Page 195 - Effective healthcare cost containment policies Using the Netherlands as a case study - Niek W. Stadhouders

General Discussion The equilibriums are combined to obtain the following multi-equilibrium equation:
The total budget is the sum of all provider budgets is the sum of the outcome of provider- payer negotiations is the sum of the reimbursement income per provider is the sum of provider expenditure is the sum of patient demand times treatment intensity times the reimbursement rate. If a policy reduces the outcome of one of the equations, all other equations have to adjust. Table 8.2 lists the response options per equilibrium.
The combined model
Equation Description Response options to a budget reduction Provider budget 1) provider budget reduction
Table 8.2: Partial equilibriums and response options to a reduction in the total budget
equilibrium 2) number of provider reduction
Bargaining 1) reduce purchaser bargaining surplus equilibrium 2) increase provider bargaining surplus
Provider income 1) lower patient numbers equilibrium 2) lower treatment intensity
3) lower reimbursement rate Provider expenses 1) reduce personnel
equilibrium
2) reduce capital investments 3) reduce inputs
A further inquiry into reductions in the demand for care
4) reduce profits
Demand equilibrium 1) demand reduction (=waiting lists
increase)
2) treatment intensity reduction 3) reimbursement rate reduction
Many cost containment policies aim to reduce the demand for care, for example, increased cost sharing, prevention, benefit package restrictions and health education. Earlier it was mentioned that the demand for care depends on care needs and copayments, but that these are not perfectly correlated to the true health status of the population. If people would be able to perfectly assess their health status, then cost sharing, for example, would reduce the desire to seek care of people that at the margin have the highest health status. This would imply an efficient outcome. However, in reality we observe that increased cost sharing also deters people with low health status, which would imply an inefficient outcome, which must mean that people cannot perfectly assess their health status. To formalise the argument, I
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