Pursuing efficiency in health and social care remains important, but in itself will not solve the sustainability issue.

An activity is considered efficient when relatively little input is needed to achieve its intended results. In health and social care, this means using the minimum possible human, material and financial resources to bring about a certain health benefit or a certain improvement to quality of life. Economists also refer to this approach specifically as productive efficiency: how do we “produce” better health at the lowest cost, in the broad sense of the word? Or in other words, how do we avoid “wastage” in the delivery of care? This contrasts with allocative efficiency, which is about whether people and other resources are deployed in the right place in the light of our society’s wishes and goals.Footnote 1 That is the core theme of the third part of this report (Chaps. 7, 8, and 9), where we look at choices and prioritization in the Dutch health and social care system. Our focus in this chapter is productive efficiency, and in particular the potential for its improvement in terms of resource allocation or cost-effectiveness. In the next chapter we turn our attention to the human dimension of efficiency and home in on the issue of staffing sustainability.

What is the relationship between efficiency and the sustainability challenge? By organizing the provision of care more efficiently, in principle fewer people and resources are needed to meet the same demand. And so, in theory at least, our society’s growing care needs can continue to be met within the restrictive (and interrelated) parameters of financial, staffing and societal sustainability identified earlier in this report—for example, by not overstretching the system’s reliance upon collective solidarity. In practice, moreover, this approach has been at the heart of Dutch health and social care policy in recent decades, manifesting itself through both comprehensive system reforms and more modest adjustments. The question is whether this strategy of “sustainability through efficiency” is a futureproof one given the scale of the challenge we now face.

To find the answer, we need to look first at the overall potential for greater efficiency in health and social care. We begin by exploring how government is trying to improve efficiency through policy interventions, and how the complexity of the system is complicating that effort (Sect. 5.1). From an academic perspective, it is often difficult to predict how effective policy initiatives are likely to be in this regard. For instance, the complexity of care and the multitude of actors involved in its delivery can produce unexpected side-effects. Even looking back, the effects of previous policies are often difficult to evaluate in controlled studies.Footnote 2 The second step is to explore whether the different systems found in other countries perform any better than ours, and might perhaps provide a solution to our sustainability problems (Sect. 5.2). Finally, in Sect. 5.3 we analyse which pathways have the greatest potential to improve efficiency within our current system.

5.1 Efficiency Policy and Complexity as Constraints

Focus Upon Efficiency

The Dutch government has made repeated efforts over the past three decades to improve the efficiency of our health and social care system. Measures implemented over that period have ranged from a complete overhaul of curative healthcare culminating in the introduction of the Health Insurance Act (Zorgverzekeringswet, Zvw) in 2006 to a drive to cut costs by decentralizing responsibility for large swathes of social care under the 2015 Social Support Act (Wet maatschappelijke ondersteuning, Wmo) and Youth Act (Jeugdwet; see also Chap. 4), and in parallel with that the implementation of framework agreements incorporating efficiency rebates as a budgetary instrument. Other more specific initiatives have sought to adjust the supply of various forms of care and to encourage more efficient behaviour on the part of all the actors involved, from care providers to buyers, and even patients themselves.

One example of such a measure is the so-called “preferential policy”, under which health insurers are only permitted to reimburse the cheapest version of a group of medicines with the same active ingredient. This creates a clear incentive for patients and practitioners to choose that product, thus achieving the same health gains at lower cost and so making the treatment in question more efficient. A second example is the policy effort to shift the delivery of care to different institutions or providers (from hospitals to primary care, for example, or from medical specialists and GPs to nurse specialists), an exercise dubbed “The Right Care in the Right Place” (Juiste Zorg op de Juiste Plek, JZoJP) in its most recent incarnation, the idea being that the alternative provider can offer the same quality at lower cost, which increases efficiency.Footnote 3 To this end, the JZoJP programme uses a combination of financial incentives (known as “transformation funds”Footnote 4), information sharing (regional overviews, knowledge-sharing platforms) and other means to support care providers.Footnote 5 Initiatives of this kind—specific measures aimed at improving efficiency within the current system—have come to dominate the budgetary and policy process in recent years. Before addressing their effectiveness in a general sense, below we first analyse how the sheer complexity of health and social care limits the ability to manage its efficiency in a predictable fashion.

Complexity as a Constraint

The Dutch care sector is a behemoth made up of almost countless different institutions and actors. It employs more than 60,000 doctors, about half of whom are active in at least 245 hospitals and other specialist medical institutions. The number of other professional practitioners—working in everything from physiotherapy to general practice, mental healthcare to disability care—also runs into many tens of thousands.Footnote 6 In emergency care alone, more than six million treatments are performed each year. And about 300,000 people are currently in long-term care. All of these services are governed by the five system laws described in Chap. 4, which together are intended to create an accessible, high-quality—yet also efficient—system (see online Appendix 4 for a detailed description).

This sector clearly has all the characteristics of a complex system.Footnote 7 Not only does it involve a large number of actors—providers, patients, buyers and regulators—but it is organized in such a way that none has a complete overview of the situation or is able to exert influence much beyond its own sphere (for an illustration of this complexity, see Fig. 5.1 for the network of actors and relationships governed by the Youth Act—just one relatively small part of the entire system). Furthermore, it features multilevel governance and the actors involved also influence each other.Footnote 8 Its legal framework is complex, too, and includes a multitude of policy incentives. The term “complexity” here reflects the fact that only to a limited extent can outcomes at the system-wide level be traced back to individual actions. From which it follows that it would be an illusion to think that it is possible to manage specific outcomes in detail. Indeed, in a complex system the actions and reactions of the various actors and the resulting net effects are never easy to predict; unexpected repercussions and side-effects always occur. A good example is the way the preferential policy for drugs mentioned above has affected security of supply (see Box 5.1).

