Annual Cure studies
Once a year we investigate the performance of Dutch hospitals and analyse the developments in this sector.
Falling Hospital Production in 2012Financing for hospital care has changed significantly. With so many changes, it is interesting to see what effects all of this has had on sector performance. Gupta Strategists analyzed the annual reports and annual documents of a total of 54 hospitals that to date have published such documents. From this analysis, it appears that hospitals’ total revenue increased by about half a billion euros less than expected. The most important reason for this is a fall in total hospital production. This is something we haven't seen before.Read the article (in Dutch) on this study that appeared in the newspaper 'Het Financiele Dagblad' on June 16, 2013 here.
Great ExpectationsIn 2011, hospitals performed well: revenue and production grew moderately, costs increased at a rate lower than inflation and the B segment seemed to be functioning well.
Yet we still saw a number of important points needing attention:
· Fundamental changes in costs. Labor productivity must improve in a fast, sustainable way and hospitals need to make better use of ICT possibilities in the healthcare process.
· Transparency regarding the causes of growth. We see an increasingly higher chance of (day)patient admission and large differences in the growth of hospital markets. Hospitals give too little account for the causes of these developments.
Alice's Adventures in WonderlandIn 2010, revenue and cost increases for Dutch hospitals were lower than what we had grown accustomed to in the previous years. Though the freely negotiable B segment did grow much more than the budgeted A segment. Intangible fixed assets seemed to have grown as if by magic. Surprisingly enough, after years of strong growth, procurement costs suddenly contracted. These performances surprised us.
"De donkere kamer van Damokles"In 2009, though the Dutch economy contracted significantly, the hospital sector did not. For the latter it was business as usual – greater production, a dramatic increase in revenue, increasing wages and more personnel. Recession or not, our need for healthcare was growing, possibilities for providing healthcare were increasing and we were still willing to pay for it. This would eventually lead to the current model becoming unaffordable, but in 2009 that was not yet the case and the hospital sector was helping to drive the economy.
Zen and the Art of Hospital MaintenanceIn this report, Gupta Strategists presents an early warning system to identify hospitals at high risk financially. In 2008, hospital revenue continued to grow while productivity continued to decline. This put an ever-greater strain on the future financing of healthcare. Being able to detect early on hospitals that are at risk financially and to take appropriate response measures can prevent the significant social costs of a bailout.
Brave New WorldGupta Strategists analyzed hospital performance between 2002 and 2007, and looked ahead to outline likely developments for the next five years.
This outlook proposed robust growth, overall improvement and increasing differences between hospitals for the period 2007–2012.
The OdysseyIn 2006, the financial position of Dutch hospitals deteriorated substantially. At the same time, the difference between financially healthy and financially vulnerable hospitals increased. Differences in market performance also grew. Gupta Strategists has concluded that, due to the increasing difference in performance, there may be pressure on vulnerable hospitals to merge, contract or improve.
The TwilightHospitals are less productive despite the fact that patients, in contrast, appreciate efficient hospitals. In 2005 it was once again confirmed that a one-size-fits-all strategy for hospitals does not work. Gupta Strategists calculated that declining productivity cost society an extra 140 million euros in 2005 compared with 2004 and adjusted for inflation. Yet 39 of the 93 hospitals actually saw improved performance and delivered a social profit of 120 million euros. Therefore, it is inappropriate to adopt the same approach for all hospitals.
The Pied PiperFollowing years of declining performance, in 2004 Dutch hospitals saw strong improvements in results. Productivity increased significantly and profit grew dramatically by more than 100 million euros. More importantly, nearly all hospitals were doing better: 74 of 90 had improved their productivity and 85 out of 90 hospitals had achieved positive results for 2004. Gupta Strategists concludes that in 2004 a form of market forces were already at work. In some regions, such as Rotterdam for example, there was a correlation between costs, market performance and financial performance. In competitive areas, the fruit of market forces already began to show even before the opening of healthcare markets.
