Competition policy for health care provision in the Netherlands

Abstract

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.

Keywords: Competition policy; General practitioners; Hospitals; Regulated competition.