Fig. 5.1
A flowchart depicts the monetary flow and roles under the Youth Act. The application is submitted by the minor client to the local authority and is processed through the youth or general court, child care and protection board, which gives the verdict to the juvenile rehabilitation and child protection services, and implementation is carried out by the certified institutions.

Monetary flows, responsibilities and roles under the Youth Act

Box 5.1: Preferential Policy: An Unexpected Side-Effect

In terms of financial efficiency, the so-called preferential policy under which health insurers are only allowed to reimburse the cheapest variant of a drug (the “preferred medicine”) has proven a great success. Between 2009 and 2015, the period in which it first took effect, per-capita spending on medicines in the Netherlands fell by 2.8 per cent. That compared with a 2.3 per cent increase across a group of 31 OECD countries.Footnote 9 But there was also an unexpected downside: because pharmaceutical companies would rather sell to countries where they can command higher prices, the Netherlands began to experience supply problems. In the period 2008–2016, the number of preferred medicines affected by shortages increased from zero to 115. Although drugs not covered by the preferential policy were also affected, with the number in short supply rising from 156 to 647, relatively speaking that was a much smaller increase.Footnote 10 For patients such an effect can cause uncertainty and mean that they are frequently forced to take an alternative medication, which may not have the same efficacy as the one they used before.

Realism in Efficiency Policy

In a complex system, it is hard to predict the full impact of policy interventions. But what can we say in general terms about the effectiveness of the efficiency-driven policies implemented in the Netherlands in recent decades? Looking at their costs and benefits across the board, our first conclusion has to be that the actual returns often fall short of expectations. The Netherlands Court of Audit (Algemene Rekenkamer) has specifically highlighted this point with regard to the shift towards “cheaper” providers,Footnote 11 with phenomena such as “infill” effects (the capacity released is simply used for other things) and “waterbed” effects (the point of delivery changes, but the amount of care provided does not decrease) being responsible.Footnote 12

From the perspective of complexity theory, this comes as no surprise. Providers who previously offered care that has now been displaced or deemed not appropriate inevitably respond to the changing situation. Sometimes this happens subconsciously: because there is now less pressure on capacity, practitioners become less strict when indicating other forms of care. And sometimes, at least in the short term, it is a more structural issue. Moving care out of a hospital does not immediately generate savings, after all, because it takes time to adjust spending on buildings, people and ancillary services in line with the reduced use of the facility. Incentives can also play a part. Take the case of the small town of Afferden in the Dutch province of Limburg, for instance, where the transfer of care services to GPs was so “successful” that it undermined the funding base of the local hospital, putting it at risk of closure.Footnote 13 This shows how, in some cases, care that could in principle be offered more efficiently elsewhere should actually be kept where it is so that the institution concerned can use the revenue it generates to cross-subsidize other, less lucrative provision.

A second observation is that the intended effects of efficiency measures often take a long time to materialize. This is because the various actors involved have to adapt, and organizations have to be restructured. An example of this is the programme of reforms implemented at two regional hospitals in the south of the Netherlands, the Beatrixziekenhuis in Gorinchem and Bernhoven in Uden. An independent evaluation found that whilst a combination of long-term contracts with health insurers to reduce so-called “production incentives” (which encourage providers to deliver more care than is strictly necessary) and greater co-operation with local GPs would eventually improve efficiency, that effect could take years to materialize.Footnote 14 Whilst the permanent pressure to cut spending makes it tempting to introduce one cost-saving initiative after another, the administrative burden created by these constant changes can easily prove counterproductive when it comes to effectiveness. For example, the Court of Audit found that they may undermine efforts to promote appropriate use of care: the large number of programmes and policy initiatives can potentially ask too much of the workforce.Footnote 15 Since actors within the care system adjust their behaviour accordingly, moreover, over time efficiency measures may lose their edge or even start to have adverse repercussions. This effect is reinforced because, in practice, the purpose of and analytical justification for such measures are driven strongly by financial accountabilityFootnote 16—possibly to the detriment of public values like the quality and accessibility of care. Once again, the preferential policy for drugs exemplifies this phenomenon (see Box 5.1). And its consequences also illustrate a broader point: in a complex system with many independent actors who all have their own interests and preferences, side-effects always occur and these can never be fully anticipated at the moment of first implementation.

Realism About Complexity

Despite all this, complex systems are not inherently problematic; rather, they reflect a high degree of system development. The complexity of Dutch health and social care is largely a product of the need for high-quality and increasingly specialized provision, fuelled by greater knowledge, better technology and growing prosperity. However, complexity does limit the extent to which policy can manage outcomes and—importantly for sustainability—the efficiency of care in a predictable, linear fashion.

But the observation that complexity is to some extent inevitable does not mean that all added complexity is valuable. Care policy should avoid unwittingly or unthinkingly creating superfluous additional institutions and management or control mechanisms, if only to counter the increasing administrative burden being experienced on the shop floor (see also Chap. 3) and hence the growing pressure on staffing sustainability (see also Chap. 6). One way to keep this dynamic in check is to price additional requests: if someone asking for more information has to pay for it, that creates an incentive to think more critically about whether they really need it. There is also a political responsibility to prevent excessive complexity: it is all too tempting to respond to every new incident in the care sector with yet more policy incentives, initiatives or institutions. That tendency can be tempered by assessing in advance whether the resulting extra complexity is proportionate to the policy objective, and by evaluating any side-effects and behavioural responses it might cause. All in all, then, the complexity aspect of efficiency policy demands modesty regarding the role that policy is assigned in meeting the sustainability challenge. Not just because its focus is often purely financial and the returns likely to be limited, but above all because the resulting side-effects and behavioural responses often fail to conform to expectations.

Fragmented Policy Data as a Complexity Problem

All of this suggests that we should be cautious both in instituting efficiency measures and in “chalking up” their effects. With that in mind, the continuous, prompt and broad monitoring and evaluation of health and social care policies are a must. Which in turn requires access to good data that measures outcomes effectively in terms of efficiency and the public values of quality and accessibility. This is important firstly because the collective nature of the sector’s financing means that data has a key role to play in the public debate and must therefore not only be accessible, but also be up to date, insightful, consistent and comprehensive. And secondly because we need to gauge results not only in terms of economic indicators such as expenditure but also as they relate to broader normative goals, in particular the accessibility and quality of care.

