Electronic auctions can be applied in certain markets, but the effects on market structure, market behaviour and market performance are unclear. We analyzed the effects of a reverse electronic auction initiative, implemented by a new intermediary (CareAuction.nl), on the market for maternity care in the Netherlands in 2005 and 2006. After an unsuccessful start in 2004 as cybermediary in the care market between patients and care providers, CareAuction successfully moved in March 2005 to the care contracting market between insurance companies and care providers. We found small but significant effects on the price of maternity care (minus 2-4%), and significant effects on market structure (more care providers involved in the bidding processes) and market behavior (bidding behaviors and user preferences). We see good opportunities to improve health care market effectiveness for specific care services (non-emergency, elective, standardized care) and to further adapt the auction mechanism.
Smits, Martin and Janssen, Richard, "Impact of Electronic Auctions on Health Care Markets" (2007). DIGIT 2007 Proceedings. 8.