IDEAS home Printed from
   My bibliography  Save this article

Does managed competition constrain hospitals' contract prices? Evidence from the Netherlands


  • Douven, Rudy
  • Burger, Monique
  • Schut, Frederik


In the Dutch health care system, health insurers negotiate with hospitals about the pricing of hospital products in a managed competition framework. In this paper, we study these contract prices that became for the first time publicly available in 2016. The data show substantive price variation between hospitals for the same products, and within a hospital for the same product across insurers. About 27% of the contract prices for a hospital product are at least 20% higher or lower than the average contract price in the market. For about half of the products, the highest and the lowest contract prices across hospitals differ by a factor of three or more. Moreover, hospital product prices do not follow a consistent ranking across hospitals, suggesting substantial cross-subsidization between hospital products. Potential explanations for the large and seemingly random price variation are: (i) different cost pricing methods used by hospitals, (ii) uncertainty due to frequent changes in the hospital payment system, (iii) price adjustments related to negotiated lumpsum payments and (iv) differences in hospital and insurer market power. Several policy options are discussed to reduce variation and increase transparency of hospital prices.

Suggested Citation

  • Douven, Rudy & Burger, Monique & Schut, Frederik, 2020. "Does managed competition constrain hospitals' contract prices? Evidence from the Netherlands," Health Economics, Policy and Law, Cambridge University Press, vol. 15(3), pages 341-354, July.
  • Handle: RePEc:cup:hecopl:v:15:y:2020:i:3:p:341-354_4

    Download full text from publisher

    File URL:
    File Function: link to article abstract page
    Download Restriction: no


    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 6th July 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-07-06 11:00:00


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Chandeni S. Gajadien & Peter J. G. Dohmen & Frank Eijkenaar & Frederik T. Schut & Erik M. Raaij & Richard Heijink, 2023. "Financial risk allocation and provider incentives in hospital–insurer contracts in The Netherlands," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(1), pages 125-138, February.
    2. Peter Dohmen & Martin Ineveld & Aniek Markus & Liana Hagen & Joris Klundert, 2023. "Does competition improve hospital performance: a DEA based evaluation from the Netherlands," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(6), pages 999-1017, August.
    3. Moura, Ana, 2021. "Essays in health economics," Other publications TiSEM c93abd22-fa4a-42a5-b172-d, Tilburg University, School of Economics and Management.
    4. Chiara Brouns & Rudy Douven & Ron Kemp, 2021. "Prices and market power in mental health care: Evidence from a major policy change in the Netherlands," Health Economics, John Wiley & Sons, Ltd., vol. 30(4), pages 803-819, April.
    5. Sandra Sülz & Holger Wagenaar & Joris van de Klundert, 2021. "Have Dutch Hospitals Saved Lives and Reduced Costs? A longitudinal patient‐level analysis over the years 2013–2017," Health Economics, John Wiley & Sons, Ltd., vol. 30(10), pages 2399-2408, September.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:hecopl:v:15:y:2020:i:3:p:341-354_4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.