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Title: What cause and effects of applying PBC through municipalities in the LTC-market - results of experts interviews.
Authors: Breijer, C.M.
Keywords: PBC
buyer initiated service triad
healthcare procurement
care provider and client councils
Issue Date: 7-Feb-2018
Publisher: Open Universiteit Nederland
Abstract: The continuous growth of healthcare expenditures has spurred repeated discussions on the sustainability of the health system and the need for a major reform. Especially, the long term care market could become unaffordable due to population aging and increased in demand. The reform with the objective to reign in expenditure growth and which upgraded the role of municipalities consists four interrelated pillars: a normative reorientation, a shift from residential to non- residential care, decentralization of non-residential care and expenditure cuts. Upgrading is based on the policy assumption that municipalities are not only best informed about their local area, but also best capable to deliver an efficient, tailor-made and integrated package regarding care services. New ways of health care purchasing may be considered the centrepiece of the market-oriented part of the reform. The arrangement of care services with municipalities as commissioning entity, the multitude of contracted care providers delivering care to end customers is a typical buyer initiated service triad. The specific application of PBC in the LTC-market within a service triad context has not yet been investigated. There is much unclear about the motives and drivers that stimulate municipalities to use PBC. This lead to the following problem statement: What are causes and effects of applying PBC trough municipalities in the LTC-market? Research method The research method was based on a qualitative explorative research strategy. By conducting semi-structured expert interviews 4 research questions and 9 propositions were tested trough observation and analysis of empirical data. Every effort was made to ensure the validity and reliability of this study. The use of semi-structured expert interviews gave the researcher certain flexibility to zoom in on important matters and to identify other factors that were not found in literature. The interview agreements were mainly arranged by an active approach of the researcher own business network. The course of the 7 expert interviews took place in the period of October-November 2017 and an interview guide was used. The conducted expert interviews resulted in about 9 hours of talk time and a considerable amount of text (>200 pages). An audio recording was made of each interview and all transcripts were approved by the expert. Some passages were earmarked as confidential. During or shortly after the interview, some experts provide additional documentation. RQ 1: What are important changes and developments? Municipalities inspired by the new public management theories mentioned mainly changes and developments with respect to substantive care themes, purchasing processes, transformation topics and the emphasis shifting to more client orientation. Care providers mainly reflect on the many and rapidly changes and the administrative burden that this entails with no working support systems. Care providers are confronted with multiple purchasing or funding methods, this in contrast to 1 financier before the reform. RQ 2: What is the role of the service triads? The role of triads makes the game of contracting and performance much more dynamic. Due to political issues or incidents, established relationships within a triad may be subject to considerable change. The new role of the municipalities is challenging. Chain thinking, integrated care demands and a more mutual cooperation are seen as positive effects. Challenging is that municipalities are thinking from composite client interests and the care providers from individual interests. In addition to the client perspective (which is embedded in all contracts) municipalities also must take account to financial interests and local politics. RQ 3: What are motives and drives for municipalities to use PBC? It is not certain whether PBC leads to more competitive tendering. With the application of PBC municipalities want to keep more grip on the expenditure costs, care provider performances and risks. This is stated by all care providers and municipalities. Continuous assurance of good, safe and most effective care at the lowest possible cost are other important motives and drives to use PBC. Municipalities developed new policies to achieve transformation effects. PBC provide more grip, steering possibilities, differentiable care based on client needs and accountability. And other important motive and drive for municipalities is the abolishment of the old PxQ system and to limit the discussions about hours. RQ 4: What are effects and results of the application of PBC? The emphasis in tendering procedures, according to the municipalities, is more on quality than on price, but this is not always experienced by the care providers. They believe that discussions should increasingly take place with regard to price-quality relationships and the transformation agenda. According to the care providers PBC didn’t improve the quality or lead to more innovation. Municipalities are increasingly focussing on care effects instead of product thinking. The municipalities are convinced that the application of PBC will lead to more transparent, accountable healthcare procurement and the transformation of care effects. With care effects is meant sensible economic care, integrated care, less expensive care, prevention and a better triadic cooperation. Against this is the view of the care providers that they should help more and more customers for the same money. Care as a product is not easily measurable, there are differences within target groups and short-term cyclical performance measurement is not always realistic. Contradictory result is that municipalities mainly think that PBC leads to less bureaucracy, less control and less administrative burden. Care providers think the opposite. Recommendations for practice The added value of this research for municipalities, care providers, client councils and other interested people is that is shows a lot of detailed research results how to use PBC as a healthcare procurement strategy. The most commonly used forms of purchasing systems by municipalities are explained in detail. It enables important stakeholders to gather important insights. A striking research result is that the good cooperation within the triad can reduce outcome uncertainty. This is a promising perspective in a relatively new market situation in which various purchasing and foundation systems are used interchangeably by municipalities. How to define care as a measurable product will also remain an important topic of conversation in the future. Certainly, municipalities will increasingly focus on realizing care effects and keep control on the expenditure costs. The study gives a lot of information about the developments regarding Social support act and Youth act. This study with lot of information provide stakeholders who work within municipalities or care provider insights how to deal with the trend towards outcome based. A promising line of further research is to investigate achieved care effects over a multi-year perspective, possibly with the use of available Big data on a national level. Recommendations for further research Limitations in this study are related to purchasing methods (least used versus most used), the number of expert interviews (7), client representatives were not interviewed, focus was on result areas and not on the achieved results and the legal framework falls outside the scope of this research. Recommendations for further research are (1) replicate this research with different types of PBC within the buyer-initiated service triad context (several experts per participating party) to obtain more knowledge about causes and effects of applying PBC trough municipalities in the LTC-market (2) an (in-depth) single case study in which one specific contract is central within the service triad context and where the involved municipality, care provider, client council and participation council all reflect on the same contract.
Appears in Collections:MSc Management Science

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