Page 27 - Effective healthcare cost containment policies Using the Netherlands as a case study - Niek W. Stadhouders

Policy options to contain healthcare costs: a review and classification
Chapter 2
Policy options to contain healthcare costs: a review and classification
Health costs tend to grow faster than the economy, leading to concerns about the sustainability of health care expenditures (Pammolli et al., 2012). High growth is not necessarily a cause for concern, since good health is highly valued (OECD, 2015b). Also, new health technologies may prove to be value for money (Cutler and McClellan, 2001; Cutler et al., 2006). However, the level of health care spending might be inefficiently high in most countries (Aaron and Ginsburg, 2009; Blumenthal et al., 2013; Joumard et al., 2010; Newhouse, 1992). The US, for example, has the highest level of health expenditures of all countries, but on average performs rather poorly on health outcomes (Murray and Frenk, 2010; Reinhardt, 2012). Some studies suggest that the level of health spending does not fully account for differences in health outcomes among OECD countries, suggesting substantial room to improve value for money (Blazquez-Fernandez et al., 2014; Xingzhu,
2.1 Introduction
2003). More importantly, the rise in health care costs might increasingly threaten the sustainability of government expenditures (Mongan et al., 2008). OECD governments spend between 19% and 45% of total public spending on health care in 2011 (OECD, 2015a). As health care is a substantial spending post for governments, increases in total health care expenditures could risk for government budget excesses. These can be resolved by containing health costs, increasing taxation (or social contributions) or cutting spending on other government items such as education or infrastructure (Di Matteo, 2010; Glied, 2008; Kane and Orszag, 2003; Kiewiet and McCubbins, 2014; Monaco and Phelps, 1995). Increasing debt levels could provide short term relief, but are not sustainable as a permanent solution to health cost growth (Chernew et al., 2010).
As a result of the global financial crisis, governments increasingly took austerity measures to lower public spending on health care (Moreno-Serra, 2014; Pisu, 2014; Ryu et al., 2013). Although health growth has slowed down since the crisis, in part because of cost containment policies, health costs growth can pick up again as the economy improves (Cuckler et al., 2013; Robson, 2001). Also, new and expensive technologies entering the market might increase expenditures (Jago, 2015; Keehan et al., 2015). As health costs are projected to continue to outpace economic growth, cost containment likely remains a pressing issue (Cuckler et al., 2013; Fuchs, 2013). Thus, targeted cost containment strategies
19