Yardstick competition for multi-product hospitals: An analysis of the proposed Dutch yardstick mechanism

Health care provision is undergoing major reforms in Europe as a reaction to rapidly increasing expenditure and lowered political acceptance to commit public finance to cover the deficits. The Dutch government will decide in 2007 if the current budget system will be replaced by a more competitive mechanism, based on the yardstick regulation principle by Shleifer (1985). One of the proposed systems for the reform can be compared to a revenue-cap implementation of a multi-product cost-yardstick mechanism. The redistribution of the sector’s relevant cost is made in proportion to the individual ho... Mehr ...