Regulated markets and rationalised myths: an institutional perspective on value-based purchasing in the Netherlands

In the Dutch health care system of regulated competition, health insurers are assigned the crucial role of prudent purchasers and expected to critically contract providers based on the quality and prices of their services. Thus far, however, these organisations have struggled to fulfil this role. This study sheds new light on the purchasing behaviour of Dutch health insurers. We examine how insurers perceive the context in which the value-based purchasing of hospital care should take shape, and we draw on insights from institutional theory to frame our analysis. Our findings are based on a series of semi-structured interviews (n = 18) with employees and representatives of several insurer companies whose combined market shares add up to over 90 per cent of all premium payers. Our analysis highlights an environment in which market mechanisms are tangled up with historically rooted budgeting practices, where insurers are pressured to sustain rather than critique hospitals, and where self-regulating medical professionals are firmly supported by society’s deep-seated belief in the quality of their services. Like many other organisations, Dutch health insurers tend to conform to their institutional environment. While this conformity may aid them in organisational stability and survival, it also restricts their ability to purchase prudently.