Annual Care studies
In our annual Care studies we show the developments in the Dutch market for elder care, we also compare the performance of individual institutions
The new normalIn elder care, growth and predictability have given way to contraction and instability. In this ‘new normal’, healthcare providers have to deal with three main issues:
1. Moving care to the home.Between 2014 and 2018, residential care is slated to decrease by 22%. This is leading to an increased need for more significant care at home, which is why the 'volledig pakket thuis' (full home care) has grown by 68% per year since 2010. The movement towards home will also affect people with dementia, although currently 86 cents of each euro spent on healthcare costs for this group still goes to nursing homes.
2. Shift from effort to results. When it comes to hospital care, being transparent about results leads to better quality care. The introduction of electronic health records, using the Omaha System for example, makes it possible now in elder care as well to gain insight into the relationship between care delivered and outcome. In addition, Zorgkaart Nederland has been making significant headway in measuring client experiences.
3. Higher risks persist. Healthcare providers could face up to 1 billion euros in budget cuts in 2018. Risk management therefore requires pragmatism: close locations where occupancy is low, and focus on self-organization and low overhead. It is also important to move towards rewarding results – look beyond prices and opt for innovation in volume and quality.
Calm before the StormThis study presents the good performances of elder care institutions. Since 2009, revenue has not been growing faster than inflation plus growth from the aging population, the sector has healthy profit margins and assets have been significantly strengthened.
However, in light of the recent coalition agreement, these quiet years may just be the calm before the storm. The agreement will lead to the sector contracting, which is unprecedented in the history of elder care. The simultaneously planned transfer of care to municipalities will bring extra challenges.
In this study, we describe a number of strategic consequences for healthcare providers and the government. Healthcare providers will have to adapt their ways of thinking to come up with new solutions during this time of contraction. We also reflect on the great variation between municipalities in healthcare consumption. This will complicate budget allocation but, at the same time, offers an opportunity to address undesirable variations in regional practices. The drawbacks of implementation by municipalities is another subject addressed in this study, in particular sky-high administrative expenditures, which under the WMO law are now over 10% compared to 1.5% under the AWBZ law. Working together with healthcare administration offices or health insurance companies could offer an effective solution.
Download the full report ‘Calm before the Storm’ (in Dutch) here.
Healthcare for LaterThe set-up of elder care in the Netherlands is unique. This is true in terms both of the government’s role and of the inexplicable regional differences in elder care and the proportion of inpatient and outpatient care. 2010 was a unique year with limited growth, growing consolidation, good cost management and a strong dynamic between institutions, especially those focusing on outpatient care. This study paints an overview of the performance in 2010 of more than 400 elder care institutions and positions them within the larger European perspective.
Download the executive summary of ‘Healthcare for Later’ (in Dutch) here.
Download the full report ‘Healthcare for Later’ (in Dutch) here.
Keeping the PromiseIn 2008, profitability for nursing homes, residential care homes and home care institutions in the Netherlands improved compared to 2007. Institutions that focused only on elder care performed noticeably better than those with a broader focus. There were large differences in efficiency between institutions. To keep elder care affordable in the future, it is necessary to work more efficiently. This study uses a benchmark to show that efficiency gains of between 1 and 2.8 billion euros are feasible.
Download the executive summary of ‘Keeping the Promise’ (in Dutch) here.
Download the full report ‘Keeping the Promise’ (in Dutch) here.
Next to our annual studies we also publish on other relevant topics on Dutch healthcare.
The world is a clinical trialMedical decision making is becoming ever more difficult. To make the best possible decisions, all relevant supporting information – both from evidence and from experience - needs to be easily accessible and structured so that it is relevant and accurately applicable to the specific patient. We have tools at our disposal to incorporate evidence into the medical decision making process. Tools to systematically learn from experience – both one’s experience as well as that of colleagues - have not yet come to fruition.
This paper presents an algorithm that allows doctors to systematically incorporate their individual as well as collective experience into the decision-making process. The algorithm was developed and tested on data from Amphia hospital in Breda, The Netherlands. Our algorithm consists of three steps: 1) create a unique ‘fingerprint’ for every patient, 2) compare similarities between ‘fingerprints’, and 3) develop insights and/or recommendations. The steps are summarized in the figure below.
