tbmquarterlyv34eng2010dec
faculty of technology, policy and management
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Viii/4 13 12 2010
Q
Market forces in health care:
A subtle operation
Adrie Dumaij, Jos Blank
market forces in the healthcare sector are a difficult
issue. Jos Blank and adrie dumaij of the section
for innovation and public Sector efficiency (ipSe)
Studies immerse themselves in the subject on a
daily basis, but without taking up any particular
position. “the symptoms are varied and complex,
so we prefer to give a more subtle picture.”
Together with their colleagues, Blank and Dumaij conduct
research into productivity issues in the public sector, with a
particular focus on healthcare. They are currently very much in
demand. “A lot of our work is on behalf of the government, the
Ministry of Health, Welfare and Sport, the Ministry of Education,
Culture and Science, the Council for Public Health and Health
Care, and the NVZ Dutch Hospitals Association, but also the
Flemish government, for example. Many issues affect government
and policy, such as financial systems and planning systems. This
also covers market forces: will they work in the way that we think
they will, and what conditions should be attached, if they are
introduced?”
IPSE Studies has carried out various research projects into how
the healthcare sector functions. An example of such a project
is the Flemish hospitals planning instrument, on behalf of the
Flemish health and care agency. This concerns a scientifically
supported recommendation about possible instruments to be used
for programming and planning the provision of care in hospitals.
Blank: “The key question is how the supply of hospital care can be
matched as closely as possible to demand, with special attention
for basic care, rehabilitation, and radiotherapy. This calls for a
balance to be made between different, sometimes contradictory,
criteria. Examples include the costs and quality of services, the
required level of expertise, the optimal level of activity, and
accessibility. There is a conflict between an optimal scale from the
point of view of cost, minimal scale requirements from the point
of view of quality, and as short as possible travelling times for
patients.” The issue of planning for expensive infrastructure in the
healthcare sector will undoubtedly play an important part in the
Netherlands. The possibility cannot be excluded that, under the
pressure of market forces, an overcapacity of infrastructure will
arise.
This is also determined, in part, by management culture. Blank:
“By way of illustration, Flemish managers have a tendency
to consent to investment applications fairly readily, so that
radiotherapy, for example, is provided at far too small (and
therefore costly) a scale. So you therefore have to determine
when this is needed, and also take accessibility into account,
for example. We have developed a model for this, that describes
the relationship between demand for healthcare and an optimal
distribution of hospital facilities. The model is being applied to
Flemish hospitals, but it can also be used in the Netherlands.”
“If you have to undergo an
operation, then you often do
not know what to expect - which
doctors are good at that particular
operation, and what alternatives
are available..”
Voting with their feet
Market forces will only really come into their own when patients
can vote with their feet: if they are not happy with a particular
location, they can go somewhere else next time, where the
standard of care is better. This means, however, that patients
have to know where good (and poor) standards of care are
available. Dumaij: “There is a major information deficit among
patients. By way of example, if your healthy leg is amputated
during an operation, then of course you know that something
has gone wrong. But in the vast majority of cases, you do not
know if anything has gone wrong. So the need for product
information in advance is considerable. If you drink milk from
a cup, then you know exactly what to expect. But if you have
to undergo an operation, then you often do not know what to
expect – which doctors are good at that particular operation,
and what alternatives are available – even though it is precisely
these conditions that are so important for market forces to work
successfully in the healthcare sector.”
Apart from the lack of information, a major problem is that
patients have few disincentives from using healthcare services
extensively: they perceive healthcare as a free service. There
is also the question of whether there is sufficient competition
on the hospital market, which is actually more like a series of
local monopolies and cartels of medical specialists. “We attempt
to correct aspects like this in our studies. We try to obtain an
objective ranking in terms of productivity of care institutions,
for example. Why is one better than another? Is it because the
available resources are better used? Or perhaps the management
uses its tools more effectively? Whatever it is, our aim is to learn
from it and publish it so that policymakers are better placed to do
their job.”
IPSE Studies also examines the systems used in the diagnosistreatment
combination similar to the Diagnosis Related Group
payment system in the USA (abbreviated in Dutch as DBC).
Some 30,000 product definitions are used in this system, with
each treatment having its own code and cost. This leads to
enormous administrative burdens and also encourages fraud.
This information has now reached the powers-that-be in The
Hague, and a new system is currently being developed - DOT
(which stands for ‘the road to transparency in DBC’) - the aim of
which is to reduce the number of product definitions to 3,500.
“But even that is still far too many,” says Blank. What is needed
continued on page 2
Publitas e-Publisher Nederland
Publitas e-Publisher International
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