The sector’s complexity, however—from the specialist nature of the product to the multiplicity of institutions supplying it—means that the relevant information is generated in a diffuse and disparate manner. As outlined in Box 5.2, responsibility for the collection, collation and publication of data concerning expenditure, employment and performance indicators in care is currently spread across a variety of institutions, including Statistics Netherlands (Centraal Bureau voor de Statistiek, CBS), the National Health Care Institute (Zorginstituut Nederland, ZiN), the Dutch Healthcare Authority (Nederlandse Zorgautoriteit, Nza) and the National Institute for Public Health and the Environment (Rijksinstituut voor Volksgezondheid en Milieu, RIVM). The way these bodies divide up tasks between themselves is only in part a product of their formal statistical responsibilities. As a result, it is often difficult to obtain detailed, up-to-date information concerning the quality and accessibility of different aspects of care in a structured manner. Moreover, the policy horizon is sometimes short because the definitions and parameters used when recording data change over time. This in turn is linked to the ad-hoc nature of many initiatives to track and evaluate outcome data in care; new monitoring systems with their own sources, definitions and infrastructure are often set up in line with a particular government’s policy priorities, for instance, but are not maintained over the longer periods—multiple government terms—needed for their results to inform future health and social care policy effectively.

Box 5.2: Complexity and Fragmentation in Policy Data

Under the heading “health accounts”, Statistics Netherlands compiles time series of total and collective expenditure on healthcare and on employment in the sector. These are published on its Statline website. This data is then used to compile the Care Figures Monitor (ZorgCijfers Monitor), managed by the ZiN, which has been tracking the cost evolution of specific forms of care on a quarterly basis since 2018. Meanwhile, the Cost of Disease (Kosten van Ziekten) section of Statline, managed jointly with the RIVM, breaks down the same expenditure by disease type. A core set of performance indicators can be found on the RIVM-operated “public healthcare information” website, volksgezondheidenzorg.info; these cover quality, accessibility, affordability and efficiency. The “quality” section lists 44 indicators divided into six clusters,Footnote 17 “accessibility” has 13 indicators and “affordability” eight. Whilst the data for most indicators stretches back to 2010, a methodological break means that the figures for waiting times in curative healthcare from 2019 onwards are incompatible with those from previous years.Footnote 18 Finally, much of this data is brought together on the “state of public health and healthcare” website, www.staatvenz.nl, which claims to provide “the most up-to-date key figures for the policy of the Ministry of Health, Welfare and Sport”.

As well as these sources of primary data, there is also the overview of performance indicators in the Dutch Healthcare Performance Report (DHCPR). This has been published regularly since 2006, making the Netherlands one of the first countries in the world to provide such comprehensive reporting.Footnote 19 Generating a clear picture that enables the effective identification of problems is hampered, however, by fragmentation and by the desire to meet the needs of patients, professionals and policymakers alike. As a result, no fewer than 125 indicators are listed. Nevertheless, such statistics are receiving increasing coverage in the international literature—through studies of “value-based healthcare”, for instance.Footnote 20

That there is also room for improvement here when it comes to international comparisons, a 2015 OECD study makes clear in a number of ways.Footnote 21 This reported on an analysis of the share of national healthcare datasets that met common criteria concerning availability and use.Footnote 22 Of the 22 nations studied, we find the Netherlands in seventeenth place. Our country scored relatively poorly, for example, on availability, extent of data coverage and the proportion of available datasets that are linked periodically for research and monitoring purposes.Footnote 23 When it came to the disclosure and accessibility of outcome data, too, the Netherlands languished in the lower regions.Footnote 24 Finally, a ranking of the same 22 countries by the number of parties responsible for managing national datasets highlights another point mentioned above: the fragmentation in data collection, collation and publication. Besides the Netherlands, only Norway and Ireland have seven or more responsible parties (see Table 5.1).

Table 5.1 Parties responsible for managing national healthcare datasets

The upshot of all this is not so much a lack of data as an overabundance, plus a failure to disclose it systematically—especially on the output indicators side. And amidst all this fragmentary information, vulnerable groups are especially likely to be overlooked. Take the growing waiting lists in mental healthcare, for instance, which only really came to public attention when a patient took a seat in the entrance hall of the Ministry of Health, Welfare and Sport (VWS) in January 2020 in protest after multiple suicide attempts and hundreds of days waiting for a treatment place.Footnote 25 Similarly, users of child and youth care services only found their plight being highlighted once the juvenile courts started sounding alarm bells.Footnote 26 Better data certainly does not guarantee the early detection of such problems at every level, but it does improve the likelihood that they will be spotted. The multitude of indicators is inherent in the nature of care and a result of the differentiated measures used in assessment. These observations therefore do not constitute a plea to further increase administrative burdens, but rather a call to make better use of the potential tied up within existing data.Footnote 27 More systematic collection and collation of performance data, co-ordinated by a single actor, could in principle even mitigate the problem of the same information being requested multiple times. This solution requires not only guaranteed long-term funding, however, but above all political commitment to creating systematic, sector-wide and always consistent statistical output derived from primary data that is supplied on a structural basis.

Key Points—Efficiency Policy and Complexity as Constraints

  • Health and social care is considered more efficient if it “produces” better health using fewer people and other resources. In recent decades, “sustainability through efficiency” has become a cornerstone of Dutch policy efforts in this sector.

  • Efficiency’s true potential is often difficult to estimate. Even looking back, the effectiveness of past initiatives in this field can only be established to a limited extent.

  • Complexity is inevitable in the care system and need not be inherently problematic, but rather reflects a high degree of development.

