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2023-2024, Block 5 GW4009MV. Healthcare Procurement & Value Chain ManagementWEEK 17
Inhoud
Workshop 3: Contract forms (23-4-2024).........................................................................................................2
3 main contract types...............................................................................................................................4
Lecture 4. Sustainable healthcare (26-4-2024).................................................................................................6
Part 1: Ecological sustainability (Van Raaij)...................................................................................................6
Scope 1-2-3...............................................................................................................................................6
Methods for impact analysis.....................................................................................................................8
Life Cycle Assessment...........................................................................................................................8
Material Flow Analysis..........................................................................................................................9
Waste Audit........................................................................................................................................10
Care pathway analysis........................................................................................................................10
Examples of interventions.......................................................................................................................11
Part 2: the role of the insurer: Integral Care Agreement (IZA) in practice (Knoternerus, VGZ)...................14
Growing demand................................................................................................................................15
Transformations..................................................................................................................................15
Literature........................................................................................................................................................20
For workshop 3:..........................................................................................................................................20
XII. Duran et al. (2005) – Chapter 9: Purchasers, providers and contracts..............................................20
Types of Contracts...............................................................................................................................20
The contracting process......................................................................................................................24
SUMMARY & CONCLUSIONS...............................................................................................................25
For lecture 4:...............................................................................................................................................27
XIII. Hinrichs-Krapels et al. (2022). Towards sustainability for medical devices and consumables..........27
XIV. Maarse & Jeurissen (2024). Healthcare reform in the NL: after 15yrs of regulated competition....29
The impact of the reform....................................................................................................................29
A more hybrid system.........................................................................................................................32
1
,2023-2024, Block 5 GW4009MV. Healthcare Procurement & Value Chain Management
Workshop 3: Contract forms (23-4-
2024)
Preparation:
1. Read the assigned book chapter: chapter 9.
2. Fulfil the assignment (version A, B, C or D) according to the allocation file posted below.
3. Submit your assignment, via Canvas, before Tuesday 23 April, 9:00.
4. Bring your answer to the workshop, so that you can refer to your work in the session.
Learning objectives:
1. You can distinguish the different basic contract types and different risks.
2. You understand the opportunities and limitations of performance incentives in healthcare
procurement contracts.
Notes during the workshop:
Healthcare purchasing process 2024:
Your contract choices (whole cohort):
For a hospital: If volume is rewarded, that is nice for you as a hospital since you get an incentive to provide
care/increase acitvity levels, but only if you have capacity to provide a high volume of care. Then, another
incentive that would be nice is stability & predictability: you can plan ahead, you know how much money
you will get and make plans based on that.
From a hospital point of view, they expected more preference for cost-per-case, while from an insurer point
of view it is logical that the cost-per-case contract is not preferred.
For an insurer: Predictability is also nice for an insurer. And it is nice when the costs are contained, profit is
made at the end of the year, risks should be managed (it should not be open-ended or without cap).
2
,2023-2024, Block 5 GW4009MV. Healthcare Procurement & Value Chain Management
If you want to earn money by doing more cost-per-case.
Predictability as main goal block goal.
Case 1: Complex oncological care
The intention of us was to say: the hospital is too small, so the insurer didn’t trust them to provide this type
of care: ‘when you can’t reach the volume threshold, you can’t deliver good quality care’.
Even if the hospital is reluctant to stop this type of care, they still want some money for ‘afbouwen’, for the
investments they made for fixed costs. Therefore, they could argue to get some compensation/buffer for
the costs they made before they were mandated to stop.
Why would an insurer agree with such a buffer? (Assuming there is enough capacity in the region for this
type of care.) To keep the hospital afloat. They just want them to stop providing this high complex
oncological care, but they don’t want to lose/bankrupt the whole hospital. Then they might still look for
some cost-and-volume contract (progressively decrease the volume).
The hospital also might think: ‘we want to keep it’ and then a cost-and-volume or cost-per-case contract
would come into play.
So 2 different starting points: the hospital trying to keep it vs. the hospital accepting it, but wanting a buffer.
Case 2: E-Health
It looks like both parties want to increase the use of E-Health, therefore the volume of this use should be
stimulated in and by the contract. Therefore a cost-and-volume or a cost-per-case are most logical. We want
to stimulate the Q (as opposed to the P in PxQ).
Cost-and-volume: you can put targets in the contract.
Block contract: it would not say anything about volume, while that is the core element of the case. So this is
not a preferred contract in this case.
For a hospital, you limit yourself by choosing for a cost-and-volume contract, because you choose to put a
cap on how much care you are allowed to give.
In times of uncertainty, block contracts become more popular because it is difficult to predict volumes or
prices. So with a block contract it is predictable and certain for both parties: ‘I get/pay X amount and that’s
it’. E.g. in the NL: ‘DBC op weg naar transparantie’ (DOTs, volume contracts), but in the transition period
they implemented a block contract.
3
, 2023-2024, Block 5 GW4009MV. Healthcare Procurement & Value Chain Management
3 main contract types
Adapted from: Gajadien et al. (2022)
In this workshop we will focus on/see examples of:
Open-ended cost-per-case contract: this is without a cap.
o The contract parties will put amounts into the contract, but they are ‘orientation points’.
o Nacalculatie = at the end of the year, we will always re-calculate to settle on the right amounts.
Which either leads to an insurer getting money back from the hospital, or an insurer having to
pay more.
Global budget:
o With a lump-sum: if the hospital spends less than the budget, they can keep the money. But if
they do a lot, they don’t get enough money, unless they have some clause.
o Whatever you agree between hospital and insurer, in the background there is always the DRG-
system. So in the end, when the hospital does not reach the ‘lump sum’, the admin will just
increase the price per DRG to still administratively end up at the amount that is paid by the
insurer. “Ingeval de kosten van zorg niet het maximum bereiken van de overeengekomen vaste
opbrengst, dan worden de prijzen verhoogd, zodanig dat te allen tijde het bedrag van de maximum
overeengekomen vaste opbrengst wordt betaald door de zorgverzekeraar.”
Close-ended cost-per-case contract: this is with a cap. Interestingly, hospitals have ‘doorleverplicht’,
which means that hospitals cannot decline patients who show up at their door, therefore the hospital
bears more risks.
o In the contract it is stated that the hospital is responsible for not exceeding the cap and to
spread out the care throughout the year (as much as possible).
o And the hospital has to contact the insurer when they are coming close to the cap.
o And the hospital needs to contact the insurer for ‘bemiddeling’ when a not-insured person
shows up for care.
The insurer seems to dictate everything to the hospital. The hospital seems to bear the most
risks.
In a non-competitive region, a hospital has more negotiating power than a hospital in a
competitive region.
But these traditional contracts all don’t really incentive
quality of care.
4
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