The Hospital Market: Financial Incentives for Specialization of Hospital care in the Netherlands

Regulated competition was introduced to contain the increase in health care costs and to maintain a high quality standard. Competition would raise financial incentives to make the provision of health care more efficient. The organization of health care delivery is changing as health care delivery becomes more concentrated. The extent to which financial incentives define the specialization pattern of hospital care in the Netherlands are examined. Financial incentives for specialization can be: reduced competition, economies of scale & profit margin, learning effects & competencies and economies of scope. The conclusion is that hospitals do not seem to focus on financial incentives for specialization. The specialization decision of hospitals seems to be based on a desire to increase, or maintain a high quality standard