Financial Incentives in Health Care

For years, the costs of health care in The Netherlands have been high and rising, but still no durable solution for this problem has been found. This study constructed an overview of payment policies for hospitals and medical specialists in the Netherlands between 1995 and 2016. It compared these payment policies with country-level health care expenditure data to examine the relationship between financial incentives for cost containment in provider payment systems and health care costs, so that lessons could be drawn on what steps can be taken towards better health provider payment systems. The study found that four big changes in the payment systems for hospitals and medical specialists have been introduced over the years. Those changes in payment policies went hand in hand with changes in the health care expenditures as a percentage of Gross Domestic Product (GDP), where health care expenditures as a percentage of GDP were lower when cost containment incentives were stronger, and vice versa. Caution is needed in interpreting these relationships because of data limitations, but these findings suggest that in any future payment system cost containment incentives should be aligned and that it is time to create rest in the health care payment systems.