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Preferred providers and the credible commitment problem in health insurance: first experiences with the implementation of managed competition in the Dutch health care system

Published online by Cambridge University Press:  02 December 2010

Lieke H. H. M. Boonen  and
Frederik T. Schut
Lieke H. H. M. Boonen*
Affiliation:
Institute of Health Policy and Management, Erasmus University Rotterdam, The Netherlands
Frederik T. Schut
Affiliation:
Institute of Health Policy and Management, Erasmus University Rotterdam, The Netherlands
*
*Correspondence to: Lieke Boonen, Institute of Health Policy and Management, Erasmus University Rotterdam, PO Box 1738, 3000 DR Rotterdam, The Netherlands. Email: [email protected]
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Abstract

We investigate the impact of the transition towards managed competition in the Dutch health care system on health insurers’ contracting behaviour. Specifically, we examine whether insurers have been able to take up their role as prudent buyers of care and examine consumers’ attitudes towards insurers’ new role. Health insurers’ contracting behaviour is investigated by an extensive analysis of available information on purchasing practices by health insurers and by interviews with directors of health care purchasing of the four major health insurers, accounting for 90% of the market. Consumer attitudes towards insurers’ new role are investigated by surveys among a representative sample of enrollees over the period 2005–2009. During the first four years of the reform, health insurers were very reluctant to engage in selective contracting and preferred to use ‘soft’ positive incentives to encourage preferred provider choice rather than engaging in restrictive managed care activities. Consumer attitudes towards channelling vary considerably by type of provider but generally became more negative in the first two years after the reform. Insurers’ reluctance to use selective contracting can be at least partly explained by the presence of a credible-commitment problem. Consumers do not trust that insurers with restrictive networks are committed to provide good quality care. The credible-commitment problem seems to be particularly relevant to the Netherlands, since Dutch enrollees are not used to restrictions on provider choice. Since consumers are quite sensitive to differences in provider quality, more reliable information about provider quality is required to reduce the credible-commitment problem.

Type
Articles
Information
Health Economics, Policy and Law , Volume 6 , Issue 2 , 16 March 2011 , pp. 219 - 235
Copyright
Copyright © Cambridge University Press 2010

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