Financial incentives matter. If one had to give economists (and health economists as well) a slogan, this would be it.
In 2006, the Netherlands instituted a form of managed competition. According to Van Dijk et al (2012) ”Before 2006, inhabitants had either compulsory social (sickness fund, 62%) or voluntarily private (36%) health insurance depending, among others, on income (below a gross annual income of €33 000 people were socially insured). This combined system of social and private health insurance was replaced by a compulsory single universal basic health insurance covering a legally deﬁned package of basic beneﬁts including GP care. GPs act as gatekeepers for secondary care…”
The implementation of a managed competition system in the Netherlands cause two major changes to the primary care payment system. First, cost sharing was abolished for privately insured individuals. Second, whereas previously doctors treating socially-insured patients received a capitation payment and physicians treating privately-insured beneficiaries received a fee-for-service payments, after 2006 all physicians received a mixed capitation/fee-for-service payment system.
How did these changes affect the number of primary care visits in the Netherlands? The authors of the study used a sample of GP practices participating in the 2005-2007 Netherlands Information Network of General Practice (LINH) study to conclude the following:
“Abolition of cost sharing led to a higher increase in patient-initiated utilisation for privately insured consumers in persons aged 65 and older. Introduction of fee-for-service for socially insured consumers led to a higher increase in physician-initiated utilisation.”
- van Dijk, C. E., van den Berg, B., Verheij, R. A., Spreeuwenberg, P., Groenewegen, P. P. and de Bakker, D. H. (2012), MORAL HAZARD AND SUPPLIER-INDUCED DEMAND: EMPIRICAL EVIDENCE IN GENERAL PRACTICE. Health Economics. doi: 10.1002/hec.2801