Rijtjes healthcare purchasing - lecture 4

IZA goal

Shift away from purely market-based competition towards more cooperative and coordinated healthcare environment

IZA agreements on:

• Health expenditure

• Appropriate care + focus on prevention

• Concentration of specialized care

• Regional provider networks

• Care pathways

Which purchasing tools are used by ZK

• Selective contracting (but low take-up)

• Financial incentive for patients to use preferred providers (elective care in specific hospital + only specific drugs)

• Clinical guidelines and protocols

• Measuring care efficiency of hospitals

Types of care contracts

• Contract sum (global budget)

• Expenditure ceiling (closed-ended cost-per-case)

• Subsequent calculation (open-ended cost-per-case)

Insurer incentives to steer on quality - license to operate

+social mission

+legal obligation

-legal hurdles (legal restrictions on selective contracting)

Insurer incentives to steer on quality - competitive advantage

+consumer preferences

+employer preferences

-lack of transparency (information on quality is often missing)

-patients insensitivity to steering on quality (limited influence cause often referred by GP)

Insurer incentives to steer on quality - financial results

+positive business case (improving quality to avoid costs)

-negative business case (will result in higher premium)

Examples of value based purchasing

• Pay for performance

• Bundled payments

Why is value based purchasing not regularly used (Steinmann)

• Lack of legitimacy (insurers can’t judge quality → professional self-regulation)

• Misleading prices (negotiations still mainly about the total budget)

• Consensual constraints (e.g. IZA restricts freedom to negotiate fully independently)

• Restricted market (insurers feel responsible for financial survival of hospitals)