July 25, 2011

General hospitals in financial distress; Reconsidering government intervention

The Dutch government is currently engaged in reconsidering its role in hospital bankruptcies. Even though the continuity of health care is considered as an important public goal, it is acknowledged that government support creates substantial inefficiencies in bankruptcy procedures.

Therefore, the government is currently discussing several relating dossiers. One considers the above mentioned continuity of health care and the potential role of the government in it. A second dossier is about releasing the non-profit constraint of hospitals. Finally, the government has been constantly reconsidering the financing of hospitals and medical specialists. In this document, we reflect on these documents and evaluate the suggested policy measures from the perspective of (optimal) hospital bankruptcies.