As a proof-of-concept, we have shown that the fingerprint model can explain and predict two clinical outcome measures: 1) length of stay, and 2) probability of ICU admission. The fingerprint model matches or surpasses the best existing and published models. The algorithm can be applied to other outcome measures as well, and can provide decision recommendations based on outcome differences within highly similar patient groups.
We see three possible areas of application for the algorithm:
- Learning on the go: an upgraded version of the current proof-of-concept, in which the collected ‘experience’ data points are combined with ‘evidence’ in the form of (data from) publications.
- The world is a clinical trial: the incorporation of the algorithm into a ‘self-learning’ model, which could revolutionize clinical research.
- Management information: the algorithm can be applied for payers and providers alike, for example in the individualized prediction of cost and scheduling.
We hope this study will contribute to advancing the fields of clinical decision making and research. Please do not hesitate to contact us for further discussion.
Mental healthcare study 2016The 2016 mental healthcare study ‘Waar is de gulden een daalder waard?’ (‘More bang for your buck?) looks at the relationship between quality and financial performance within the mental healthcare sector and summarizes a number of important observations. First, Dutch mental healthcare adds value. The total cost of psychiatric disorders is lower in the Netherlands than in the rest of Europe. However, institutions are under significant (budgetary) pressure. Large institutions in particular are experiencing financial difficulties, as can be seen from low profit margins and the large number of institutions operating at a loss. In addition, there is a huge disparity in quality performance levels. Despite the fact that all of this information is publically available, it is rarely ever put to use, which means that much of the sector’s potential remains untapped. Better use of information on providers’ quality performance would increase financial returns in the mental healthcare sector. At a time when talk of budget cuts to this sector have already been going on for years, failure to make use of quality information is equivalent to the destruction of capital and ignores the added value created by the sector for Dutch society. Greater focus on this value would make for a more dynamic sector and would ensure more bang for your buck when it comes to mental healthcare value.
No place like homeResearch by Gupta Strategists indicates that 45% of healthcare now provided in the hospital could be moved to the home. This is good news for patients, for whom receiving healthcare at home means being able to quickly regain normalcy in their lives. This shift will have a significant impact on all parties concerned, and both patients and healthcare providers will have to prepare for change. In this study, Gupta Strategists systematically maps out these changes.
The shift of healthcare to the home is based on two main pillars: (1) the feasibility of using devices at home to treat and monitor patients, and (2) the availability of large amounts of data, which doctors can use to more accurately estimate the risks involved in sending patients home.
Treating patients at home blurs the distinction between being healthy and being sick. Patients will therefore have to learn to live with their illness and figure out how to combine the rest of their life with their life as a patient. They will be required to take the reins of their own treatment, but they won’t have to do it alone. If being in charge of treatment is like flying an airplane, the patients will move from the passenger seat to the pilot seat. Nurses will become their co-pilots and will take on more of a coaching role instead of directly helping the patients; they will have to take on less of an active role and allow patients to become better at managing their own illness.
As treatment moves to the home, doctors will experience the biggest change of all. One-on-one contact with patients will, to a large extent, disappear and doctors will transition from pilots to air traffic controllers who monitor and treat a large group of patients remotely. While doctors may be well positioned to acquire the new skills necessary, they will be working from a different perspective than they have thus far been trained to do.
The Road to ChangeIn recent years, we've been closely involved in implementing major changes in hospitals. Real change is very difficult to achieve, certainly in hospitals. That is what drove us to write a report on change.
How can you ensure that a hospital successfully changes?In ‘The Road to Change’ we answer this question. This study combines our project experiences, interviews with experts from the hospital sector and the theory behind change.
What does it show? Change is not so much a brilliant idea as a movement with a planable route.If you carefully plan out a number of important steps and then stick to them, you can remain in control of the change process. In this study we shed light on the seven most important steps in bringing about change and provide guidance and inspiration for successfully achieving change.
Download the study ‘The Road to Change’ (in Dutch) here.