  • However, complexity does limit the potential to manage efficiency effectively. Specifically, we see that: (1) measures taken often fail to live up to expectations, financially or otherwise; (2) it can take a long time for effects to appear; and (3) unexpected side-effects are commonplace.

  • Any changes to the system should therefore always go hand in hand with permanent, up-to-date and comprehensive monitoring and evaluation. Currently, these processes are inadequate.

  • It is important that outcome and performance data be disclosed in a systematic and timely manner, and that its collection be safeguarded and funded in the long term.

  • We must beware of “administrative overload”, whereby large numbers of programmes and initiatives are implemented without allowing earlier policies to reach maturity. Changes to a complex field like health and social care need time to bed in.

5.2 System Reform and Sustainability

From time to time in the public and political debate on the organization of health and social care, the case is made—either implicitly or explicitly—for a complete reform of the system.Footnote 28 In other words, a fundamental redefinition of the roles and responsibilities of the actors involved. This would go much further than the measures discussed in the previous section, which would merely recalibrate the existing system. Since care is structured and organized differently in different countries, an obvious starting point is to look elsewhere to see if any of those alternatives offer better solutions when it comes to sustainability issues. Could systemic change lead to greater efficiency? With that question in mind, in this section we look in particular at various curative and long-term care systems in other developed countries. The reasons for focusing upon these two areas are threefold. First, debates around system design in the Netherlands focus primarily upon curative healthcare, and especially upon the merits of allowing market forces to operate in this domain.Footnote 29 Secondly, outcomes in terms of quality and accessibility are relatively easy to compare internationally in these areas (and in curative healthcare in particular). And thirdly, they are far by the largest parts of the system in expenditure terms. Since they are also the domains in which the greatest growth is expected in the coming decades,Footnote 30 any strategy of sustainability through efficiency must inevitably centre on them.

Curative Medicine in the International Context

We first look broadly at the different ways in which curative healthcare systems can be organized. Various typologies can be used to do this, but one of the most common distinguishes three roles that any system of this kind must fulfil: (1) supplying care (who provides the service?), (2) financing it (who pays?) and (3) regulation (who oversees the system?).Footnote 31 Each of these questions has three possible answers: private actors (commercial or not-for-profit private institutions), state actors (national, regional or local government) or a combination of the two (“civil society”, as it were). In practice, this typology identifies five different types of curative healthcare system actually in place in various countries (see Table 5.2). In a national health service of the kind found in the UK, the Scandinavian countries, Portugal, Spain and Iceland, for example, the provision, financing and regulation of care are all government duties. The Netherlands, along with Belgium, Poland, France, Israel, Japan and others, has an “etatist” social health insurance system—meaning that healthcare itself is delivered by private actors whilst its regulation is a state responsibility and its financing a societal task (in the Dutch case through regulated semi-public health insurers).

Table 5.2 Types of healthcare system

It is important to remember that the categories described here are broad ones and there is also considerable variety within each of them. So whilst etatist social health insurance systems like the Dutch one have more in common with each other than with the other types, they still differ substantially between themselves. For example, not all countries in this group have multiple competing health insurers as the Netherlands does. Likewise, the primacy in national health services lies with government—but not always at the same level. In the UK central government is very much in charge, whereas in Scandinavia regional and local authorities play a much greater role. Moreover, no national system is a pure exemplar of its category—there are always deviations from the archetype. This is mostly due to its historical background. Even in the United States, usually regarded as the very embodiment of a private health system, curative healthcare for large sections of the population is delivered through government-funded or controlled programmes more reminiscent of a national health service and national health insurance system.Footnote 32

Some time ago the OECD conducted a comparative study into the efficiency of different healthcare systems.Footnote 33 The main finding was that no one type is superior. In fact, the differences within groups sharing the same type characteristics were found to be greater than the differences between groups. The one exception—in a negative sense—was the United States, where spending is exceptionally high whilst outcomes in terms of quality and accessibility are certainly not in the top tier in all respects. A more recent study has broadly confirmed these results.Footnote 34 In that analysis, the researchers calculated average efficiency scores for four of the five system types.Footnote 35 The differences between them were found to be limited and not statistically significant, except that systems based upon social health insurance (such as Germany) scored substantially lower than the other types. Of course, this does not mean that there are no efficiency gains to be made anywhere; inefficiencies can always be found in any system. Nor does it mean that there is no difference between systems (or types of system) when it comes to other outcomes (see Box 5.3, for example). But the bottom line is that, efficiency-wise, no type of curative healthcare system as a whole performs substantially better than the rest.

Box 5.3: Organizing Healthcare in Response to Covid-19

The recent pandemic sparked heated debate about the organization of healthcare in the Netherlands. Was the severe pressure on intensive care units (ICUs) at the height of the crisis not the ultimate proof that market forces had been allowed too much influence? Or did it instead highlight the limitations of centralized control? It is still too early to fully analyse the performance of different healthcare systems in the face of Covid-19. But we can nevertheless gain a first impression by looking at the vaccine rollout as a case study.

It is probably no coincidence that, initially at least, the UK saw by far the fastest increase in vaccination coverage in Europe.Footnote 36 Vaccine availability was an important factor in this. But so was the country’s highly centralized healthcare system, the National Health Service (NHS), which allowed top-down action to be taken relatively quickly with clear responsibilities and short lines of communication. In Denmark too—also an NHS system, albeit a more regionalized one—the rollout was relatively quick once vaccines had been authorized.Footnote 37 The ability to act relatively fast in emergencies and to scale up the necessary services therefore seems to be a particular positive feature of a system under central control. In both countries, moreover, the delivery of care has historically been seen much more as a task for government than it is in the Netherlands.

