Good governance in the care sector

Purpose of good governance in the care sector

Care providers are free to structure their organisation as they see fit and to make their own decisions. The government keeps its distance in this respect. Care providers must deal with the consequences of their decisions. This means they could also go bankrupt, so it is important that the organisations have their affairs in order. Leadership, internal supervision and risk management are important.

Good governance by care providers means they:

• ensure their patients receive safe, good-quality care
• clearly allocate responsibility within the organisation
• carry out good financial management.

Supervision of care provider management boards

The management board is ultimately responsible for the quality, safety and continuity of the care provided in an organisation. Their policy and decisions must be assessed by an internal body, usually a supervisory board. The supervisory board offers constructive criticism, taking into account the fact that the organisation serves a public interest. They also take account of the views of patients and staff members.

Supervisory boards can dismiss a director who they find is performing poorly. When supervisory boards do their work well, the risk of incidents is small.

Supervision by the Healthcare Inspectorate

Besides monitoring the quality of healthcare, the Healthcare Inspectorate monitors the way care providers are run. For example, it holds management boards to account if they are not fulfilling their responsibility to ensure quality and safety. The Inspectorate also involves the supervisory board in the process of monitoring governance.

Supervision by the Dutch Healthcare Authority (NZA)

Care providers must charge for the costs of care or treatment in a certain way. Management boards are responsible for doing this correctly. The Dutch Healthcare Authority checks that their administrative affairs are in order. That too is part of good governance.

Improving the quality of management and internal supervision in the healthcare sector

The government wants to further improve the quality of management and internal supervision in the healthcare sector, for example by taking a tougher approach to incompetence and mismanagement. Other measures include:

• Highlighting the defined reciprocal responsibility of directors and supervisors, for example through mandatory accreditation and registration of healthcare managers and amending the code of governance;
• Stepping up external supervision of governance;
• Increasing patient participation, so management can better factor in their needs.

Where possible, the government will also support initiatives by care providers to improve management.

Competition in the care sector

Care providers are companies within the meaning of the Competition Act and, as such, must comply with its rules. They are not allowed to make agreements about competition that disadvantage patients. And they are not allowed to abuse their dominant market position. This applies to small and large care providers, from GPs and pharmacists to hospitals and drug wholesalers.

The healthcare sector guidelines issued by the Authority for Consumers and Markets (ACM) give information on what forms of collaboration and conduct are permitted by the Competition Act and what forms are not.

Monitoring mergers in the healthcare sector

Care providers must submit their plans for a merger to the Dutch Healthcare Authority (NZA) for approval. Mergers that are not approved by the NZA are prohibited. This is laid down in the Healthcare Market Regulation Act. The care providers must include a report on the likely effects of the merger with their application.

The NZA will approve the merger if:

• the care providers have thought carefully about the benefits and the risks of a merger, and talked about this with all involved parties;
• the merger will not put the provision of essential care at risk.

After the NZA has approved a requested merger, notifiable care providers can submit their plans to the ACM. The ACM will check whether a licence is needed for the proposed merger. If so, the ACM will decide whether or not to issue a licence.