Healthcare of the future: better and less expensive

Accelerating and scaling up healthcare innovation

There is an urgent need to innovate. Costs are expected to continue to rise, and – if we do nothing – the labour market will be unable to meet the staffing requirements. The Netherlands' strong starting position on quality, accessibility, solidarity and total costs offers no guarantee for the future. An important challenge in accelerating and scaling up the transformation to meaningful care is to create the right conditions for providers, new entrants and financiers. Healthcare covers various activities with various goals, definitions of quality and specific 'dynamics'. There is no 'one size fits all' solution. To find solutions, we need a more specific approach: 

The introduction of stronger central control of cooperation in acute care 

Acute care means stabilising the patient as quickly as possible. Staff, a bed and resources must be ready as soon as the patient needs care. This can be a complex problem, especially if there are shortages on the horizon. Central control is vital to properly distributing the available resources.

The management role goes beyond the distribution of materials, as it is also needed in the allocation of the patients. Hospitals – as well as out-of-hours surgeries and mental health crisis services – need to talk about the critical (and expensive) infrastructure needed for good patient care for each region. Since hospitals are not accustomed to this dialogue, the ministry will need to encourage it without dictating the outcomes.

Without any central control and proper consultation, acute care faces a dangerous paradox, where the sickest patients are at risk of not receiving the best possible care. Acute care is often unprofitable for healthcare organisations because the costs exceed the direct revenues. In practice, we see that hospitals that invest in acute care have less follow-up care, which also reduces their income. These dynamics remove the incentives for healthcare organisations to invest in better acute care. We can overcome this by paying for acute care based on availability, in combination with regional agreements. That would enable care organisations to invest in the best care for the sickest patients.

Our advice is to task one party with organising acute care in order to strike the right balance between quality, patient satisfaction, accessibility and total acute care costs. Give this party overriding authority and encourage funding based on availability so that providers have an incentive to invest in acute care, with the financier providing a counterbalance.

Create freedom for innovation in elective and chronic care 

Elective care involves advice, treatment and guidance. Some of this care has been delayed in recent months. We can set up online remote care to catch up with this as soon as possible. We must reduce unnecessary care. Patients could also be given a more significant role in decisions about their treatment. Well-informed patients make a different choice from the doctors in twenty to thirty per cent of cases, e.g. opting for physiotherapy rather than surgery.

Despite the consensus on how solutions should be sought, this proves to be difficult in practice. New parties often come up with ideas for better care. They need more freedom to carry through their ideas with existing care providers or to provide care themselves. Health insurers are free to contract and promote new care. We need to retain this, scale up demonstrably better care and offer it in other areas.

Our advice is to retain both the regulated market mechanism – which gives healthcare providers incentives to raise quality at a lower cost – and health insurers' freedom to scale up tried-and-tested healthcare and introduce new innovative business models.

Give financiers an incentive to work across domains

In practice, the problem of barriers within care domains and between the care domain and the social domain in the current system (the Medical Research (Human Subjects) Act (Wmo), the Healthcare Insurance Act (Zvw) and the Long Term Care Act (Wlz)) is a significant obstacle to support for vulnerable citizens. Initiatives that generate costs in one domain but yield savings in another struggle to get off the ground.

We are trying to break through barriers with various parties in regional 'test beds for learning' for the elderly and people with mental health problems and disabilities. These test beds for learning are intended to improve quality of life, promote participation, reduce social costs and tackle labour market issues. There are three critical problems here: a lack of direction, little scope to experiment and a limited number of payment schemes.

The involvement of health insurers, the municipality, the care provider and the care administration office will be needed to create cross-domain initiatives in a region, such as for people with dementia in the Social Trials. Financiers and providers are often sympathetic to the idea of jointly considering the development of cross-domain initiatives. However, there is little scope for action in practice, and others are often expected to make the first move. 

Nor is there any scope for cross-domain experimentation, and grant programmes often prove unsuitable. Moreover, the use of existing resources is subject to strict conditions. This results in initiators going through a frustratingly long process to get all the parties to commit. The payment schemes in the current domains do not sufficiently match the needs of clients.

Our advice is to create the scope needed to experiment with cross-domain initiatives. Learn, evaluate and facilitate scale-ups. Focus on a 'fluent' customer journey, from diagnosis to post-recovery or death. Use Wlz funds preventively, create incentives and budgets for municipalities to allow people to live at home for longer and use 'work' as a medicine.

Provide space, but also remove disincentives from the system 

A focused and nuanced look at where and how our care can be improved also entails removing incentives in the system that stand in the way of better care. Independent specialists have an incentive to treat, for example. That incentive has to go. This can be done by having specialists consider becoming salaried employees and having targeted agreements made between hospitals and medical specialist companies. We also see in practice that investments in better healthcare are more likely to prove possible when healthcare providers are given a multi-year budget in consultation with insurers.

