This paper discuss the role of primary health care in the health care system. We look at the role of primary care, in particular its role in disease management for chronic disease, which is the major concern for older people. Then we look at two incentivizing policies that have been tried in the UK for improving system efficiency in terms of cost containment and quality improvement. The first policy is the “Fundholding budgets for general practice”; the second is the “Pay-for-Performance in primary care”. This paper concludes that the development of primary care is a policy area well worth considering as a means of sustaining the healthcare system challenged by population ageing and economic resource limitation, but with cautions about the pitfalls that can arise in this area.

One of the drivers on the cost inflation in modern health and welfare systems is ageing. It is amplified by the fragmentation of care into narrow specialties that while failing to cater to whole-person needs also increase costs. To counteract these trends, elderly care needs to move from institutional to home care. This, however, requires service integration at the patient level. Service production systems need to be constructed with this end in mind. This article describes an experiment, Kotitori, undertaken in the city of Tampere, Finland. The model combines the functions of vendor management allowing the city to efficiently contract with several small-scale service producers, and patient-level case management.

In 2006, the Dutch government introduced the “Health Insurance Act” which is based on principles of managed competition. In this scheme insurers and health care providers are competing on price and quality while the regulator establishes regulation to protect public objectives such as individual affordability of health insurance. As shown by Van Kleef (2012) managed competition comes with some crucial preconditions. These include risk equalization, transparency of consumer information, appropriate incentives for cost containment, freedom of choice for consumers, contestable markets, contracting freedom, effective antitrust policy, no possibility for free-riding and guaranteed access to healthcare. So far, the “Health Insurance Act” mainly included short-term care. In the Dutch policy debate, however, some parties have proposed to expand the “Health Insurance Act” (and thereby managed competition principles) to long-term care.

This paper focusses on the question “Is managed competition appropriate for long-term care?” In order to answer this question we first update the work by Van Kleef (2012) by reviewing (anno 2014) the extent to which the preconditions are fulfilled for short-term care. In a second step we discuss whether it is likely that these preconditions can be fulfilled for long-term care. If not, what are the alternatives?

When it comes to the preconditions for managed competition, Van Kleef et al. (2014) have shown that over the past years improvements have been made with respect to short term care. Despite these improvements, there are still some important bottlenecks. First, the risk equalization system undercompensates insurers for groups of chronically ill and overcompensates them for groups of healthy individuals, which confronts insurers with incentives for risk selection. Second, there is a lack of transparency when it comes to the quality of health care and health insurance products. Without transparent quality information it is impossible for insurers to take into account such information for the purpose of selective contracting and/or remuneration of providers. Moreover, consumers will not be able to take into account quality when it comes to choosing a health plan.

We expect that for long-term care it will be even more difficult to fulfill the preconditions for managed competition than for short-term care. Moreover, there are three fundamental issues when it comes to the question whether managed competition is appropriate for long-term care. First, is it possible to organize sufficient risk equalization for long-term care? Second, are users of long-term care able to make a well-considered choice of health insurer? Third, are non-users of long-term care interested in the quality of long-term care? If the answers to these questions are negative, then managed competition may not be appropriate for long-term care.