Stéphanie van der Geest

Price asymmetry in the Dutch retail gasoline market

Abstract This article analyses the retail price adjustments in the Dutch gasoline market. We estimate an asymmetric error correction model on weekly price changes for the years 1996–2001. We construct five datasets, one for each working day. The conclusions on asymmetric pricing are shown to differ over these datasets, suggesting that the choice of the day for which the prices are observed matters more than commonly believed. In our view, the insufficient robustness of the outcomes might explain the mixed conclusions found in the literature. Using these two approaches, we also show that the effect of asymmetry on the Dutch consumer costs is negligible.

Do patients choose hospitals with high quality ratings? Empirical evidence from the market for angioplasty in the Netherlands

A necessary condition for competition to promote quality in hospital markets is that patients are sensitive to differences in hospital quality. In this paper we examine the relationship between hospital quality, as measured by publicly available quality ratings, and patient hospital choice for angioplasty using individual claims data from a large health insurer. We find that Dutch patients have a high propensity to choose hospitals with a good reputation, both overall and for cardiology, and a low readmission rate after treatment for heart failure. Relative to a mean readmission rate of 8.5% we find that a 1%-point lower readmission rate is associated with a 12% increase in hospital demand. Since readmission rates are not adjusted for case-mix they may not provide a correct signal of hospital quality. Insofar patients base their hospital choice on such imperfect quality information, this may result in suboptimal choices and risk selection by hospitals.

Why do patients bypass the nearest hospital? An empirical analysis for orthopaedic care and neurosurgery in the Netherlands

Using data for 2003, we find that both for non-emergency orthopaedic care (38%) and neurosurgery (54%) numerous Dutch patients did not visit the nearest hospital. Our estimation results show that extra travel time negatively influences the probability of hospital bypassing. Good waiting time performance by the nearest hospital also significantly decreases the likelihood of a bypass decision. Patients seem to place a lower negative value on extra travel time for orthopaedic care than for neurosurgery. The valuation of shorter waiting time also varies between these two types of hospital care. A good performance of the nearest hospital on waiting time decreases the likelihood of a bypass decision most for neurosurgery. In both samples, patients are more likely to bypass the nearest hospital when it is a university medical centre or a tertiary teaching hospital. Patient attributes, such as age and social status, are also found to significantly affect hospital bypassing. From our analysis it follows that both patient and hospital care heterogeneity should be taken into account when assessing the substitutability of hospitals.

Assessing hospital competition when prices don’t matter to patients: the use of time-elasticities

Health care reforms in several European countries provide health insurers with incentives and tools to become prudent purchasers of health care. The potential success of this strategy crucially depends on insurers’ bargaining leverage vis-à-vis health care providers. An important determinant of insurers’ bargaining power is the willingness of consumers to consider alternative providers. In this paper we examine to what extent consumers are willing to switch hospitals when they are fully covered for hospital services, which is typical for many European countries. Since prices do not matter to these patients, we estimate time-elasticities to assess hospital substitutability. Using data from a large Dutch health insurer on non-emergency neurosurgical outpatient hospital visits in 2003, we estimate a conditional logit model of patient hospital choice taking both patient heterogeneity and hospital characteristics into account. We use the parameter estimates to simulate the demand effect of an artificial increase in travel time by 10% for every patient, holding all other hospital attributes constant. Overall, the resulting point estimates of hospitals’ time-elasticities are fairly high, although variation is substantial (−2.6 to −1.4). Sensitivity tests reveal that these estimates are very robust and differ significantly across individual hospitals. This implies that all hospitals in our study sample have at least one close substitute which is an important precondition for effective hospital competition.

Pharmaceutical policy in the Netherlands: from price regulation towards managed competition.

PURPOSE To analyse the development of pharmaceutical policy in the Dutch market for outpatient prescription drugs since the early 1990s. METHODOLOGY A literature review and document analysis is performed to examine the effects of pharmaceutical policy on the performance of the Dutch market for outpatient prescription drugs since the early 1990s. FINDINGS Government efforts to control prices of pharmaceuticals were effective in constraining prices of in-patent drugs, but had an opposite effect on the prices of generic drugs. The gradual transition towards managed competition--that particularly gained momentum after the introduction of the new universal health insurance scheme in 2006--appears to be more effective in constraining prices of generic drugs than earlier government efforts to control these prices. ORIGINALITY Comparative analysis of the impact of price regulation and managed competition on generic drug prices in the Netherlands. IMPLICATIONS Implications of the changing role of health insurers are discussed for the future market for prescription drugs and role of pharmacies in the Netherlands.

Using the deductible for patient channeling: did preferred providers gain patient volume?

In market-based health care systems, channeling patients to designated preferred providers can increase payer’s bargaining clout, other things being equal. In the unique setting of the new Dutch health care system with regulated competition, this paper evaluates the impact of a 1-year natural experiment with patient channeling on providers’ market shares. In 2009 a large regional Dutch health insurer designated preferred providers for two different procedures (cataract surgery and varicose veins treatment) and gave its enrollees a positive financial incentive for choosing them. That is, patients were exempted from paying their deductible when they went to a preferred provider. Using claims data over the period 2007–2009, we apply a difference-in-difference approach to study the impact of this channeling strategy on the allocation of patients across individual providers. Our estimation results show that, in the year of the experiment, preferred providers of varicose veins treatment on average experienced a significant increase in patient volume relative to non-preferred providers. However, for cataract surgery no significant effect is found. Possible explanations for the observed difference between both procedures may be the insurer’s selection of preferred providers and the design of the channeling incentive resulting in different expected financial benefits for both patient groups.