate Purchasing Systems Performance in the Netherlands. Its main aim is to respond to the fact that the paper, without discussion, assumes that competitive reform stimulates the efficient allocation of funds. To achieve this goal, this article discusses existing knowledge related to the author’s assumption, highlighting that there is no uniform theory regarding the capacity of market forces to regulate healthcare markets. It also argues that market-based healthcare reforms may be very risky in countries with limited state regulatory capacity and widespread corruption.

On January 1, 2006, the Dutch government enacted the Health Insurance Act, under which every person who legally lives or works in the Netherlands is obliged to buy, from a private insurance company, individual health insurance whose benefits are specified by law. Alain Enthoven and Wynand van de Ven write that this kind of model would be well suited to the United States. Twenty-five years ago, the health care system of the Netherlands was operating under top-down cost-containment policies, such as regulation of doctors' fees and hospital budgets, that were widely criticized for lacking incentives for efficiency and innovation. In 1986, the Dekker Committee, an independent group appointed by the Dutch government to seek a solution, recommended market-oriented reform within the context of a national health insurance system. But before the concept could be implemented, a host of adequate systems had to be developed — systems of risk equalization, of product classification and medical pricing to give providers appropriate incentives for efficiency, of . . .

Background Since 2006, business principles have been introduced to foster efficient healthcare by way of managed competition. Managed competition is expressed by a contract between a health insurer and a physiotherapy primary healthcare organisation (PTPHO). In such a managed environment, PTPHOs have to attain treatment service quality and financial PTPHO-centred outcomes Research shows that business model designs may enhance organisation-centred outcomes. A business model is a design (efficiency or novelty) of how a firm transacts with customers, partners, and vendors; how it connects with markets. However, research on managed competition contract and business model designs, in relation to PTPHO-centred outcomes is new to the healthcare literature. PTPHOs may not know how business model designs enhance outcomes. This study aims to delineate the relations between business model efficiency and novelty, and PTPHO-centred outcomes, while accounting for managed competition contract in Dutch healthcare. Methods A quantitative cross-sectional design was adopted. Using a questionnaire, the relations between managed competition, business model efficiency and novelty, and PTPHO-centred outcomes were investigated among PTPHO managers ( n  = 138). Theory-based expectations were set up and multiple linear regression analyses were applied. Results Managed competition and business model efficiency show no relation with PTPHO-centred outcomes. Moderation of the business model efficiency and PTPHO-centred outcomes relation by managed competition contract is not detected. Business model novelty shows a positive relation with PTPHO-centred outcomes. Moderation of the business model novelty and PTPHO-centred outcomes relation by managed competition contract is found. Conclusions There seem to be positive relations between business model novelty and PTPHO-centred outcomes on its own and moderated by managed competition contract. No relations seem to exist with business model efficiency. This implies that the combination of persistent use of health insurer-driven managed competition contracts and a naturally efficient PTPHOs may have left too few means for these organisations to contribute to healthcare reforms and attain PTPHO-centred outcomes. Organisation-driven innovation could stretch system-level regulations and provide room for new business models. Optimising contracts towards organisation-driven healthcare reform, including novelty requirements and corresponding reimbursements is suggested. PTPHO managers may want to shift their attitudes towards novel business models.

In the Dutch health care system, health insurers negotiate with hospitals about the pricing of hospital products in a managed competition framework. In this paper, we study these contract prices that became for the first time publicly available in 2016. The data show substantive price variation between hospitals for the same products, and within a hospital for the same product across insurers. About 27% of the contract prices for a hospital product are at least 20% higher or lower than the average contract price in the market. For about half of the products, the highest and the lowest contract prices across hospitals differ by a factor of three or more. Moreover, hospital product prices do not follow a consistent ranking across hospitals, suggesting substantial cross-subsidization between hospital products. Potential explanations for the large and seemingly random price variation are: (i) different cost pricing methods used by hospitals, (ii) uncertainty due to frequent changes in the hospital payment system, (iii) price adjustments related to negotiated lumpsum payments and (iv) differences in hospital and insurer market power. Several policy options are discussed to reduce variation and increase transparency of hospital prices.

The Medicare Physician Group Practice (PGP) demonstration project was the model for health care reform's accountable care organizations. Results from the fourth year of the PGP project were recently reported by the Department of Health and Human Services. One of the few major provisions of the Affordable Care Act (ACA) with solid bipartisan support establishes a new delivery model: the accountable care organization (ACO). Congress directed the Department of Health and Human Services (DHHS) to develop an ACO program to improve the quality of care provided to Medicare beneficiaries and reduce its costs while retaining fee-for-service payment. Under this program, medical groups would have to take responsibility for achieving these goals and would share in any savings derived by Medicare. Despite the burst of interest in ACOs, little attention has been paid to the results of a demonstration . . .

Moral hazard in public insurance for long-term care may be counteracted by strategies influencing supply or demand. Demand-side strategies may target the patient or the insurer. Various demand-side strategies and how they are implemented in four European countries (Germany, Belgium, Switzerland and the Netherlands) are described, highlighting the pros and cons of each strategy. Patient-oriented strategies to counteract moral hazard are used in all four countries but their impact on efficiency is unclear and crucially depends on their design. Strategies targeted at insurers are much less popular: Belgium and Switzerland have introduced elements of managed competition for some types of long-term care, as has the Netherlands in 2015. As only some elements of managed competition have been introduced, it is unclear whether it improves efficiency. Its effect will depend on the feasibility of setting appropriate financial incentives for insurers using risk equalization and the willingness of governments to provide insurers with instruments to manage long-term care.