An Analysis of the General Consumer Interest as a Source of Regulatory Legitimacy in the Case of the Dutch Healthcare Authority

Abstract

Economic regulation by independent regulatory authorities is justified in a legal sense by theories based on delegation, (partial) ministerial responsibility and judicial review, or more recently on regulatory contracts and stakeholder representation. While none of these models is fully satisfactory they all focus either on the relationship between the regulator and the central authority, or on that with the parties that are the subject of economic regulation, and do not focus upon the ultimate objective of economic regulation itself: consumer benefits. The Dutch Healthcare Market Regulation Act (Wmg) creates a new starting point because it not only introduces the general consumer interest as a legal concept but as the priority objective of regulation - albeit based on a motivation that is largely implicit. This paper provides an initial investigation on how to interpret this concept, operationalised in the three variables quality, affordability and accessibility. It draws inter alia on the economic approach to regulation (based on the concepts of market failure and market power, and more recent notions of bounded rationality), and whether it can provide a non-trivial source of legitimacy based on the results achieved in serving the statutory constituency of the regulator: the consumer.

Keywords: healthcare regulation, healthcare liberalisation, economic regulation, deregulation, consumer interest, public interest, affordability, quality and accessibility, legitimacy, bounded rationality

JEL Classification: I, I18, K, K23, K32