Analyzing the Added Value of Electronic Intermediaries in the Dutch Health Care Sector

The CareAuction intermediary offers a reverse auctioning platform to support the allocation of individual maternity care patient requests between purchasers of health insurance companies (acting on behalf of their policy holders) and care providers. Since its introduction in 2005, CareAuction has contributed to a small price drop of maternity care and induced competition on the supply-side of the market. This is a result of increased transparency for both (demand and supply) sides. The quality of the maternity care that is provided is monitored by a newly introduced quality evaluation system, which includes the patient and introduces quality as another competitive factor next to price. Next to CareAuction, other intermediaries are still active in the health care sector, supporting the allocation of care between insurance companies and care providers. Findings indicate that the influence of CareAuction leads to the disintermediation of at least one other intermediary. Theory on electronic intermediaries and market dynamics is used to identify the added values that these two intermediaries (CareAuction and LTZ) create for the purchasers and providers of maternity care in the context of the maternity care market.