From the sustainability point of view, however, we need to assess system performance more broadly. Every type of healthcare system has its strengths and its weaknesses. And when it comes to the organization of care in response to Covid-19, details matter as well. One of key themes in the Dutch debate, for example, was ICU capacity: some commentators argued that the relatively low number of critical care beds in the Netherlands (6.4 per 100,000 inhabitants) was a consequence of the stringent focus upon efficiency in recent decades, whether through market forces or not.Footnote 38 But this figure is actually about the same as in the UK’s centralized, government-controlled NHS (6.6). In Germany, by contrast—a system much more like the Dutch one when it comes to curative healthcare—the number is considerably higher (29.2). Once again, we have to conclude that very different system-design models can lead to very similar outcomes and that very different outcomes can occur even when systems’ designs are similar.

Long-Term Care for the Elderly in the International Context

In expenditure terms, long-term care for the elderly is already second only to curative healthcare. And it too is set to grow substantially in the coming decades, in the Netherlands and elsewhere. A background study for this report compared this form of provision in Japan, England, Denmark and Germany.Footnote 39 These countries were selected because, in terms of the rate at which their populations are ageing, they are either similar to the Netherlands (England, Denmark) or somewhat ahead of us (Germany, Japan) and because they represent different types of long-term care system. The authors adopted a typology featuring four categories and based upon the broad classification of welfare states originally proposed by Esping-Andersen (see Table 5.3).Footnote 40 Dutch long-term care for the elderly is best classified as “corporatist” in nature, although government plays a rather larger role here than in other countries in this category, and the family a more limited one. In other words, the Netherlands broadly conforms to the corporatist model but with strong influences from the social democratic one, and to a lesser extent from the liberal one.

Table 5.3 Characteristics of the welfare state in Germany, Denmark, England and Japan

From this comparison we are able to draw lessons with regard to the efficiency of long-term care for the elderly. And here once again, the key conclusion has to be that there is no best solution; that none of the systems studied really manages to solve the dilemmas surrounding the quality, accessibility and sustainability of long-term care for the elderly. Incidentally, it is more difficult to make international comparisons in this domain than in curative healthcare. “Good” care for the elderly, after all, is very much about quality of life, which is harder to measure objectively and more culturally and socially determined than clinical outcomes.

System Reform Will not Resolve the Sustainability Challenges

What conclusions for the Dutch situation can we draw from these results? In neither curative healthcare nor long-term care for the elderly do we find any alternative system abroad that is likely to be substantially more efficient than our own. So there is no reason to believe that overhauling the system, however fundamentally, would lead to substantially more efficient care and thus help solve sustainability issues. Moreover, it would incur considerable transition costs.Footnote 41 To introduce a fully public healthcare system (a “Dutch NHS”, as it were), for instance, the Netherlands Bureau for Economic Policy Analysis (Centraal Planbureau, CPB) estimates the direct transition costs alone at more than €6 billion (€750 million per annum over a transition period of eight years).Footnote 42 Perhaps weighing even more heavily, though, is the long preparation time needed for any system reform—not just for the administrative work, but also to “prime” the public for the changes. As described in the previous chapter, the introduction of the Zvw took two decades. By way of an alternative, then, in the next section we look at possibilities to achieve efficiency gains within the current system.

Key Issues—System Reform and Sustainability

  • There are big differences between the health and social care systems in different countries. One key defining factor here is the allocation of public and private responsibilities.

  • All systems can be improved, but no alternative type delivers care in a substantially more efficient way. This applies to both curative healthcare and long-term care for the elderly.

  • The transition costs and preparation time involved in system reforms are considerable.

  • Given the lack of evidence from international comparative research of substantially better outcomes, a system reform cannot be expected to solve the sustainability challenge.

5.3 Improving Efficiency Within the Current System

In this section we look at a number of ways in which efficiency could be improved within our existing health and social care system. Given the huge number of initiatives, plans, strategies, manifestos, programmes and policy proposals devised to this very end over the years—with a scope ranging from the entire system to very specific subdomains—we cannot and do not pretend that we are here able to offer a comprehensive insight into where concrete gains could be made. The most systematic recent analyses of likely effects, predominantly along the axis of financial sustainability, are provided by the report Zorgkeuzes in Kaart (“Choices in Care Charted”)Footnote 43—in which various Dutch political parties put forward a total of 147 ideasFootnote 44 to improve the system—and the government’s “broad social review” (“Brede maatschappelijke heroverwegingen”, BMH) of healthcare.Footnote 45 In this section we look with a higher level of abstraction at the general directions in which the greatest potential for efficiency improvements within the system are likely to be found. As a reminder, efficiency can be enhanced by improving the outcomes of care—its quality and accessibility—as well as by reducing the use of people or resources.

A More Efficient System in the International Context

Although the international comparative research described in the previous section suggests that there are no substantial differences between the various types of healthcare system, considerable variation can be found within each type. Lee and Kim, for instance, have shown that within the etatist social health insurance category, the Netherlands scores relatively poorly in terms of efficiency.Footnote 46 From this we can conclude that whilst it may not be desirable to transform the system completely, it does not necessarily follow that no improvement is possible.

What might those improvements be? That question is not easy to answer based upon Lee and Kim’s research. National systems differ in dozens of respects, after all, and these cannot be compared one-to-one to gauge their relative efficiencies. Nevertheless, the authors examine their entire sample of 35 countries in search of explanatory factors and do find three aspects which have a significant effect upon the efficiency of healthcare systemsFootnote 47: those with freedom to choose one’s health insurer, with greater decentralization and with more accessible quality and price data concerning the supply of care are found to be less efficient on average. On the latter point, though, the authors concede that the reason for the relationship is not well understood and that this result conflicts with findings from other studies. As we have already seen, moreover, public availability of the data in question is relatively low in the Netherlands, suggesting that this factor plays only a limited role here. In the other two respects, however, the effect described may well be present: citizens are free to choose their health insurer and the system is relatively decentralized, especially in long-term care (procurement through 36 regional care administration bureaus) and social support (procurement at the municipal level). One reason why this might reduce efficiency is the higher implementation and administration costs of those arrangements.

