Independent treatment centers in the Netherlands

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1 Independent treatment centers in the Netherlands Country: Netherlands Partner Institute: University of Maastricht, Department of Health Organization, Policy and Economics (BEOZ) Survey no: (11)2008 Author(s): Maarse, Hans Health Policy Issues: Role Private Sector, Quality Improvement, Others, Access, Remuneration / Payment, Responsiveness Current Process Stages Idea Pilot Policy Paper Legislation Implementation Evaluation Change Featured in half-yearly report: Health Policy Developments Abstract An important aspect of competition in health care concerns the organisation of hospital care. Competition is fostered by improving the possibilities for new providers to enter the market of hospital care. This implies a radical shift in healthcare policy, because until about 2000 it was the government's policy to discourage the entrance of new providers because there was 'plenty of capacity for specialist care'. 2. Purpose of health policy or idea Until a few years ago, the creation of independent treatment centers (ITCs), most of which can be simply described as single-specialty stand-alone centers for specialist care, was discouraged by the government, in particular by means of a very unfriendly regulatory reimbursement framework. In 1997 the then Minister of Health even considered the possibility of an emergency law to prohibit the new establishment of what were termed 'private clinics'. The situation began to change in the late 1990s and particularly the early 2000s because of the waiting list crisis. Presently, the new medical centers are considered to be an effective tool to foster competition in elective hospital care. Main objectives The main objective of the government's policy is to encourage competition in hospital care. Competition is expected and intended to reduce waiting times and to make hospital care more efficient and patient-driven. Type of incentives The incentives are twofold. To facilitate the entrance of new provider organisations for specialist care, the government revised the 1998 regulation which was very restrictive. The new centers need to be licensed but four criteria in the 1998 regulation were abolished: (a) the existence of a waiting list in the specialty area of the new center; (b) the requirement of a cooperation agreement with a nearby hospital; (c) a statement of need formulated by nearby hospitals and the dominant health insurers in the region; (d) an approval of the province in which the new center would be located. After the introduction of the 2006 Health Care Providers Permit Act (Wet Toelating Zorginstellingen) which was - 1 -

2 intended to decentralize planning and investment decisions to hospitals, the room for establishing new centers has been further widened. For instance, the new centers can now accept patients with overnight stay (which had always been strictly forbidden). The second instrument to facilitate the entrance of new provider organisations for specialist care was to introduce a more friendly funding system. The new centers can now compete with hospitals on prices. The government has selected a number of DBCs (Diagnosis Treatment Combinitions) for free price negotiations. In 2006 and 2007 they accounted for about 10% of total expenditures for hospital care. This percentage has been raised to 20 percent since January 1, Groups affected Patients (have now more options for undergoing medical care), insurers (can contract the new medical centers), providers (new options to deliver specialist care. Incumbent hospitals are exposed to increased competition) 3. Characteristics of this policy Degree of Innovation traditional innovative Degree of Controversy consensual highly controversial Structural or Systemic Impact marginal fundamental Public Visibility very low very high Transferability strongly system-dependent system-neutral My overall judgment is positive, because the new entrants will enforce hospitals and medical specialists to be more efficient and innovative and to organise specialist care in a more patient-friendly manner. 4. Political and economic background The purpose of the new arrangements is to strengthen efficiency and encourage innovation in specialist care. Another purpose is to make specialist care more patient-driven. The new arrangements reflect the liberal, market-oriented public policy of the former government. 5. Purpose and process analysis Idea Pilot Policy Paper Legislation Implementation Evaluation Change Origins of health policy idea This policy is indeed an entirely new approach. In the 1990s the government's policy was to discourage the establishment of new centers for specialist care (private clinics). The priority in hospital care was to reduce capacity and to encourage a shift from inpatient care to care in an outpatient setting. The hospital sector was also very - 2 -

