johan van manen, netherlands healthcare authority

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Commissioning health care under the Health insurance act West North West Hospital group conference, October 9th, Westport Johan van Manen Netherlands Health care authority

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Commissioning Health Care under the Health Insurance act

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Page 1: Johan van Manen, Netherlands Healthcare Authority

Commissioning health care under the Health insurance act

West North West Hospital group conference, October 9th, Westport

Johan van Manen Netherlands Health care authority

Page 2: Johan van Manen, Netherlands Healthcare Authority

2

Distribution of hospital services in the Netherlands

• 131 hospital locations• 106 locations with facilities for outpatients

Page 3: Johan van Manen, Netherlands Healthcare Authority

3

Number of providers

2013

General hospitals 82

UMC 8

Independent Focus clinics

268

Annual spending on hospital care

2014

Hospitals 18.300 mln. €

Specialists’ fees 2.200 mln. €

Page 4: Johan van Manen, Netherlands Healthcare Authority

Health insurance companies

4

Total: 9 health care insurance groups, 26 labels

Page 5: Johan van Manen, Netherlands Healthcare Authority

Health insurance

Health care

providers

Risk adjustment

fundState

budget/Tax Office

Households

Health authority

1 2

3

4

56

7

8

910

1 income dependent premiums2 subsidies 3 nominal premiums + deductible4 payments into risk adjustment fund5 risk equalisation health insurers

6 payments for contract / health care services7 directives for services of general economic interest8 compensations for services of general economic interest through Health Care institute 9 charges for exceeding MoH budget10 health care services delivered to patients

Financing HIA

Page 6: Johan van Manen, Netherlands Healthcare Authority

Responsibilities in health care act

Page 7: Johan van Manen, Netherlands Healthcare Authority

Basic characteristics

1. Health insurance:- After 2006, HI no longer required to contract all providers- diminishing ex post compensations in risk adjustment scheme HI- In theory unlimited care on individual level (within basic coverage)

2. Regulatory changes:- Gradual price liberalization since 2005, hospital budgeting system

abolished in 2013- Hospital care has over 70% free pricing

- Decentralization of investment planning- Providers bear risk on exploitation of infrastructure- Influence of HI on capacity and distribution

- In 2012, introduction of services of general (economic) interest in health care

- Fundamental changes in tariff system (DBC) in 2012- Collective bargaining (HI) banned under competition law

Page 8: Johan van Manen, Netherlands Healthcare Authority

Recent changes in commissioning

1. In commissioning care HI apply minimum requirements as to number

of procedures performed, number of patients treated etc.

2. Small hospitals face problems meeting requirements, forcing them to

close down services, or seek cooperation with other providers.- Full service small hospitals will probably not survive as independent

providers

- Tendency towards mergers and / or larger hospital organisations

3. Standards are not imposed by MoH, HI can use self developed

standards- Exception: emergency service must be accessible within 45 minutes for

every inhabitant

4. HI plans to reduce number of emergency services shelved by order of

the competition authority (ACM)

5. Commitment to finish annual contracting cycle (t+1) in november (t)

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Page 9: Johan van Manen, Netherlands Healthcare Authority

Financial issues and MoH intervention

1. In 2011, MOH reached agreement with national health care

associations to limit growth in expenditure (2012-2017). Annual

growth 1%- Legislation enabling across the board cuts in revenue

2. Immediate effect on commissioning and contract negotiations- Agreement serves as guideline

3. Reduction in both growth in expenditure and HI premiums

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Page 10: Johan van Manen, Netherlands Healthcare Authority

Expected changes in near future

1. For 2015 a number of changes are expected:

- Hospitals will be allowed to change into ‘for profit’organisations

- A rise in premiums + deductible

- Change in Health insurance act: consumers loose right to

reimbursement for care by non- contract provider

- Further extension of covered package

- Formerly long term care brought under HIA

2. VGZ announces changes in commissioning policy, hospitals with

below average performance will loose contracts

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Page 11: Johan van Manen, Netherlands Healthcare Authority

Lessons learned (1)

1. Rising premiums and rising HI’s profits are a sensitive issue with

public and politicians alike

2. Nominal premiums are kept in check by competition so far

- But: we don’t know if without the MoH intervention, rise in

expenditure would have been curbed

3. Little discussion about the system as such but HI premiums are

means of income policy and often cause for political debate

4. In hospital care, ‘selective contracting’ still only in infant stage

5. Although HI claim to emphasize quality aspects in commissioning,

hospitals complain that across the board price cuts and lumpsum

contracting are standard practice

6. 2012 changes in tariff system, combined with other changes in

system proved too complex to handle

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Page 12: Johan van Manen, Netherlands Healthcare Authority

Lessons learned (2)

1. There is some concern about the growing power and influence of the

health insurers.

- Monopsony in some regions?

2. Both sellers and buyers show tendency towards concentration

- In some regions, (very) limited choice in providers

- Cause for concern: hospitals and insurers becoming ‘too big too fail’

- Threat to stability of the system

3. Discussion and compromise on right to choose one’s provider/ physician:

- Restrictive contracting will not apply to GPs

4. Signs of strain:

- Re-occurrence of waiting lists:

- 1 highly specialised provider put new patients on waiting list

- 2 hospitals limited access for HI’s clients, due to contract issues

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Page 13: Johan van Manen, Netherlands Healthcare Authority

Overall conclusions on commissioning

1. Lack of long term MoH view on capacity and / or regional distribution

- Only minimum standards and broad/global standards on

commissioning / required level of care

2. Maintaining adequate level of services by HI could be problematic in

some areas

3. At the same time, MoH intervenes at every level imaginable, only by

way of informal procedures and agreements

4. Agreements on national level are counterproductive to ‘real’

competition

5. Concentration in the market leads to mutual dependency of HI and

hospitals: both try to avoid risk / loosing market share

6. Disappearance of small providers causes lack of choice

- Little distinction between HI

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Page 14: Johan van Manen, Netherlands Healthcare Authority

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Thank you for your attention!

Contact:Johan van ManenNZaPostbus (Po box) 30173502 GA Utrecht (NL)E: [email protected]