Update 2 April 2024

Update 2 April 2024

I hope that you have all had a nice Easter weekend (for those of you in Norway – an Easter week). This update covers the following news items:

  • An overview of commercial primary-care practices. How large a factor are they in the market?
  • More hospitals are starting with specialized clinics to meet competition from commercial chains. What are the likely consequences?
  • New system for financing medical home care. How will it work?

Overview of commercial primary-care practices

In earlier updates we have written about ongoing discussions related to companies developing commercial primary care chains. One of the challenges related to understanding the ongoing developments in the primary care sector has been that there is little or no structured information on ownership forms. NIVEL (Netherlands Institute for Health Services) has recently analyzed the sector and has published an interesting overview of the ownership forms.

The main conclusion of the study is that commercial chains currently have a small position in the primary care market. There are currently 4.847 General Practitioner (GP) locations in the Netherlands. Approximately 238 of these locations are part of a chain (5%). However, 122 of these locations are part of 14 GP-chains that are organized as non-profit foundations. The remaining 116 GP-locations are owned by 34 commercial chains. This gives a market share 2.4% and a small average size per chain for commercial chains. This shows that there is still a long way to go compared to the dental sector, where 13% of the locations are part of a chain.


More hospitals developing “specialized clinics”

We have in earlier updates written about hospitals developing news brands and processes to compete against commercial specialized clinics. This is a growing trend, and there are currently eight hospitals that have developed similar approaches. The key driver is to limit the loss of patients to specialized commercial clinics and to ensure that the regional hospitals have enough revenues to remain viable. The typical approach is to move plannable high-volume care to a separate wing of the hospital or even to a new location and put in place efficient processes leading to improved patient related quality. The typical goal is to guarantee patients an initial consultation within two days and treatment within ten days.

The new approach typically leads to a substantial reduction in the time that patients have to wait for treatments (typically from 120 to 20 days). The hospitals claim that the new way of working is financially attractive, as they are able to conduct increased volumes of operations. Healthcare insurance companies are happy, as they see waiting times for patients decreasing and, in some instances, are able to pay the hospitals less for each treatment.

This process also shows the value of competition, as it turns out that the traditional hospitals can dramatically improve their quality of service when forced to do so by patients choosing better alternatives. It will be interesting to see what the effects are for the commercial specialized clinics. Will they see a loss of market share as patients continue using the regional hospitals?


New system for financing medical home care

In the coming years there will be a growing need for medicalized home care due to the coming robust growth in the elderly population and the growing pressure from the government to keep elderly clients away from (expensive) nursing homes. The current “official” financing methodology for medicalized homecare is a complex system of paying for specific activities measured in increments of five minutes. However, this “official” system has for the last few years been replaced by an “experimental” financing form where medicalized home care is financed by hourly tariffs for a limited number of standard services. Key advantages of this system are that it gives care professionals more flexibility in providing the exact services needed by the client and reduces the need for administrative activities.

In the Dutch system experiments and pilots are time-limited and the pilot financing scheme officially stopped at the end of 2022. Therefore a new system has been developed (but still officially as an experiment) for the period 2024 to 2028. The new system is similar to the previous system, but adds a new dimension of client profiling based on the client’s (and the client’s network) ability to conduct activities independently. This will help in deciding which and how much care to provide. This is not meant to change decisions related to how much assistance individual clients will receive but will only be used on a macro level. Most healthcare providers and ACTIZ (trade organization of the incumbent healthcare organizations) are positive to the new system as they believe that it keeps the advantages of the previous financing system but will also improve their ability to compare patient groups and increase cooperation across healthcare organizations.