Integrated Care, Care Procurement and Decentralization

This brings us to the themes of decentralization and procurement, and by extension the notion of market forces in health and social care. We can link these themes to a significant epidemiological development (see Chap. 2), namely the rising number of chronic patients with multiple conditions (multimorbidity). The increasing complexity of their medical needs means that more and more people are having to deal more and more frequently with different care providers, suppliers and buyers, mostly over many years. Things become even more complicated when this situation crosses the jurisdictional boundaries of the various system laws, with their different responsibilities, entitlement criteria and sources of funding. Take a mental health patient, for example, whose treatment is primarily curative (and hence largely funded under the Zvw) but who also needs varying degrees of long-term care (Wlz) and social support (Wmo). Patients and care providers alike often experience delineation problems at those boundaries—also known as “partitions”. And they can affect both the quality of that person’s care and the sustainability of the system more generally. As when someone occupies an expensive hospital bed for an unnecessarily long time because, say, home care has not yet been arranged.

Such issues have led to public calls for “departitioning”, otherwise known as “integrated care”. In other words, for better co-operation and co-ordination between various types of care provider. Appendix 4 provides an overview of the scientific evidence regarding the effectiveness of this approach, revealing that integrated care not only increases patient satisfaction but possibly also leads to better clinical outcomes. The satisfaction aspect probably bolsters the societal dimension of sustainability, an important part of the overall equation, but the implications of departitioning for the financial and staffing dimensions are either unknown or ambiguous. Without harder evidence in that regard, we should remain cautious about attributing major efficiency effects to proposals of this kind.

How does this relate to decentralization and procurement? We look first at the procurement aspect and—by association—at market forces in care (see Box 5.4 for a brief dissection of the links between them). Lack of co-operation between care buyers is often seen as a barrier to integrated careFootnote 48: their failure to align their procurement criteria supposedly prevents providers organizing their processes in an holistic, patient-centred fashion. This is a particular problem when they are caring for “complex” patients. They may, for example, have to deal with multiple health insurers with mutually conflicting wishes or purchasing criteria, which can hinder a transformation process within a hospital. But they face an even bigger challenge when it comes to harmonizing procurement practices under the various system laws. Each of them, after all, assigns responsibility for buying care to different bodies with different powers: local authorities under the Youth Act and Wmo, care administration bureaus under the Wlz and health insurers under the Zvw. Moreover, the regional boundaries of these procurement regimes do not always coincide.

Box 5.4: Procurement and the Three Markets in Care

The role played by market forces in health and social care is a hot topic in the Dutch public debate. But it is not always clear what exactly is at issue. In Chap. 4 we saw that there are actually three distinct markets in this sector. In the health insurance market, insurers compete for consumers’ business. In the health delivery market, providers vie to attract patients. And in the care procurement market, buyers seek to secure good and efficient care. Criticism of market forces and their role can relate to any of these markets, or to all three at once. But only in curative healthcare (governed by the Zvw) do all three operate, so only there can we say that there is a full—albeit tightly regulated—market system in place. When it comes to other forms of provision—social support (under the Wmo), long-term care (under the Wlz) and child and youth care services (under the Youth Act)—a patient or user only has to deal with their local authority or regional care administration bureau; they cannot choose an alternative care buyer (unless they physically move to another district or region). In the international comparative literature this is called a “single-payer” system, because there is only one care buyer per geographical area.

The Netherlands thus has a multiple-payer system for curative healthcare and a single-payer one for the rest of health and social care. Since consumers have no choice over who buys care on their behalf, the single-payer regimes do not have health insurance markets.Footnote 49 But the other two markets described above do exist to a greater or lesser extent (depending upon the exact regulations in placeFootnote 50), because both patients (care delivery) and the sole buyer (care procurement) can in principle choose between multiple providers.

In practice, though, even in curative healthcare the importance of regulated market forces as a mechanism to achieve greater efficiency has declined over the past decade. This is due to the impact of instruments like framework agreements and the macromanagement tool, which were introduced because the Zvw as originally enacted did not appear to be achieving the degree of improvement it was supposed to bring about, especially with regard to financial sustainability. On the one hand these additional instruments serve as mechanisms to safeguard efficiency incentives in procurement processes, but to some extent they also conflict with that aim and can undermine the intended price competition.Footnote 51

This brings us to decentralization. It seems quite plausible that organizing procurement and funding at different regional levels limits the potential for co-operation between different parts of the sector.Footnote 52 In the Netherlands, such issues are encountered when patients face problems transitioning between forms of care governed by different system laws. Incidentally, this point also touches upon the policy debate surrounding regionalization in the Netherlands. In Box 5.5 we provide a brief analysis of the meaning and interpretations of this concept. In the current Dutch discourse, regionalization seems to be closely associated—and sometimes to coincide—with pleas for closer and more intensive co-operation between different (and different types of) care providers. For example, for “complex” patients with multiple conditions, in child and youth care services or in care for the elderly.Footnote 53 The notion that more integrated care is needed is here linked to the idea that the required co-operation is best achieved at regional level.

Box 5.5: The Regionalization of Care: An Analysis of a Diverse Concept

The term “regionalization” has played an increasing role in Dutch policy discussions around health and social care in recent years.Footnote 54 In a general sense, the idea is that care (or particular aspects of it) should be organized and possibly also financed and purchased at the regional level. This can be argued for reasons of quality, accessibility or efficiency. Such regionalization can be either centralizing in nature (a shift from local to regional organization) or decentralizing (from national to local organization).

A second dimension of regionalization concerns the type of provider it creates at the new regional level of organization. Are these similar to their predecessors, just covering geographically different areas, or does regionalization also involve the integration of different types of provider that previously operated separately? One historical example of the latter is the formation in the 1960s of Regional Institutes for Outpatient Mental Healthcare (Regionale Instellingen voor Ambulante Geestelijke Gezondheidszorg, RIAGGs) out of a previously disparate constellation of local providers active in social psychiatry, psychotherapy, child guidance and so on.Footnote 55

A third dimension is the question of whether regionalization concerns only the delivery of care or also its funding and procurement. Under the current Wmo and Youth Act, for example, procurement is officially entrusted to local authorities but in practice is often undertaken in part by regional partnerships.

