Seminar: Hospital Competition in the Netherlands
On Tuesday October 1st 2019, Rob van der Noll (ACM) will give a presentation titled: "Hospital Competition in the Netherlands"
The Dutch government introduced managed competition to the health care sector in 2006. In this regulatory framework insurers compete for enrollees and providers compete for contracts with insurers. The resulting contracts are determined by bargaining, which outcome depends on the relative position of the provider. In this paper, we compare how commonly used market power indicators predict bargaining outcomes. We combine 2013 transaction data with bilateral contract data. Our empirical models explain the relative diﬀerences in hospitals’ revenues while controlling for diﬀerences in the complexity of patients. Four indicators are used: the logit competition index (LOCI), willingness-to-pay (WTP), Elzinga-Hogarty market share and a rule-of-thumb market share. We ﬁnd that WTP and LOCI perform best empirically.