Essays on financial incentives in the Dutch healthcare system

This dissertation consists of five essays which shed light on how financial incentives in the Dutch healthcare system affect the behavior of healthcare providers and insured individuals. The chapters show how differences in the design of these financial incentives - even when they are small - can have a large impact on the behavior of providers and insured individuals and can subsequently lead to large differences in outcomes, such as efficiency, patient health, healthcare expenditure, and equity. The first two chapters study how providers in mental healthcare in the Netherlands responded to a newly introduced payment scheme. Chapter 1 shows that this new payment scheme led to unintended effects as it stimulated mental healthcare providers to prolong treatments up to the next tariff threshold. The second chapter builds upon on the first chapter and distinguishes among financially motivated and altruistically motivated mental healthcare providers. The main result is that altruistically motivated did not respond to the financial incentives present in the payment system and that – even though they treated their patients shorter – the patients had larger improvements in health, compared to the patients treated by financially motivated providers. The last three chapters study the impact of different designs, levels, and choice of cost-sharing on the healthcare demand of insured individuals. Chapter 3 compares two cost-sharing schemes, the no-claim rebate and the deductible which have been in place in Dutch healthcare, and shows that the deductible led to a significantly bigger reduction of healthcare consumption than a rebate. Chapter 4 studies whether the difference between insured individuals with and without a voluntary deductible is the result of moral hazard or the result of adverse selection. The last chapter presents a structural microsimulation model which predicts the effects on healthcare expenditure and out-of-pocket payments for a large variety of cost-sharing schemes, including schemes which have not been in place in Dutch healthcare before