Finally, there is the geographical dimension. In other words, what actually constitutes a “region”? In the current Dutch policy debate, this one term can refer—amongst other classifications—to the seven medical education and training regions (Onderwijs- en Opleidings Regios, OOR), the eleven acute care chain regions (Regionaal Overleg Acute Zorgketen, ROAZ-regios), the twelve provinces, the 25 community healthcare and public safety regions (GGD−/veiligheidsregio’s), the 31 care administration bureau regions (zorgkantoorregio’s) or the 42 child and youth care regions (jeugdzorgregio’s).

In short, the notion of “regionalization” in health and social care usually suggests an alternative to an existing geographical organizing principle. But this broad concept can be interpreted in many different ways, making it difficult to evaluate as a general phenomenon.

As stated earlier, there is some international comparative evidence to suggest that multiple care buyers and the decentralized organization of a care system are associated with lower efficiency. This seems to correlate with the idea that—in the interests of “complex” patients in particular—greater co-operation between providers is desirable but is currently not being properly achieved due to insufficient synchronization of their incentives under the different system laws, and especially at their mutual boundaries. A phenomenon only compounded by the lack of congruence in the geographical scope of those laws in a decentralized system.

A More Efficient Procurement and Care Landscape

What does this mean for care procurement? In our analysis, there are five dimensions to this question. The first of these concerns the form and scope of procurement: what actors should buy care, how should they interact and how should they be defined geographically?

The findings outlined above argue in favour of greater commitment to co-ordination between care buyers and greater congruence in their geographical scope. In other words, for fewer different types of region. In terms of the three markets in health and social care, this would effectively mean reducing the number of buyers and hence a contraction of the health insurance market. Practically speaking, though, a commitment to greater co-ordination can mean many different things. At one extreme, for example, it could entail the creation of a universal “single payer” in all (or almost all) care domains. That is, merging all the current health insurers and other buyers into one new insurance and procurement organization. For the Dutch system, this would represent a fundamental overhaul. Indeed, referring back to the typology summarized in Table 5.3, it would transform our underlying model from etatist social health insurance to national health insurance—or, if the delivery of care were also to become a government responsibility, even a national health service.

A much more limited interpretation of the commitment to greater co-ordination is to encourage health insurers to be more congruent in their procurement of the curative healthcare covered by the Zvw.Footnote 56 One possibility here is to establish a legally binding system of “preferred health insurers” on a regional basis, with the other insurers in a given region being required to follow the procurement practices of its designated “preferred” insurer. Other options include measures to better align the procurement of care by the buyers operating under the different system laws, as recently proposed by health insurer Menzis.Footnote 57 These, too, could be made legally binding to a greater or lesser extent.

Our second dimension concerns the forms of care covered by this greater degree of co-ordination in procurement. One idea might be to exclude plannable routine interventions such as cataract, hip and knee operations—broadly speaking, forms of care that can be delivered more efficiently at specialist clinics and independent treatment centres (ITCs)Footnote 58—from congruent care procurement. It is precisely with interventions of this kind that competition between buyers is most effective as a driver of greater efficiency. The mirror image of this model is to define only those forms of care that we explicitly wish to exclude from such competition. In a recent advisory report, the Council of Public Health and Society (Raad voor Volksgezondheid en Samenleving, RVS) suggests exactly this approach, with an exclusion for acute care.Footnote 59 Whatever exact form the model takes, the underlying principle is that market forces be allowed to operate differentially in care procurement. Public and political debate would then focus more upon the relevant trade-offs in that respect rather than upon “market forces” themselves as an abstract phenomenon.

A third dimension is the overall structure of the care landscape: the whole set of institutions which constitute the sector and the way the delivery of care is distributed between them. A more efficient landscape—one better adapted to the epidemiological and demographic developments outlined above and to ongoing advances in healthcare technology—may well have a structure quite different from the existing one, which is largely the product of historical evolution.Footnote 60 In this regard, it is important to ensure that the incentives built into the system do not “freeze” the care landscape in its current form; structural change must always remain possible. If organizational improvements—such as the reforms mentioned earlier at the Beatrixziekenhuis and Bernhoven hospitals—are hindered by perverse incentives rooted in regulation or funding, it is up to government to review those encumbrances. Given the sector’s complexity and the constraints that imposes, in many cases the most effective way to change the care landscape for the better is through experiments with new ways of organizing provision rather than by means of large-scale programmes applied from the top down.Footnote 61 And often specifically through alliances formed by multiple providers and buyers to address concrete problems. One example is the care networks set up to deal with complex chronic conditions such as the lung disorder COPDFootnote 62 and Parkinson’s disease.Footnote 63 Another is the oncology care network.Footnote 64 Structures of this kind tend to be more efficient because they create economies of scale, especially when treating patients with chronic care needs.Footnote 65 As much as possible, then, government and regulators should create the right conditions to facilitate such experiments. It is crucial, moreover, that they be evaluated quickly and comprehensively to confirm that they are achieving their intended effects and to check for the unexpected side-effects which can easily occur in a complex care system (see the beginning of this chapter). A good example of this is the thorough and broad evaluation of the Bernhoven and Beatrixziekenhuis experiments.Footnote 66 Note, too, that the wider implementation of a promising evidence-based intervention does not necessarily continue to produce the same positive resultsFootnote 67 and so further evaluation is always needed to enable timely adjustments at the policy level.

