Collaboration and Competition Policy in a Market-Based Hospital System: A Case Study from the Netherlands

Abstract

In the Dutch healthcare system, provider competition is used as a tool to improve efficiency. From a competition policy perspective, little is known about how collaboration among healthcare providers contributes to overall patient welfare, and how a balance is achieved between scale benefits and preventing anti-competitive collusion. This paper examines the ex-post effects of a Dutch case study in which three competing hospitals have collaborated to provide high-complexity low-volume cancer surgery, an arrangement that tests the limits of permissibility under the Dutch cartel prohibition. Our preliminary empirical research demonstrated only a modest increase in price and travel time for some of the tumour surgeries. Volume analysis showed that the intended centralization of surgical procedures has not been fully realized. Our findings highlight the importance of a comprehensive self-assessment by the collaborating hospitals to ex-ante assess (potential) efficiencies and antitrust risks. Such self-assessments could benefit from research focused on which collaborations are most appropriate to achieve quality gains. For the ex-post assessment by competition authorities following the cartel prohibition, a more thorough insight into the (long-term) changes in hospital prices, profitability, and quality after collaboration is needed.

Measuring Active Purchasing in Healthcare: Analysing Reallocations of Funds Between Providers to Evaluate Purchasing Systems Performance in the Netherlands

“…Potential explanations include selective contracting having limited impact on patient flows, 51 with insurers required to (partially) reimburse noncontracted care, 17 hospitals levering market power to compensate reductions in income, 52 hospitals shifting costs between insurers as a response to selective contracting, 53 or insurers using selective contracting to concentrate care symmetrically between providers without affecting total expenditures. 54 In theory, selective contracting could even steer patients towards high-quality providers without affecting total provider expenditures, for example if prices adjust downwards to compensate increases in the number of patients. Additional studies on the correlation between active purchasing (eg, selective contracting) and quality measures could further elucidate the role of active purchasing in stimulating market efficiency.…”

“…In theory, concentration efforts could be reciprocal between providers, resulting in improved efficiency without budgetary changes. 54 This would cause the MAI to underestimate active purchasing. Ideally, detailed data on provider expenditures per location and per payer would allow us to test these alternative explanations, but collecting these detailed data is an area for future research.…”

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

“…Organisations that collaborate are obliged to self‐assess whether their collaboration falls under the scope of the Cartel Prohibition and, if their collaboration is (potentially) anticompetitive, whether the exemption criteria are met—that is, that the benefits for patients or clients outweigh the anti‐competitive drawbacks. When relevant, healthcare organisations need to substantiate the intended efficiencies convincingly 48 …”

“…In the Netherlands, for example, it has been suggested that market sharing or centralisation agreements should be allowed in order to facilitate collaboration as an alternative to mergers for specific types of highly complex hospital care 65 ,. 48,65 The Dutch competition authority also accepts collaboration as long as certain conditions are met, for instance as part of the ‘ Juiste Zorg op de Juiste Plaats ’ policy plan (Right Care in the Right Place, JZOJP ), which aims to reduce the cost of expensive care by moving the point of care delivery closer to people's homes and replacing care delivery with other forms such as e‐health 66 . In the UK, the Competition and Markets Authority (CMA) has also recognised and emphasised the need for more collaboration between providers and the reduction of the legal provision of competition 67…”

Fusietoetsing in de zorg: een terug- en vooruitblik

“…Voor een goede beoordeling van dergelijke afspraken dient de ACM dan wel vanuit het patiëntperspectief een integrale afweging te maken. 41 Alleen zo kan duidelijk worden of de kwaliteitsvoordelen van concentratie in voldoende mate opwegen tegen de potentiële nadelen ervan, in de vorm van extra reistijd 42 en minder concurrentie tussen ziekenhuizen onderling. 43…”