Effective healthcare cost containment policies: Using the Netherlands as a case study

Western economies have experienced healthcare cost growth over sustained periods of time. Healthcare cost containment holds the potential to prevent excess spending that adds little benefits, reduce crowding out of other valuable government expenditures, retain solidarity principles in healthcare and increase efficiency of spending. However, containing health care costs has been a challenge for most OECD member states. Countries have implemented an array of cost containment policies over the years, aiming to achieve these goals. In 2006, the Netherlands, aiming to contain costs and improve efficiency, introduced principles of managed competition into the health sector. This thesis inquires into the government aim of designing effective and efficient cost containment policies, using the Dutch hospital sector as case study. Four themes are defined, addressing knowledge gaps in the literature and aiming to improve understanding of the macro-level mechanisms of cost containment and quality improvement:
1) Effective cost containment policies at the government level;
2) The relation between cost containment and health outcomes at the macro level; 3) The role of purchasing in improving quality and containing costs;
4) Structural hospital characteristics associated with performance.
Collecting policy options to contain costs, 2250 policies from 710 articles since 1970 were categorized into 41 groups. Four primary categories for cost containment were identified: volume controls, price controls, budgeting and market oriented policies. Price controls and budgeting appeared substantially less often in literature. Market oriented policies were suggested more often for countries with public provision of health care, as well as for the US system. In contrast, budgeting was studied more extensively under market provision systems. Effectiveness of cost containment policy options was systematically reviewed, including 43 original studies and 18 systematic reviews. Payment reforms (10 studies), managed care (8 studies) and cost sharing (6 studies) were evaluated most. Of 41 major groups of cost-containment policies no evidence was available for 21 groups, while results for 13 groups were inconclusive. High-quality evidence suggests that a combination of cost sharing, managed care competition.