Rendering hospital budgets volume based and open ended to reduce waiting lists: Does it work?
In the past decades fixed budgets for hospitals were replaced by reimbursement based on outputs in several countries in order to bring down waiting lists. This was also the case in the Netherlands where fixed global budgets were replaced by budgets that are to a large extent volume based and in practice open-ended. The objective of this study was to examine the effectiveness of this Dutch policy measure, which was implemented in 2001. We carried out a statistical analysis and interpretation of trends in Dutch hospital admission rates. We observed a significant turn in the development of in-patient admission rates after the abolition of budget caps in 2001: decreasing admission rates turned into an internationally exceptional increase of more than 3% per year. Day care admissions had already been rising explosively for two decades, but the pace increased after 2001. The increase in the number of admissions includes a broad range of patient categories that were not in the first place associated with long waiting times. The growth was attributable for a large part to admissions for observation of the patient and the evaluation of symptoms, not resulting in a definite medical diagnosis. We considered several factors, other than the availability of more resources, to explain the growth: the ageing of the population, making up for waiting list arrears, ditto for "under consumption" of unplanned care and, as to the growth of day care, substitution for inpatient care. However, these factors were all found to fall short as an explanation. Although waiting times have dropped since the change in the budget system, they continue to be long for several procedures. Our study indicates that making available more resources to admit patients, or otherwise an increase in hospital activity, do not in itself lead to equilibrium between demand and supply because the volume and composition of demand are partly induced by supply. We conclude that abolishing budget caps to solve waiting list problems is not efficient. Instead of a generic measure, a more focused approach is necessary. We suggest ingredients for such an approach.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martine Bellanger & Laurent Tardif, 2006. "Accounting and reimbursement schemes for inpatient care in France," Health Care Management Science, Springer, vol. 9(3), pages 295-305, August.
- McGuire, Thomas G., 2000. "Physician agency," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 9, pages 461-536 Elsevier.
- Stoop, Arjen P. & Vrangbaek, Karsten & Berg, Marc, 2005. "Theory and practice of waiting time data as a performance indicator in health care: A case study from The Netherlands," Health Policy, Elsevier, vol. 73(1), pages 41-51, July.
- Mikkola, Hennamari & Keskimaki, Ilmo & Hakkinen, Unto, 2002. "DRG-related prices applied in a public health care system--can Finland learn from Norway and Sweden?," Health Policy, Elsevier, vol. 59(1), pages 37-51, January.
- Sofia Dimakou & David Parkin & Nancy Devlin & John Appleby, 2009. "Identifying the impact of government targets on waiting times in the NHS," Health Care Management Science, Springer, vol. 12(1), pages 1-10, March.
- J. Oostenbrink & F. Rutten, 2006. "Cost assessment and price setting of inpatient care in the Netherlands. The DBC case-mix system," Health Care Management Science, Springer, vol. 9(3), pages 287-294, August.
- Siciliani, Luigi & Hurst, Jeremy, 2005. "Tackling excessive waiting times for elective surgery: a comparative analysis of policies in 12 OECD countries," Health Policy, Elsevier, vol. 72(2), pages 201-215, May.
- Iversen, Tor, 1993. "A theory of hospital waiting lists," Journal of Health Economics, Elsevier, vol. 12(1), pages 55-71, April.
- Davis, Carolyne K. & Rhodes, Deborah J., 1988. "The impact of DRGs on the cost and quality of health care in the United States," Health Policy, Elsevier, vol. 9(2), pages 117-131, April.
- Duckett, Stephen J., 1995. "Hospital payment arrangements to encourage efficiency: the case of Victoria, Australia," Health Policy, Elsevier, vol. 34(2), pages 113-134, November.
- Reinhard Busse & Jonas Schreyögg & Peter Smith, 2006. "Editorial: Hospital case payment systems in Europe," Health Care Management Science, Springer, vol. 9(3), pages 211-213, August.
- Street, Andrew & Duckett, Stephen, 1996. "Are waiting lists inevitable?," Health Policy, Elsevier, vol. 36(1), pages 1-15, April.
- Hanning, Marianne & Spangberg, Ulrika Winblad, 2000. "Maximum waiting time -- a threat to clinical freedom?: Implementation of a policy to reduce waiting times," Health Policy, Elsevier, vol. 52(1), pages 15-32, May.
- Kroneman, Madelon & Nagy, Julia, 2001. "Introducing DRG-based financing in Hungary: a study into the relationship between supply of hospital beds and use of these beds under changing institutional circumstances," Health Policy, Elsevier, vol. 55(1), pages 19-36, January.
- Cullis, John G. & Jones, Philip R. & Propper, Carol, 2000. "Waiting lists and medical treatment: Analysis and policies," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 23, pages 1201-1249 Elsevier.
- Sicilani Luigi & Jeremy Hurst, 2005. "Explaining Waiting-time Variations for Elective Surgery Across OECD Countries," OECD Economic Studies, OECD Publishing, vol. 2004(1), pages 95-123.