Funding of community nursing services (Ministry of Health, Welfare and Sports)

The Dutch Ministry of Health, Welfare and Sports asked Gupta Strategists to investigate a new funding model which would reward healthcare providers based on delivering more effective care.

  • Policy makers
  • Procurement

Community nursing services are traditionally funded based on the number of hours worked and the type of activity (nursing or general care). There is widespread dissatisfaction with this funding method, because focusing on hours gives healthcare providers too few incentives to offer added value to their customers.

Further research

We started by conducting a quantitative study on the relationship between objective, measureable patient characteristics and the number of hours of care provided. This research, based on healthcare provided to 40,000 people, showed that the relationship was weak. In other words, patients’ characteristics are a poor predictor of the actual care received. This was disappointing, because everyone involved was looking for a more objective funding method. Extensive follow-up research is required to evaluate whether such a model is actually feasible.

Long-term research

Gupta therefore quantified an alternative model in which healthcare providers are no longer paid per hour, but per ‘product’ (easy, medium or difficult), which is still based on the number of hours. This partially eliminates the volume incentive, and is also fairly easy to implement. For now, the government and sector have decided to keep using the existing funding model – namely, paying by the hour. In the meantime, they are also running a long-term study on the possibilities of funding based on objective, measurable patient characteristics.

Img Kees Isendoorn

Kees Isendoorn's experience

Our job wasn’t only to devise a new model – we also had to generate as much support as possible.”

"Due to the complexity of both the data and the process, this was a challenging project on many levels. First, there was a desire to simplify the payment model based on large amounts of complex data. After careful examination, it appeared that the simpler the model (fewer variables, fewer ‘products’), the more important relationships were lost, which in turn increased the risk of opportunism. We often hear ‘everything is different in healthcare’ as an excuse not to look at something too critically or commercially. But in this case, it was actually true: a community nurse doesn’t look at just five variables, but perhaps a thousand (does the patient have shaky hands, can they make coffee by themselves, do they seem confused or uncertain, what kind of informal care do they have?). You might say that with a limited number of these kinds of traits, you could reasonably predict how much care is necessary. But in practice, there are lots of nuances that nurses consider when determining how much and what type of care is required. The second challenging complexity was at the stakeholder level. We gradually involved a panel of the most important stakeholders in the results. There is a shared interest among stakeholders (providing better care for a reasonable price), but each stakeholder represents a different group, which creates a delicate political situation. Our job wasn’t only to devise a new model – we also had to generate as much support as possible. Considering the diversity and varying individual interests within the stakeholders’ panel, this led to many interesting discussions. All in all, it ended up being a very educational experience."