1 augustus ’15 the dutch health insurance system wout dekker, manager of communications &...

119 apr 2023

The Dutch Health Insurance The Dutch Health Insurance SystemSystem

Wout Dekker, manager of

Communications & International Relations

Association of Dutch Health Insurers

Prague, March 12, 2009

Outline

A. Background information Association of Dutch Health Insurers

B. The Dutch health insurance system

C. Discussions

D. Results so far

E. Future challenges


A. Background

• Zorgverzekeraars Nederland (ZN):Association of Dutch Health Insurers– Members: all Dutch health care insurers that offer basic

health insurance (as well as supplementary insurance)– Currently: 12 independent conglomerates and health

insurance companies– Central role in health care financing: almost entire

health care budget (€ 58+ bln) is financed through health care insurers

– Lobby and PR; collective agreements (e.g. privacy and switching facility); services for members (e.g. ICT standards and statistics)

– And of course: member of AIM


B. The health care system

HEALTH INSURANCE MARKET

Insured person

SUPPLY DEMAND

Doctor Patient

INSURANCE

FINANCING MARKET

‘Manager’

Financier Insurer

GOVERN-MENT

CARE MARKET


B. The old system

Exceptional Medical Expenses Act

Care for elderly and disabled, psychiatric care

Health Care Insurance Act (sickness fund)

Public

Insurance for civil servants

Private insurance

Acute & regular medical care

Supplementary private insurance All remaining care


B. The new system (01-01-2006)

Community Support Act Community care for elderly and disabled

Exceptional Medical Expenses Act

Long term care for elderly and disabled

Health Insurance Act Acute & regular medical care (including psychiatric care)

Supplementary private insurance All remaining care


B. Reasons for reform

• Fairness, transparancy, efficiency• Unfair differences in health care

contributions, depending on personal situation

• Different set of rules for public and private insurers: lack of transparancy

• High level of government intervention led to inefficiencies and lack of innovation

• Quality not always clear


B. Health insurance act: private insurance..

• Private insurers (including for profit)• Open enrollment• Private contracts (insurance policies)• Insurer free to set level of insurance

premium• Deductibles up to € 655 a year• Insurer free to contract health care

suppliers and to set conditions/ prices


B. ..…with public safeguards

• Health insurance compulsory for all residents and tax paying non-residents

• Obligation of insurers to accept everyone on specific policy without differentiation in premiums

• Broad coverage defined by government (but: choice in specific insurance policies)

• Risk equalisation scheme, funded by income related contributions (half of total costs)

• Children pay no insurance premiums• Tax credit system for lower incomes


B. Types of insurance and coverage

Supplementary Health Insurance

Health Insurance Act

General Exceptional Medical Expenses Act

Long term care for elderly, disabled, and psychiatric patients

Legally determined coverage:Hospital Care, GP, Psychiatric Care, Pharmaceutical Care

Supplementary coverage by choice: Physical Therapy, Dental Care, Cosmetic Surgery, Alternative Treatments and so on


B. Flow of funds health insurance (2008 in billions)

(€ 1,4)

Government Health care

allow. (€ 3,6 )

state disbursement children (€ 2,1)

Employers

compulsary allowance (€ 13,4) Risk

adjust-ment fund

income related contr. (€

16,6)

(covers 50% of health care consumption)

Insured

Health Insurers

Care providers

Operating costs& Profit

premiums (€

13,3)

healthcare coverage (€

30,5)

co-

payments

(€ 1

,3)

(€ 1,4)

(€ 18,6)


C. Policy discussions

1. Private social insurance and EU law

2. Funding: income and wage cost effects

3. Risk equalisation

4. Free rider problems (defaulters 200.000)


C. European dimension

• Long debate: can government force public guarantees upon private insurers?

• Exemption clause in non-life insurance guidelines

• State aid aspects: risk equalisation and financial reserves of sickness funds

• Application of social security regulation 1408/71 (pensioners!)

• In all cases: final decision up to European Court of Justice


C. Income and wage cost effects

• Average nominal premium € 1.050 a year (sickness funds: € 400)

• Employer contribution 7,2% of wage (5,1% for pensioners and self-employed) up to € 31.000

• Tax credit maximizes nominal premiums as percentage of household income (3,5% or 5%)

• Net result: € 1 billion lower taxes and premiums• But: winners (elderly and chronically ill with

private insurance, families with children)• And losers: young healthy singles, civil servants


C. Risk adjustment

• Twofold purpose: prevent risk selection and create level playing field

• Ex ante compensation on the basis of objective criteria (age, gender, health status) of insurer’s population

• Temporary ex post compensation based on relative performance of insurers

• Good results: we even see special policies (with discount) offered to chronic patient groups


C. Free rider problem

• Uninsured– Before reform: ¼ million - Now: a little less – Actual sanction: 130% fine– In preparation: intensifying information and eventually

active tracking of uninsured.

• Defaulters– Preventive measures (insurers and social authorities)– No switching during indebtedness– Intensifying process of premium collection by private and

eventually public means Prague, March 12, 2009

D. Results so far

• Smooth transition: everyone received insurer’s offer

• Strong competition

• Low premiums

• Active switching by consumers

• Stronger position patient groups

• Administrative problems in first year

• Unhappy providers

• Debate on income consequences

• Angry expats

• Free rider problems


NegativePositive

D. Consumer empowerment

• free choice and appropriate information to make a good choice

• maximum safety and quality of health care

• information, permission, filing and privacy

• effective and easily accessible complaints- and assignment bureaus

>>thus enabling the patiënt to occupy thecentre stage!


D. Some promising results

• overall growth in costs has fallen• quality, safety and performance of health care

providers are improving• there are more and better choices for the

consumer• there is a growing interest of the intermediary

for health insurance• more transparancy in performance and quality

for both insurers and health care providers• less regulation and administration but more

supervisionPrague, March 12, 2009

D. Simply the best?

New report finds Dutch

healthcare system best in EU?!

“The report puts the Netherlands at the top of a healthcare ‘league table’, saying US president-elect Barrack Obama would do well to use the Dutch system as a source of inspiration for his own country.”

Source: Euro Health Consumers Index 2008, Brussels


D. The insurers perspective

The new health insurance lead to:• huge change in administration in 2006• in 2006 more than 25% of insured changed

insurer• some insures lost others gained clients• new mergers of insurance companies• strong competition on premiums; no profits• cuts in costs of administration; less than 4%

Operation succesfully completed; complimentsfrom the government


D. The insurers perspective II

• substantial rise in group contracts• better service to employers in health

mediation and prevention• firm negotiations with healthcare

providers on quality and patient rights

A switch from price competition to competition on quality and performance improving consumers satisfaction!


E. The European perspective

Can lessons be learned for new developing systems

in other EU-member states?• all member states dealing with costcontainment• mainstream within EU: social/public system• EU lobby on social insurance is still strong• political climate, sense of urgency and co-

operation of health insurers is necessary for change

• mainly local market; cultural and social determined


E. Lessons?

• Privatising social health insurance is possible, but:

• Take time to prepare (risk equalisation, turning sickness funds into market players)

• Be prepared to compromise on key elements (but not on ultimate goals!)

• Look to consumers for support• Pay attention to health care providers• And: when momentum is there, keep it going

(and don’t try to win a popularity contest…)


1 augustus ’15 the dutch health insurance system wout dekker, manager of communications &...

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