Health care provision is undergoing major reforms in Europe as a reaction to rapidly increasing expenditure and lowered political acceptance to commit public finance to cover the deficits. The Dutch government will decide in 2007 if the current budget system will be replaced by a more...

Data Envelopment Analysis (DEA) based cost norms have attractive properties in the regulation of natural monopolies. However, they are also sensitive to the choice of cost drivers. When some of the cost drivers are discretionary, this may lead to suboptimal incentives. When a regulated firm...