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Worries about procurement of healthcare

7 November 2016

The price-quality ratio in healthcare could be significantly better, argues part-time Professor of Purchasing and Supply Management Arjan van Weele. Indeed, healthcare insurers have precious little insight into the quality of the care delivered and also display scant interest in patient satisfaction. Moreover, market forces in healthcare are anything but perfect. “Price increases are simply charged on to the insured, who is totally powerless in practice.”

The increase in healthcare spending in the Netherlands seems to have leveled off in recent years, says Statistics Netherlands. While this may sound like good news, a few simple modifications could make healthcare considerably more affordable for us than the one hundred billion euros per year that we are heading for. Such is the argument put forth by Professor Arjan van Weele, who has for over twenty-five years been responsible two days a week for education and research in the area of procurement and contract management at TU/e, occupying a chair initiated by procurement branch association NEVI.

The operation of market forces is quite inadequate, says Van Weele. It starts with the freedom of choice of the insured, he explains. “You can switch to another insurer every year, but that calls for an intensive search process, which makes such a switch technically complicated. Especially for the minimum income households, for which ten euros per month makes a tangible difference, it is just too complex.”

Besides, in theory consumers are entitled to select their care providers themselves, but in practice that is also a matter of form. “For emergency care in particular, that freedom of choice is simply very limited. In such a situation you are happy with anyone who comes to the rescue.” Moreover, Van Weele concludes that healthcare insurers just do not know how satisfied their clients are with the care providers that they have contracted.

“In negotiations between insurers and
care providers quality is of no consequence”

In the negotiations about rates between insurers and healthcare providers quality is of no consequence, says Van Weele. “It’s only about the rates of the so-called diagnosis treatment combinations. Hospitals get a fixed reimbursement for every broken pulse or appendectomy.” According to him, healthcare insurers do not monitor success rates of treatments. “In a way that even makes it advantageous for hospitals if patients need to come back due to an intestinal infection after an appendectomy, for that entails another treatment that they earn money with.”

Things must and can be better, the professor thinks. After all, given today’s status of IT, proper evaluations are no problem at all anymore. An example in kind that he mentions is Buurtzorg Nederland (where he was a supervisory director). “There they work in teams of a maximum of twelve people, without a management layer. Via a fantastic IT system it is measured how satisfied doctors and patients are with home care, and also how the employees feel about this. Those scores are very high and what’s more, they are cheaper than the competition. I hope that this initiative will be followed on a large scale, for only by making quality and patient satisfaction a priority can we really improve healthcare.”

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