Academic Articles

What are hospitals like in the Netherlands?  A paper by Blank and Van Hulst (2009) give some insight.  The paper studies Dutch general hospitals.  These hospitals make up 80% of beds on 70% of hospital costs.  Non-general hospitals include academic hospitals and specialty hospitals (e.g., eye clinics and rehabilitation clinics).

Hospitals in the Netherlands

“Hospitals, like other health-related institutions in The Netherlands, are owned and operated predominantly by locally controlled, private not-for-profit foundations (stichtingen).” [Saltman and de Roo (1989)]  The hospital sector in general is highly regulated.  Provider wages are regulated.  The central government regulates capacity and provides prospective payment budget.

“Budgets consist of a fixed component related to capacity and a variable component related to production. The fixed component is based on the so-called adherence (the number of patients potentially using the hospital), the number of beds, and the number of associated physicians. The production related component is based on regional agreements on the numbers of first-time visits, inpatient days, daycare patient days, and the number of discharges.”

Severity of cases and the type of specialists on staff can also affect budgets as well.  This budget, however, is a legal and not a monetary measure.  Insurance companies pay the hospital through prices set by the Central Tariffs Health Care agency.  Hospitals can not make a profit, but surplus revenue can go towards capital improvements.

“Another important feature of the Dutch hospital sector is that hospitals cannot choose their patients.Patients are referred to a hospital by general practitioners. They choose a hospital with a convenient location compared with other hospitals and based on availability of the appropriate specialties.Hospitals are obliged to treat any patient presented to them, provided that they have the medical knowledge required for the treatment. In practice, hospitals can attract patients by supplying particular specialties or a high quality of care. This implies that expansion of high-tech medical treatments may be another goal.”

Statistics and Trends

Statistics on the Dutch hospital industry can be found in this table.  We see that the number of general hospitals decreased from 109 in 1995 to 89 2002.  This was due to both closures and mergers.  First-time hospital visits increased at an annual rate of 4% per year, but the number of inpatient days decrease by about 4% per year.  This indicates a trend towards fewer overnight hospital stays.  Overall, costs rose by more than 6% per year in nominal terms or about 4% in real terms.

• Blank JLT, Van Hulst BL (2009) “Productive innovations in hospitals: an empirical research on the relation between technology and productivity in the Dutch hospital industry” Health Economics, Volume 18 Issue 6, Pages 665 – 679
• Saltman RB, de Roo AA (1989) “Hospital Policy in The Netherlands: The Parameters of Structural Stalemate” Journal of Health Politics, Policy and Law, Vol. 14, No. 4, Winter 1989

Yesterday, I attended a lecture by Peter Wagner about grant-writing.  The talk focused on grants in the sciences, and I will pass on Dr. Wagner’s advice to my loyal readers.

Three Golden Rules

• After writing each section of the grant, re-read it as if you were a reviewer.
• Finish the grant application at least 2 weeks before the due date.
• Put the grant away for at least 1 week. Then go back and re-read it.

Other helpful tips

• You proposal will be valuable if it is: 1) novel and can contributes significant knowledge to the field, 2) is technically feasibly and uses sound methodology, 3) can test your hypothesis as definitely as the state of the art permits.
• The abstract is the most important part of your grant application. Make sure it is concise and generates interest in your project even among those who are not specialists in your field. Be sure reviewers can easily answer the question “Who cares?” when reading over the grant application. Also, do not put any references in the abstract.
• For the sciences, the objective of your grant application should be the additional knowledge you wish to be gained from the study. The specific aims are the broad steps that need to be accomplished in order to accomplish your objective. For instance, if going to Seattle for a conferences is your goal, then the specific aims would be: book a flight, reserve a hotel room, register for the conference, etc.
• Dr. Wagner recommends that in the Methods section, the subheadings should relate to each specific aim.  For instance, “Experimental Design for Specific Aim 1.”
• Your literature review should be concise but also display that you have an understanding of the field.  Be sure to include all major papers in the field.  Also, include papers whose methodology you will use or will expand in your methodology.  If possible, check who will be on the reviewing committee.  If a reviewer has published papers that are relevant to your area of study, be sure to cite them in your grant application.
• Be sure to justify your budget.  Do not say “15% of Joe Blogg’s time is required therefore 15% of salary is requested.”  Instead, spell out in detail the time requirements including set-up, execution, data analysis and writing up the finished product.  Also, justify expenses for equipment, supplies and travel.  If you can’t answer the question “Why couldn’t you have done this for 80% of the budget you are proposing,” then you have not sufficiently justified your budget.

See also: Wagner (1991) “On writing a grant application. A personal view.” Physiologist. 1991 Apr;34(2):29-31.

Mechanics not only diagnose what your car needs, they also fix it.  Doctors also both diagnose and treat the patient.  Both of these cases are examples of credence goods.

A working paper by Frankel and Schwarz (2009) looks at the economic environment where uninformed customers rely on experts to both diagnose and treat their problems. If experts can earn more money doing high margin procedures, then customers may not receive appropriate treatment.  However, experts must also take into account how doing unnecessary treatments will affect their reputation.

“In the 1950s, Bower was summoned to Los Angeles by billionaire Howard Hughes, who wanted him to study Paramount Pictures…. But Bower sensed that nothing good could come of working for Hughes. He found the entrepreneur’s approach to business ‘so unorthodox and so unusual’ that he felt he would never be able to help Paramount. Instead of taking the assignment and reaping a big fee, he walked away. The move was classic Bower. He built McKinsey into a global consulting powerhouse by insisting that values mattered more than money” (Byrne (2003)). In other words, by publicly rejecting a profitable action, McKinsey increased its future business. 

Because of reputational concerns within a  in a repeated game framework, the authors show a truthful equilibrium will emerge.  ”The promise of future business removes the incentive to play major treatments over minor ones. Customers only need to look at the most recent action taken. If it was a minor treatment, they return to the last period’s expert with high probability. If it was a major treatment, they return with a low probability.”

• Frankel and Schwarz (2009) “Experts and Their Records” NBER Working Paper #14921.

A study looking at the effect of the Great Famine:

“Our results indicate that in-utero and early childhood exposure to famine had large negative effects on adult height, weight, weight-for-height, educational attainment and labor supply.”

Not a shocker.