Hospital Competition in the Netherlands: An Empirical Investigation

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

Hospital Competition in the Netherlands: An Empirical Investigation

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

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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 language	English
Place of Publication	Tilburg
Publisher	TILEC
Number of pages	31
Volume	2019-008
Publication status	Published - 20 May 2019

Publication series

Name	TILEC Discussion Paper
Volume	2019-008

Keywords

hospital competition
market power
bargaining

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DP2019-008Submitted manuscript, 364 KB

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title = "Hospital Competition in the Netherlands: An Empirical Investigation",

abstract = "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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author = "Carolien Berden and R. Croes and R. Kemp and Misja Mikkers and {van der Noll}, Rob and V. Shestalova and Jan Svitak",

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T1 - Hospital Competition in the Netherlands

T2 - An Empirical Investigation

AU - Berden, Carolien

AU - Croes, R.

AU - Kemp, R.

AU - Mikkers, Misja

AU - van der Noll, Rob

AU - Shestalova, V.

AU - Svitak, Jan

N1 - CentER Discussion Paper Nr. 2019-018

PY - 2019/5/20

Y1 - 2019/5/20

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.

KW - hospital competition

KW - market power

KW - bargaining

M3 - Discussion paper

VL - 2019-008

T3 - TILEC Discussion Paper

BT - Hospital Competition in the Netherlands

PB - TILEC

CY - Tilburg

ER -

Hospital Competition in the Netherlands: An Empirical Investigation

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