Facilitate the playing field with suitable regulations

At regional level, we need to develop and implement new solutions, but there is a lack of direction and appropriate incentives. There is a need for more integration, scope for action and binding effect. We need clear rules, a division of tasks and responsibilities and a clear governance structure within regional cooperation. 

A cooperation agreement or the establishment of a coordinating entity has a facilitating effect. We need to translate the 'regional deal' into concrete activities by care providers. This entity must have overriding authority. We can encourage this by explicitly including this structure and division of tasks in legislation such as the Zvw. We must remove tax obstacles as far as possible. Unnecessary VAT pressure hampers many initiatives. Staff mobility is not getting off the ground. The outsourcing of activities is being impeded. Innovation and prevention lead to unwanted tax liabilities for healthcare providers, and the increased use of existing staff could lead to the loss of essential allowances.

Preserving the accessibility and affordability of medicines

The Netherlands spent approximately €6.7 billion on medication in 2018, of which €2.3 billion was spent on expensive medication under the MSZ. Between 2012 and 2018, the share of medicines in total expenditure on medical-specialist care rose from 6.8 to 9.5 per cent. We expect this increase to continue, resulting in declining budgets for 'other' MSZ costs. The government and health insurers are committed to curbing expenditure on expensive medication. 

Medicine procurement

Excessive pressure on the price level could make the Netherlands less attractive as a sales market. Pharmaceutical companies sell medication in countries where they can achieve the highest margin. They are also wary of agreeing (excessively) low prices with one country, as this could lead to price pressure in others. To reduce costs, it seems logical to aim not only for lower prices but also lower volumes. This could be an attractive option for pharmaceutical companies because they can offer security of supply at competitive prices. This approach does require a complex interplay between insurers and hospitals.

New form of cooperation

The complexity involved in reducing volumes is that the parties involved have significant but incompatible financial interests. The challenge is to align interests more closely. Although the context differs for each type of medication (e.g. add-on, specialist, non-specialist), the complexity is more or less the same everywhere:

• Providers (hospitals and pharmacies) have little or no incentive to save on social costs. Price agreements (volume discounts) with pharmacists do not stimulate lower volumes. 

• Patients generally stick to the current dosage because they see no scientific evidence that lower dosage leads to the same quality outcomes.

• In the context of medication, insurers have insufficient information to manage both price and volume effectively. Providers often cannot share information about prices due to confidentiality obligations or competition rules. 

These criteria result in high social costs for medication. We recommend a setting where providers and insurers work together to reduce volumes through shared savings agreements. These have to generate a margin so that a decrease in volume does not lead to suppliers suffering adverse financial consequences. A third party - who has an insight into providers' interests but is also instructed by insurers to reduce total costs - will need to oversee this.

Once the preconditions have been created, the time will have come to take advantage of savings opportunities. We can organise this by asking specialists and pharmacists to contribute ideas to an investment committee based on their professional knowledge. If the committee approves an idea and renames it an initiative, the proposer receives funding to pay for the pilot and publish the results. That way, we encourage effective research and lay the foundations for rolling out successful interventions more widely. 

Addressing labour market issues

If the policy remains unchanged, care volumes will continue to rise due to technological advances, sub-specialisation and the corresponding minimum scale and increasing quality requirements. By focusing on meaningful care, we can reduce volumes: examples from Bernhoven and Rivas show that twenty per cent lower volumes are possible in the hospital setting. Commitment to meaningful care – in which we apply differentiation to the care setting touched on above – is a significant turning point in tackling the labour market problem.

The use of 'new' and 'diverse' professionals in care and support is of great importance, as are good connections between formal care and informal care. Professionals without a care background carry out a significant proportion of the work in the Social Trials for people with dementia and their next of kin. Students, volunteers and asylum permit holders also provide support. They are very well able to connect to the needs of people with dementia and their families using the Social Approach to Dementia; they do not have to 'unlearn' anything.

However, we do experience significant barriers to claiming expenses for the care and support of these 'new' professionals on existing payrolls. For that reason we call for the deployment of skilled professionals with no healthcare background and experience experts (also in care for the elderly) to be facilitated in the current payment schemes. 

Finally, the work must elicit the appropriate appreciation and reward. This should not only take the form of paying extra wages but should involve improving the work experience and, for example, adapting the allowances system. As things stand, extra work often does not yield enough net income because of the loss of allowances. Revising the allowances system could contribute to counteracting staff shortages in the care sector. Our advice: make sure that it really pays to work more in healthcare!