Incentives for cost-effective behavior: a Dutch experience

In 1983 the Dutch government introduced a system of hospital budgeting in the Netherlands to contain the increase in health care costs. The budgets were fixed at the real costs in 1983 after an assessment of these costs. A distinction is made between external budgets, which is allocation of resources by external institutions, and internal budgets, which is the allocation within the organization. External budgets should be global; internal budgets should be specific. The influence of the budgeting process on the situation and attitude of physicians is analysed. The budgeting process influences the administration as more and better data are needed to involve heads of departments and physicians in the budgeting process. Specifications of the data in departments, specialisms, and patients seems necessary. The budget process also has its impact on the hospital organization, notably on the position of the physicians and the medical staff, for it tends to integrate them more completely into the organization. There may be a difference between 'the gate specialists' and the specialist heads of service departments. Budget responsibility will be given to all specialists. Finally, the budgeting process affects the quality of patient care. With limited resources, it is necessary to link quality with efficiency in allocating resources. It will probably be necessary to provide more coordination between hospital budgets and specialists' fees. In the future more capitation and salary elements will be brought into the fee system for physicians.