Procurement of Care

As of 2015, Dutch municipalities are responsible for youth and home care. The national government decentralized youth and home care to municipalities, because they believed it would result in better care at lower costs. This means that municipalities are expected to perform better in procuring and providing youth and home care than the national government did, with a smaller budget.

To provide clients with the youth and home care they need, municipalities have to procure goods and services, such as walkers, cleaning services and dyslexia training, from healthcare providers in the market. In the procurement process municipalities determine what kind of care clients might need, the quality, quantity and price for this care, and select and contract suppliers. How municipalities do this, ranges from copying what the national government used to do, to auctioning it to the highest bidder, or contracting every provider that meets the requirements (Transitiecommissie Sociaal Domein, September 2016). Because poor procurement decisions cause poor performance (Schiele & McCue, 2006), the procurement process holds a crucial role in determining whether municipalities can indeed provide better care at lower costs.

Effective public procurement is however no easy feat for municipalities. Public procurement is considered to be an extremely complicated government function, which requires key actors to have interdisciplinary skills and knowledge of multiple disciplines, such as economics, public administration, accounting, law, and healthcare (Thai, 2001). The complexity of procuring youth and home care is increased by the fact that it is a new task for municipalities,

It is therefore interesting that, despite this major challenge that municipalities are facing and the crucial role of public procurement therein, procurement has not (yet) been recognized within public administration research as an important topic, nor has it matured into an academic field (Grandia, 2018). Little is therefore known about the effects of public procurement on public performance. This also holds true for the decentralization, as many of these studies focus on healthcare providers (e.g. Schipper, Luijkx, Meijboom, & Schols, 2015; Van der Voet, Steijn, & Kuipers, 2016; Van Goor & Naber, 2016), rather than municipal procurement.

I have therefore received a EUR Fellowship to conduct a two-year study that will open up the black box of public procurement and public performance by addressing the following two key objectives:

  1. Determine how municipalities are performing in the procurement and provision of youth and home care.
  2. Explain how procurement affects the performance of municipalities in providing youth and home care.

Two related, but separate studies, will combined address these objectives and explain how municipalities are procuring and performing in the provision of youth and home care and how they are related.

  1. Comparative Case Studies: the goal of this study is to (1) examine and compare the relationship between procurement and performance in the provision of youth and home care, and (2) develop hypotheses about this relationship. Six to ten municipalities will be selected with a variance in procurement models, position in the region, and location in the Netherlands. Size will be controlled for in the case selection. Interviews will be held with key actors, such as procurers, civil servants, managers of neighbourhood care teams, and aldermen. A comparative case study design will be used to analyse and examine the relationship between procurement and performance, and develop hypotheses. For example the relationship between procurement model, maturity, integration, and performance (e.g. client satisfaction and costs) will be examined.
  2. Nationwide survey: the goal of this study is to (1) test the hypotheses from the first study and (2) examine the relationship between procurement and performance on a national level. All Dutch municipalities will be asked to report on their procurement via an online survey. 

The findings of the two studies have clear practical and academic implications. Which is why the research will result in publications for both academic and practitioner journals. The goal of the study is to learn how smart decisions in procurement can contribute to the performance of municipalities in providing care. This however does not mean that the studies will result in a ranking of municipalities based on their performances. Rather it will provide insight into the mechanisms that connect procurement and performance. This insight can help municipalities learn and improve their performance.