Hospital Competition in the Netherlands

An Empirical Investigation

Carolien Berden, R. Croes, R. Kemp, Misja Mikkers, Rob van der Noll, V. Shestalova, Jan Svitak

Research output: Working paperDiscussion paperOther research output

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Abstract

The Dutch government introduced managed competition to the health care sec-
tor in 2006. In this regulatory framework insurers compete for enrollees and
providers compete for contracts with insurers. The resulting contracts are de-
termined by bargaining, which outcome depends on the relative position of the
provider. In this paper, we compare how commonly used market power indi-
cators predict bargaining outcomes. We combine 2013 transaction data with
bilateral contract data. Our empirical models explain the relative dierences in
hospitals' revenues while controlling for dierences in the complexity of patients.
Four indicators are used: the logit competition index (LOCI), willingness-to-pay
(WTP), Elzinga-Hogarty market share and a rule-of-thumb market share. We
nd that WTP and LOCI perform best empirically.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages31
Volume2019-018
Publication statusPublished - 20 May 2019

Publication series

NameCentER Discussion Paper
Volume2019-018

Fingerprint

Hospital competition
Empirical investigation
The Netherlands
Logit
Willingness-to-pay
Insurer
Market share
Market power
Healthcare
Rules of thumb
Revenue
Empirical model
Government
Regulatory framework
Transaction data
Managed competition

Keywords

  • hospital competition
  • market power
  • bargaining

Cite this

Berden, C., Croes, R., Kemp, R., Mikkers, M., van der Noll, R., Shestalova, V., & Svitak, J. (2019). Hospital Competition in the Netherlands: An Empirical Investigation. (CentER Discussion Paper; Vol. 2019-018). Tilburg: CentER, Center for Economic Research.
Berden, Carolien ; Croes, R. ; Kemp, R. ; Mikkers, Misja ; van der Noll, Rob ; Shestalova, V. ; Svitak, Jan. / Hospital Competition in the Netherlands : An Empirical Investigation. Tilburg : CentER, Center for Economic Research, 2019. (CentER Discussion Paper).
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Berden, C, Croes, R, Kemp, R, Mikkers, M, van der Noll, R, Shestalova, V & Svitak, J 2019 'Hospital Competition in the Netherlands: An Empirical Investigation' CentER Discussion Paper, vol. 2019-018, CentER, Center for Economic Research, Tilburg.

Hospital Competition in the Netherlands : An Empirical Investigation. / Berden, Carolien; Croes, R.; Kemp, R.; Mikkers, Misja; van der Noll, Rob; Shestalova, V.; Svitak, Jan.

Tilburg : CentER, Center for Economic Research, 2019. (CentER Discussion Paper; Vol. 2019-018).

Research output: Working paperDiscussion paperOther research output

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N2 - The Dutch government introduced managed competition to the health care sec-tor in 2006. In this regulatory framework insurers compete for enrollees andproviders compete for contracts with insurers. The resulting contracts are de-termined by bargaining, which outcome depends on the relative position of theprovider. In this paper, we compare how commonly used market power indi-cators predict bargaining outcomes. We combine 2013 transaction data withbilateral contract data. Our empirical models explain the relative dierences inhospitals' revenues while controlling for dierences in the complexity of patients.Four indicators are used: the logit competition index (LOCI), willingness-to-pay(WTP), Elzinga-Hogarty market share and a rule-of-thumb market share. Wend that WTP and LOCI perform best empirically.

AB - The Dutch government introduced managed competition to the health care sec-tor in 2006. In this regulatory framework insurers compete for enrollees andproviders compete for contracts with insurers. The resulting contracts are de-termined by bargaining, which outcome depends on the relative position of theprovider. In this paper, we compare how commonly used market power indi-cators predict bargaining outcomes. We combine 2013 transaction data withbilateral contract data. Our empirical models explain the relative dierences inhospitals' revenues while controlling for dierences in the complexity of patients.Four indicators are used: the logit competition index (LOCI), willingness-to-pay(WTP), Elzinga-Hogarty market share and a rule-of-thumb market share. Wend that WTP and LOCI perform best empirically.

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Berden C, Croes R, Kemp R, Mikkers M, van der Noll R, Shestalova V et al. Hospital Competition in the Netherlands: An Empirical Investigation. Tilburg: CentER, Center for Economic Research. 2019 May 20. (CentER Discussion Paper).