Hans Maarse Hans Maarse Foto: Sacha Ruland

Competition in healthcare no guarantee of cost savings

In Money
Written by  Jos Cortenraad Tuesday, 18 October 2011 11:03

The privatisation of healthcare is one of the few options that will help to put a lid on rising healthcare costs. This is a view that enjoys broad political support, especially with a liberal government in power. However, it is highly questionable whether competition and commercialisation will genuinely contribute to the affordability of healthcare in the Netherlands. “That’s an illusion”, concludes Hans Maarse, professor of Policy Sciences at Maastricht’s Faculty of Health, Medicine and Life Sciences, after a comprehensive five-year study financed by the Netherlands Organisation for Scientific Research (NWO).

There was no shocked reaction to this news. No headlines in the newspapers, no emergency debate in the House of Representatives, not even any questions in parliament. But the conclusions drawn by Maarse and his research team in the book Markthervorming in de zorg (Market reform in healthcare) are clear: privatisation has a great influence on the accessibility, freedom of choice, solidarity and quality of care. And – perhaps the most important finding from a political viewpoint – it increases costs. 
 

Difficult

This is bad news for the Rutte government, with the financial and economic crisis still fresh in the public’s memory and €18 billion needing to be cut. “But apparently no-one’s overly shocked”, Maarse reflects, six months after the book was published. “Of course, I’ve had responses. It’s a book worth reading, I’ve been told. A bit difficult too. Well, there are no easy answers to difficult questions. If there’s one sector in the Netherlands that’s complicated, it’s healthcare. Is anyone actually doing something with this study? I don’t know. Politicians thrive on one-liners, on short conclusions and compact solutions. I don’t have any of those. You also won’t hear me saying that privatisation is altogether a bad thing. It can be one instrument among many. I’m just saying that the regulation of the market doesn’t automatically bring about cost savings.”
 
In fact, the study paints a black-and-white picture: the costs will rise. “That’s only logical”, says the Maastricht professor, who explores at least 5200 kilometres of the South Limburg hills on his racing bike each year. “Parties want to grow on a free market. Through more supply, they create their own demand. They’ll compete with one another, offer more treatments, introduce marketing. That’s entrepreneurship. The healthcare market is basically infinite. There’s more than enough demand, and a growing arsenal of technological developments and new therapies and care treatments. It’s an ideal basis for growth.”
 

Conflict

This is not a bad development in itself, because after all, healthcare can always be better. We all want longer and healthier lives. But there are, quite simply, financial limits: the government cannot spend more of its income on care, and nor does it want to. “And this is the fundamental point”, says Maarse. “The government wants to promote entrepreneurship, improve healthcare and at the same time continue to determine how much public funding is spent on healthcare. There’s a particular field of tension between privatisation and government control, if I can put it gently. This is where market and healthcare logic come into conflict.”
 
Privatisation, in the eyes of policymakers and politicians, would have to deliver a lot more than just cost savings. “Yes, greater efficiency, more choice and broader accessibility for the public. More innovation and quality too. And in our study, we establish that this doesn’t necessarily come about automatically either. First, the public inevitably ends up having to bear at least part of the higher costs in the form of higher own risk and a more limited basic care package. Not to mention the role of healthcare insurers – they have a great influence too. Those who want to can get supplementary insurance or pay for it themselves, which puts the idea of solidarity under pressure. In the Netherlands we don’t want a social divide; care has to be accessible for everyone. But ultimately that will only apply to a basic package. So that means we fall short of this notion of accessibility for everyone. These are politically sensitive matters; I wonder how The Hague will deal with them.”
 

Tension

And what of efficiency? Isn’t it a good thing if pressure from competition helps institutions to control their costs and not all separately invent the wheel? “If efficiency means specialisation, then that can have a big influence on choice. In practice it can mean you don’t have to go to Maastricht for a certain treatment, but can get it in Roermond instead. As for more choice, that’s another field of tension: you’re asking institutions to compete but at the same time to work together and make agreements on specialisations. It’s contradictory. And when it comes to quality and innovation, a growth market attracts private investors, who naturally want to gain a certain return on their contribution. So the temptation is there to invest only in lucrative treatments.”
 
Clearly, Maarse is no advocate of the privatisation of healthcare. “Well, I’m not making value judgements. I’m merely suggesting that the privatisation of healthcare doesn’t automatically lead to lower costs or better care and more choice. It’s not a panacea. But competition can indeed have positive effects. You can see that in long-term nursing and geriatric care. Institutions compete with one another and this pushes their level of service provision up. In a follow-up study we’re now going to investigate that further. Maybe we should slowly start to accept market solutions – that’s not my choice to make. I’m just saying that things in this sector are particularly complex and nuanced: the research tells us that there are simply no standard or easy solutions.”

 

Hans Maarse (1948) studied political science and sociology in Nijmegen. He then worked at the University of Twente for ten years before relocating to Maastricht in 1986. From 1995 to 2001 Maarse was dean of the Faculty of Health Sciences (the predecessor of the Faculty of Health, Medicine and Life Sciences) at Maastricht University. The book Market reform in healthcare is available via www.maastrichtuniversity.nl/web/main1/sitewide/sitewide11/markthervormingzaldezorgdiepgaandveranderen.htm  

 
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