The contracting of youth care is under fire. The House of Representatives would rather see this purchasing method disappear today rather than tomorrow. Experts are skeptical. Even if it is because municipalities do not have to tender at all. There are plenty of alternatives.
There must be an end to tendering and purchasing specialists through open house constructions youth Services. At least, that is the opinion of a majority in the House of Representatives. A motion by Member of Parliament Sarah Dobbe (SP), calling on the government to make these forms of purchasing impossible, was adopted this month. The SP motion could count on support from the PVV, GroenLinks-PvdA, BBB, DENK, PvdD and Volt. Both purchasing instruments would lead to ‘undesirable competition’, ‘unrealistic rates’ and the rise of ‘commercial youth care providers’. It all contributes to ‘the misery in youth care’.
No market
Tendering in particular is in the dark. That only leads to ‘a race to the bottom’, Dobbe believes. ‘Health care is not a market, and certainly not youth care. It makes healthcare more expensive and worse. We have to get rid of that,” said the SP MP during the recent debate on closed youth care.
Opush aside
It is not the first time that such a critical voice has emerged in The Hague. Two years ago, a large part of the House wanted to get rid of European procurement rules when municipalities purchase youth care. State Secretary Maarten van Ooijen (Public Health, Welfare and Sport) then indicated that he cannot simply set aside the European directive that prescribes the tender.
Wrong leg
Niels Uenk is now done with this recurring aversion to tendering. He is director and researcher at the Public Procurement Research Centre, a company focused on developing and disseminating knowledge about purchasing in the public sector. Uenk obtained his PhD from Utrecht University with a thesis on municipal healthcare purchasing. According to him, the assumption that contracting out youth care is the root of evil misleads people: ‘It does not bring vulnerable residents, care providers, professionals and municipalities an inch further.’ Uenk receives support in this from lawyer and consultant Tim Robbe. As an expert in the social domain, he advised more than 250 municipalities on purchasing and tendering processes. According to Robbe, ‘abolishing’ tendering is not the solution, for the simple reason that it is not mandatory at all.
Four shapes
Yet the vast majority of municipalities opt for tendering or open house when purchasing youth care. ‘With tendering and open house together you achieve approximately 95 percent,’ Uenk explains. ‘And to be clear: open house does not involve tendering. The element of competition for a contract is absent, because municipalities contract all providers that meet the requirements.’ At the open house, the healthcare client can choose one of those providers that meet the municipality’s requirements. Subsidizing youth care providers – which gives providers more freedom to offer care in their own way – is also an option, but this is less common. In addition to these three forms of outsourcing, municipalities can provide care under their own management. “Almost no municipality chooses that (yet),” says Uenk.
No competition
Back to tendering. As the motion notes, there is indeed competition. But Uenk thinks that tendering in (specialist) youth care leads to ‘a race to the bottom’ is far too simplistic. ‘There is virtually no real price competition in tenders in youth care. About 95 percent – and perhaps even 99 percent – of municipalities determine the rates themselves or with the help of independent research agencies.’ This results in standard prices for which providers are allowed to tender. Sometimes those prices are not profitable for every youth care provider. But from one race to the bottomwhere competition on price leads to (too) low rates, is not the case according to Uenk and Robbe.
Price tag
Do local governments never look at the price tag? ‘I won’t say that price doesn’t play any role, but municipalities generally consider the quality of care to be much more important,” says Uenk. ‘A municipality rarely chooses a provider who does it for the lowest price. This also applies to specialist youth care. Of course, municipalities do not want to pay more than is strictly necessary, but that is why they have rates determined separately and almost never as an award criterion.’ Where things go wrong is when the municipality sets a price that is too low. ‘But that is not necessarily due to tendering as a purchasing instrument in itself,’ says Robbe. ‘For example, if you subsidize, you also have to determine a rate, and that may just as well be inadequate for the organization that receives a subsidy from the municipality to provide youth care.’
Not Belgian
But what about European procurement rules? The market with youth care providers is over exploded for years. This has made the healthcare landscape more confusing, which makes the necessary cooperation more difficult. However, this does not alter the fact that the share of non-Dutch youth care providers is minimal. “As far as I know, there is no Belgian to be found even in Zeeuws-Vlaanderen,” says Robbe. The lawyer also does not see any European parties in Limburg and other border regions. This is due to the language barrier, but also because, for example, the Belgian healthcare system is very different from the Dutch one. ‘They cannot simply enter the Dutch market and vice versa.’
Street lighting
Aren’t the European procurement rules restrictive and unnecessarily slowing down the purchasing of youth care? It is usually due to clumsiness or limited views on what is possible and allowed, says researcher Uenk. ‘We often talk about contracting out healthcare as if municipalities shape this in the same way as the purchase of street lighting or office supplies. Much more is possible when purchasing healthcare, and municipalities are increasingly making use of these options.’
European Union
This also applies to arranging youth care yourself. The European Union (EU) does not hinder municipalities in this area. ‘Just like green areas, municipalities are also allowed to carry out youth care themselves,’ Uenk explains. This can be done with our own healthcare staff within the municipal organization, and under certain conditions also by setting up a separate organization under the supervision and control of the municipality. ‘The EU and Dutch law actually say that municipalities can choose themselves: carry out their own management, subsidize, open house or tender for a government contract. If they choose to put the contract out to tender, they must comply with procurement law. These rules are in place so that entrepreneurs throughout the EU – and in practice, especially all healthcare providers in the Netherlands – have a fair chance of winning the government contract.’
Read the full article in Domestic Government no. 8.
