Page 176 - Effective healthcare cost containment policies Using the Netherlands as a case study - Niek W. Stadhouders

Chapter 8
(Wijne, 2013). Overall, medical liability is considered to be a relatively minor issue in cost containment, and tort reform is unlikely to contribute substantially to cost containment in the Netherlands (Laarman and Akkermans, 2018).
Although many cost containment policy options have been documented, it has proven to be rather difficult to contain the costs of health care. Few policies have been evaluated, and most policies show mixed or conflicting results. Several explanations could be given, relating to the methodological challenges in identifying and researching causal effects. However, it is perhaps simply difficult to contain costs in general. The healthcare system is comprised of many stakeholders, who all interact and respond to policies in ways that are difficult to predict. Policies designed to contain costs may therefore not actually achieve their goals, as the health system is likely to mitigate effects of cost containment policies (Burns and Pauly, 2018; Evans et al., 1989; Lomas et al., 1989). To contain costs effectively, governments need to anticipate these responses. Appendix 7.1 presents an equilibrium model to this aim, defining four equilibriums in the health sector:
8.3.2 Inquiry into health system responses to cost containment policies
1. The provider market equilibrium, where total spending equals all budgets of all providers;
2. The provider budget equilibrium, where provider income equals expenses;
3. The bargaining equilibrium, where providers and purchasers negotiate prices and
volumes;
4. The patient market equilibrium, where the demand for care equals the supply of
care.
This multiple-equilibrium system helps explain why cost containment policy proves to be difficult: policies that affect one of the equilibriums have implications on the others. Furthermore, the model helps predict how providers and patients will respond to cost containment policies.
The provider market equilibrium states that total spending equals the sum of all provider budgets. In order to contain total costs, both the number of providers and the budget per provider must be contained. Solely restricting the number of providers may invoke increases in the budgets of remaining providers, while only restricting provider budgets may induce new providers to accommodate excess demand. The provider budget equilibrium states that the budget is the sum of the number of patients, treatment intensity and reimbursement rates. Any reduction in a provider budget involves containing the number of patients, treatment intensity and reimbursements. For example, only reducing the number of patients or the reimbursement rate may be counteracted by an increase in
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