3 opposed to the new centers which were accused of 'cherry picking' by their focus upon high-volume, routine care in only a few specialty areas, including ophthalmology, orthopaedic surgery, cosmetic surgery and diagnostic services. In the 1998 regulation which introduced a strict regulatory framework for licensing, the new centers were considered to be 'a necessary evil'. This picture has now radically changed. They can help to reduce waiting times, improve efficiency, increase patient-orientation and help to establish a more entrepreneurial approach in specialist care. Initiators of idea/main actors Government: The MoH is now one of the advocates of the new policy. Providers: The hospital sector seems to be somewhat divided. There are specialists and entrepreneurial hospitals which support the new development. Other hospitals are sceptical and accuse the new centers of cherry picking and unfair competition. Payers: Most insurers contract the new centers. Patients, Consumers: Patient organizations welcome the new centers because they increase their choice and make specialist care more responsive to their needs. Media: The new centers are often discussed in the media, mostly in a positive way. Others: Health Care Inspectorate has been concerned on the quality of care in some centers. Approach of idea The approach of the idea is described as: new: Actors and positions Description of actors and their positions Government Ministry of Health very supportive strongly opposed Providers Umbrella organization of hospitals very supportive strongly opposed Professional organizations of very supportive strongly opposed providers Payers Health insurers very supportive strongly opposed Patients, Consumers Patient organizations very supportive strongly opposed Media Newspapers very supportive strongly opposed Commercial websites very supportive strongly opposed Others Health care inspectorate very supportive strongly opposed Influences in policy making and legislation The most important legislative change was the introduction in 2006 of the Health Care Providers Permit Act (WTZi)

4 Legislative outcome success Actors and influence Description of actors and their influence Government Ministry of Health very strong none Providers Umbrella organization of hospitals very strong none Professional organizations of very strong none providers Payers Health insurers very strong none Patients, Consumers Patient organizations very strong none Media Newspapers very strong none Commercial websites very strong none Others Health care inspectorate very strong none Positions and Influences at a glance - 4 -

5 Dimensions of evaluation Structure Results of evaluation The main results can be summarised as follows: 1) The number of new centers has rapidly increased since Presently, the number of centers is estimated at about 180 which is twice as much as the number of general hospitals. 2) The specialist areas are (the number between brackets indicates the number of centers providing this type of specialist care): dermatology (45), ophthalmology (29), general surgery (20), orthopaedics (11), radiology (13), cardiology (10), renal dialysis 3) Most of the care delivered by these centers is elective, high volume and routine care. This type of care is also most interesting from a commercial point of view. 4) Most of the specialist services are covered by the new health insurance law. That means that each resident of the Netherlands has access to these services if their insurer has contratcted these centers. Many centers alsodeliver care for which patients must pay privately. 5) Most centers are establishedby medical specialists, often in collaboration with the hospitals they are affiliated with and a private investor company. Hospitals have also begun to set up their own centers as a kind of counter strategy. They fear to lose market share. In these cases the hospital is the majority stakeholder. 6) Most health insurers have contracted the new centers, but there are a few examples of refusing a contract by insurers. 7) The financial turnover of the services delivered by the new centers is estimated at about 1% of total expenses for hospital care. 8) In terms of human resources (personnel capacity) the new centers are quite small. Capacity ranges between less than 1 fte to 4/5 fte. 9) Specialists often work only part-time in the new centers. They continue to work in the hospital they are affiliated with. 10) Some centers have gone bankrupt or terminated their activities. 6. Expected outcome The new development may have a twofold impact upon the delivery of hospital care. First, it may lead to a greater diversity in the delivery of specialist services, which have always been concentrated in the hospitals. The impact may be a significant rise of stand-alone single specialty centers. However, a more important effect may be that these new centers which many incumbent hospitals perceive as a market threat may encourage these hospitals to reorganise the delivery of hospital care in such a way that they retain (or increase) their market share. Quite a few hospitals are now actively engaged in setting up their own centers or improving the efficiency and responsiveness of their services to survive in an ever more competitive market for specialist care. Quality of Health Care Services marginal fundamental Level of Equity system less equitable system more equitable Cost Efficiency very low very high - 5 -

6 My comments refer to the present situation. I expect a stronger impact in 5-10 years from now. The impact on cost-efficiency remains to be seen. First, there is a serious danger of overcapacity which will reduce cost-efficiency. Second, cost lowering 'here' may induce cost increases 'elsewhere'. Third, cost-efficiency may be very low because of high fixed costs. 7. References Sources of Information A. van Kollenburg. Independent treatment centres: the structue and evolution of the market in the Netherlands. Master thesis, University of Maastricht, Dutch Healthcare Authority (Nederlandse Zorgautoriteit). Monitor van Zelfstandige Behandelcentra. Utrecht, Author/s and/or contributors to this survey Maarse, Hans Suggested citation for this online article Maarse, Hans. "Independent treatment centers in the Netherlands". Health Policy Monitor, April Available at -

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