Healthcare in the Wake of Economic ChangesIn recent years, healthcare costs have plateaued, both in the Netherlands and in other Western economies, such as the US. In the US, there are signs that this leveling off of healthcare costs is closely related to the economy. The question is whether or not this is also the case for the Netherlands. If so, what does that mean for the forecasted growth in healthcare costs in the coming years, for healthcare policy and for forecasting models?
In this Gupta Strategists study, it appears that about 80% of healthcare cost increases can be explained by GDP growth and inflation. GDP is the biggest factor and accounts for 50% of healthcare cost growth, while inflation accounts for 30%. This is based on an analysis of GDP, inflation and healthcare costs figures from the past 35 years.
Click here to download the study ‘Health in the Wake of Economic Changes’ (in Dutch).
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The Social Heart of Corporate HollandThe coalition agreement between the Labor Party (PvdA) and the People’s Party for Freedom and Democracy (VVD) proposed spending cuts in elder care totaling 2.8 billion euros. Gupta Strategists researched the possible effects of these cuts and for various scenarios calculated the feasibility of the cuts and their impact on purchasing power.
The study shows that all elderly people in need of care will be adversely affected by these cuts, as spending cuts for people with high incomes alone will not be sufficient. People with mid-level incomes will also be very negatively affected, and everyone will be responsible for arranging more of their own care.
Download the study ‘The Social Heart of Corporate Holland’ (in Dutch) here.
2012 GE Study – Gupta Strategists and Erasmus MCTwo hundred thousand kilometers of digestive tract – upkeep needed.
A short time ago it was announced that a mass screening for colorectal cancer among the general population would not go forward due to a lack of available funding, despite the fact that for a relatively small price it could save many lives. The program is already ongoing in a number of other EU countries. The government’s rationale for this, which was based purely on costs and did not consider the social value of lives saved, confounded healthcare providers. Erasmus MC and Gupta Strategists took it upon themselves to shed light on the value of longer, healthier lives. Doing so has provided an entirely different perspective for political decisions in healthcare. We not only looked at screening for colorectal cancer, but also at what has actually been provided by healthcare innovations to date. It has since been decided that the screening program would in fact go ahead in the Netherlands. This study is intended first and foremost to encourage people who qualify for screening to undergo it and to educate other interested parties about the perspective of Erasmus MC and Gupta Strategists.
Click here to download the full study (in Dutch).
Code Red – Scenario for Healthcare Developments 2009–2014In 2009, the Dutch Ministry of Health, Welfare and Sport proposed new measures to mitigate the impact of the economic crisis on healthcare. When we researched the effects of these measures, it became clear that the proposed 2.4 billion euros in extra spending cuts were negligible compared to the gap between tax and premium revenue and the growing costs of healthcare. This report illuminates potential savings by expanding the B segment and improving chronic care. Finally, we discuss the possibility of closing hospitals when improving efficiency does not appear feasible.
Download the full report ‘Code Red’ (in Dutch) here.
B Segment – Research on the Most Important DevelopmentsIn 2008, during an assignment for the Dutch Hospital Association (NVZ), we researched developments in the B segment. When unrestricted prices and volumes had been introduced in 2005, expectations were high. Market forces had been proposed as a solution for keeping the level of healthcare high. The NVZ wanted to bring discussions on market forces to the next level and wanted evidence to substantiate its argument. In this report, we analyze different databases over several years and conclude that the possible advantages of developments in the B segment outweigh the possible disadvantages.
Download the executive summary of the study ‘Effects in the B Segment’ (in Dutch) here.
Download the full study (in Dutch) here.
2007 US Study TripIn 2007, Gupta Strategists organized a study trip to the United States. Together with Dutch hospital directors and an insurer we visited five hospital organizations, a vertically integrated healthcare system and a university. We saw innovative ways of providing healthcare and discussed the pros and cons of doing so. The various forms of innovation all covered different aspects of healthcare services, and each had come about in a different way. Yet at the same time, there were five key things that all of the organizations we visited had in common in their search for improvement. These things are also relevant to healthcare in the Netherlands.
Download the report (in Dutch) of our study trip to the US here.