Our fourth dimension involves strengthening the learning ability of care providers. If experiments are found to generate greater efficiency, it is a task for government to remove any barriers preventing their further rollout. Take the Afferden case discussed earlier, for instance, where giving GPs greater care responsibilities proved so “successful” that it put the financial continuity of the local hospital at risk. In other words, an adjustment to the care landscape that was desirable from the sustainability and quality point of view was thwarted by the historical structure of that landscape. In cases of this kind, government may need to facilitate the required structural change through funding-based incentives. The NZa and the ZiN have recently made suggestions about how this can be done.Footnote 68

The final dimension whereby experimentation can improve the efficiency of care centres on patience. Positive effects often take a long time—sometimes many years—to materialize. This is because various actors have to adapt to new ways of organizing and designing care. It is therefore important to give consistent policies and initiatives a chance. In many cases it is better to adjust existing programmes following well-timed evaluations than to launch new initiatives—an approach which also avoids unnecessary red tape and pressure on the people involved.

Budgetary Effects of Efficiency Measures

Finally, we address the key question of how great a financial benefit we can actually expect a more efficient health and social care system to achieve. A general estimate of the likely impact of proposals in this domain can be found in the Ministry of Finance’s “broad social review” (BMH) mentioned at the beginning of this section. The BMH divides possible measures into two main categories, according to their intent: (1) strengthening regulated competition and (2) strengthening regulated co-operation (see Table 5.4). The first of these includes suggestions like abolishing the so-called “impediment criterion” so as to allow health insurers to reimburse a significantly lower proportion of the cost of treatment not covered by a contract with a care provider, as well as strengthening the regulatory supervision of competition in the market and ensuring a greater focus upon the appropriate use of care. Amongst the possible measures in the second category are so-called “allocative standardization” (that is, reimbursement by insurers on the basis of best practices), the salaried employment of medical specialists (at present many are self-employed as individuals or members of a partnership) and extending the duty of care incumbent upon insurers and care providers.

Table 5.4 Estimated budgetary effects of efficiency-driven policy options from BMH 2020

Looking at the overall picture, we see that the estimated efficiency gains are greatest in the “strengthening regulated co-operation” category. In all, these could amount to between €2.4 and €3 billion. When it comes to “strengthening regulated competition”, the BMH puts the figure at between €1.4 and €1.7 billion. The WRR does not argue here for or against implementation of any of the measures listed, in either category: that is ultimately a political matter, in which ideological and normative considerations inevitably play an important role. Our only concern is their potential impact (individually or as a whole) with regard to the topic of this report, the sustainability of the Dutch health and social care sector. From that perspective, however, we note that—quite apart from the transition costs involved (the BMH’s “co-operation” category, for example, includes taking all medical specialists into salaried employment, at a projected one-off cost of €2 billionFootnote 69)—strategies of this kind to make our system more efficient only address the issue of financial sustainability to a very limited extent. This does not mean that they have nothing to contribute, but rather that that contribution will only ever be relatively minor and so it is undesirable for these factors to monopolize the political debate. On top of that, such estimates are always shrouded in uncertainty and in the past have by no means consistently proven realistic (see also the discussion earlier in this chapter).

Is Improving Efficiency Enough?

A commitment to efficiency is important for the sustainability of our health and social care system, and will remain so. But even in an optimistic scenario, the yields to be gained from measures in this domain are almost always disappointing. Quite apart from triggering side-effects that are sure to affect staffing and societal sustainability, the bottom line is that the sustainability potential of efficiency-promoting policies is simply not sufficient to meet the challenge we face. After all, their total combined financial effect corresponds to no more than a year’s worth of growth in the sector.Footnote 70 Of course, their yields can be supplemented through measures in other areas—updated framework agreements as a basis for stricter budgetary control, for instance, or measures from the “greater personal control” scenario, in which more limited collective entitlements (to residential and long-term care, for example) and health insurance cover are accompanied by higher or means-tested direct charges. These, however, are more matters of allocative choice (what do we offer collectively and what not?) than efficiency—a topic we consider in more detail in Part 3 of this report.

Key Points—Improving Efficiency Within the Current System

  • International comparative evidence suggests that multiple care buyers and more decentralized organization of the healthcare system are associated with lower efficiency.

  • Efficiency within the system can be improved through greater differentiation in care procurement, through better design of the care landscape where relevant and by giving care providers the space, trust and time they need to experiment.

  • A commitment to efficiency is important, but on its own is not enough to resolve the sustainability challenge facing health and social care.

5.4 Conclusion: A Commitment to Efficiency Is Essential But Not Enough

In this chapter we have looked at “sustainability through efficiency” in health and social care. And we have concluded that improving efficiency alone is highly unlikely to adequately address the threefold sustainability challenge we face in this domain. Figure 5.2 illustrates this point: we can make the sector more efficient and thus deliver more care with the same people and resources (topping up the dark blue “fluid” with the light blue), but not enough to meet future demand (the fluid still does not fill the jar).

Fig. 5.2
An illustration depicts a beaker that labels the levels such as demand for care, quantity of care deliverables with successful efficiency drive, and quantity of care deliverables at low efficiency.

A commitment to efficiency is important but not enough

So a commitment to greater productive efficiency on its own is insufficient to tackle the huge task ahead. Its potential yields are simply not enough. This by no means implies that we should abandon our efforts to improve efficiency—that remains a key part of the solution, not only because it helps to mitigate the scale of the challenge in the financial and staffing dimensions but also because it is crucial for societal sustainability. As shown in Chap. 3, public opinion is very much opposed to waste in health and social care and the prevailing thinking is that far too much money already goes to the “wrong” things. It is up to government and the sector itself to visibly fight wastage to the best of their ability in order to maintain broad support for our system. For both politicians and the public, however, it is highly tempting to regard a greater efficiency alone as the answer to all the sector’s problems. Cutting down waste is always desirable, after all, and nobody is against it. That is also why the focus of this report is not ways to make care more efficient. Instead, we shall argue later on—after first addressing the issue of staffing sustainability in more detail—that a commitment to allocative efficiency, to making choices and setting priorities, is what is really needed to safeguard the future quality and accessibility of health and social care in the Netherlands.