Page 17 - Effective healthcare cost containment policies Using the Netherlands as a case study - Niek W. Stadhouders

response to hospital cost containment, increasing costs there. Similarly, patient treatment costs may signal increased efficiency, but if hospitals respond to patient cost savings by increasing treatment intensity in other patient groups, it does not translate into effective public or total cost containment. Therefore, in this thesis effective cost containment is defined as containment of public or total healthcare costs.
Containment of total spending affects processes at different levels, from the government to purchasers, to providers, to health professionals and patients. Efficient and effective cost containment results in lower cost at all levels while retaining or improving quality, as illustrated by a stylized model in figure 1.3. In the model, cost containment is considered primarily a top-down process. The government sets spending limits, while purchasers impose spending limits onto providers, who steer health professionals to remain within their budgets. Conversely, quality improvement is considered predominantly a bottom-up process: starting with the wishes and needs of the patient (person), health professionals are expected to improve quality of care. In turn, high-quality providers should be stimulated through purchasing, which provides additional incentives for providers to improve quality. Evidently, governments should be involved with quality improvement, while recognising the limited effectiveness of top-down quality regulation. To improve health on a population level while containing costs, governments employ policies to safeguard and incentivise these processes, targeting all layers and agents.
1.5. Cost containment and quality improvement: a conceptual model
Governments have a primary responsibility for cost containment on a macro level, in deciding what the optimal level of health costs should be from a societal point of view and setting spending limits accordingly. In the Netherlands, healthcare is prospectively budgeted at the start of the cabinet, and since 2012, additional spending limits are enforced through sector agreements. Concurrently, the government transfers responsibility for
General Introduction
Cost containment and efficiency are related but separate government goals. In this thesis, efficiency refers to the relation between cost and quality. A reduction in costs at the same or higher level of quality is considered to increase health system efficiency, as is an improvement in quality at the same or lower level of costs (Weinstein and Stason, 1977). If an intervention greatly improves quality but slightly increases costs, efficiency is improved, but cost containment is not obtained (Moreno-Serra, 2014). Similarly, cost containment may reduce efficiency if quality sharply declines. Effective and efficient cost containment therefore is defined as containing costs while retaining or increasing efficiency, i.e. quality. The next section discusses the relation between cost containment, quality improvements and efficiency in more detail.
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