We never promised a cheaper system. If you look at the forecasts for healthcare expenditures, you always have the curve rising, but we basically want to bring that curve down.
The United States isn’t the only country wrestling with how to improve its healthcare. The Netherlands began looking to overhaul its aging system nearly a decade ago to address rising costs and growing questions about performance. Sound familiar? The revamp in this European nation of 16.6 million resulted in the Health Insurance Act of 2006, which created a system of universal coverage delivered exclusively through private insurers. The fact that it is not a single-payer system—taboo to many Americans—but rather a private health insurance system functioning within public guidelines has some officials in the United States touting it as a potential model for U.S. reform.
Some highlights of the Dutch system: a government mandate requires everyone to take out insurance. For those who can’t afford the equivalent of about $1,600 a year that the insurance costs in income-related contributions, the state helps out. A risk-equalization fund provides money to insurers that end up with a lot of sick or “high-risk” customers, preventing any insurer from denying coverage because of pre-existing conditions. More than 98 percent of the Dutch population has coverage.
What’s the idea behind the reform? Insurers will be encouraged to keep a lid on costs as they compete for customers and negotiate prices with providers, while individuals will become more aware of what it costs to pay for care since the money is coming out of their own pockets.
U.S. health officials in the Bush Administration paid a visit to the Netherlands to check out the plan in action, but it’s unclear whether President Barack Obama, who has pledged to reform healthcare despite a deteriorating U.S. economy, has given the Dutch system a serious look. The Burrill Report’s Eric Wahlgren spoke to Paul Thewissen, Counselor for Health, Welfare and Sport at The Royal Netherlands Embassy in Washington, D.C., about the record of the new Dutch system and what elements might be useful to U.S. reformers. Edited excerpts of the conversation follow:
Q: What was the impetus behind the Dutch healthcare reform in 2006?
A: We started working on it around 1999-2000. The reasons were similar to the reasons you have in the United States. Healthcare costs were rising, and at the same time, we were looking at the performance of our healthcare system. We thought there was a need to improve the system’s outcomes.
Before 2006, in the Netherlands we had several types of insurance. Private insurance covered about a third of the population. We also had social insurance programs like most other European countries. That was the system for two-thirds of the population.
Private health insurers were competing for clients. In the social sickness funds as they were called, everyone could change insurance and had to be accepted all the time. We had two competing ways of insuring. From a management perspective, the idea was to have just one system with one set of rules for all the players in the game.
Q: Part of the reason for the reform was to get the public better in touch with what healthcare really costs. Has the reform been successful in making the system more efficient?
A: Yes and no. It’s hard to determine. Under the new system, every person can change health insurers every year. The big change after 2006 was that the Dutch became aware of the ability to change health insurance coverage. In the first year, about 25 percent of the population changed either health plan or insurer. In the year after that, it went back to 3 percent to 5 percent.
When we designed the system, if you had 3 percent to 5 percent of the population that was changing insurers every year, you were keeping the system competitive. You don’t want a quarter of the population changing insurers every year because then something is wrong.
You do see an awareness about being able to move around and people are looking at the cost of the premiums for the health plans. I think the range between the cheapest and the most expensive is about 200 Euros a year [$272]. It is not that big, but it is big enough to look around.
What is more important, people are more aware of the quality differences and the possibility to lower costs. The government has a website that lists all the plans and what they cost. It looks similar to the website you can go on to compare Medicare Part D plans in the United States.
Q: What about comparing quality among providers?
A: On that same website we have some indicators for quality. But it is more like for services, such as how insurers are doing in providing services. You see growing attention to that.
In the Dutch system, there is a mandatory annual co-pay of 150 Euros [$204]. But the insurers have the ability to waive that co-payment if patients go to certain providers. What some insurers are trying to do now is encourage patients to go to a certain provider. They say to the insured individual, “you can go to any of the hospitals of your choice, but if you got to the hospitals on this list, we will waive the co-payment and guarantee that the procedure is done in a certain time frame and guarantee the quality is good.”
Q: There is apparently a requirement in the Dutch system that individuals generally must consult their general practitioner in order to go see a specialist or access other types of services. Is that GP a gatekeeper?
A: The doctor is not a gatekeeper. The doctor is more focused on trying to coordinate your care and having an overview. If I were to have a health issue, the first thing I would do is go to my GP. More than 98 percent of the Dutch have their own GP. You discuss your issue with your GP and then you make a decision about going to a hospital. There is a difference between the United States and the Netherlands. What we regard as hospital care is all specialties based in that building. In America, quite a big number of specialists work outside of the hospital.
In the Netherlands, you have an ability to choose. You use your GP to discuss your health issue and they give you advice and suggest what to do. Often, you end up in a nearby hospital, but you can choose to go to another hospital. But the GP is not a gatekeeper in that you have to go to a certain hospital or a certain specialist. In a lot of cases, it makes sense to keep the GP involved. But if you have chronic disease and you are used to seeing a specialist in a hospital, it makes less sense to go back to a GP for diabetes all the time, for example.
Q: To what extent to you think the Dutch system is a model for the United States?
A: You can’t copy and paste the system. Healthcare is also based on values and traditions of the country. At the same time, it is worthwhile it to look around and see what we did and how we did it.
In the Netherlands, we introduced an individual mandate that requires people to sign up for health insurance. We have a private health insurance system, but it’s within public guidelines.
One of the things that folks in California were looking at was the pooling of big groups of employer contracts together and sharing risks among them. We have a risk-adjustment scheme.
Have a look at the individual mandate. Have a look at the risk-adjustment scheme. Have a look at the way we are organizing. There was an idea in the United States to create a federal health board to solve some of the technical issues regarding healthcare. We’ve done this in the Netherlands. The government is responsible for some things. We also have an institution that takes some of the more technical decisions—how to organize risk-adjustment scheme, what to include in the benefit package, for example—out of the heat of the political debate.
Q: Has anybody from the Obama Administration reached out to the Netherlands to discuss your health reform?
A: Not yet. But maybe it is too early for that. Secretary Mike Leavitt [the Secretary of Health and Human Services under President Bush] was about to go to the Netherlands, but he cancelled at the last moment. His staff was already in the Netherlands. I met them.
But during the campaign, there were some people who were looking at the Netherlands who were some way involved with the Obama team.
Q: Despite the reform’s reach, isn’t there still about 1.5 percent of the public that’s not covered in the Netherlands?
A: The total number of uninsured is about the same that we had before. You cannot compare our 1.5 percent uninsured to 17 percent in the United States. But right now, we have two groups that are of a concern. One group refuses to take out health insurance. And we have a second group of individuals who took out health insurance but aren’t paying the premium.
Next year, there will be a stronger effort to go after then. If someone is not registered with any health insurer, they will receive a letter from the government reminding them to take out health insurance. If that fails, as of next year, we will have the legal authority to go to the person’s employer and ask that the premium be deducted from the wages.
Q: Nobody in Holland can be denied insurance because of a pre-existing condition?
A: All insurers are required to accept people, but there are a few exceptions. If you have not made your premium payments, that insurance company has a right to refuse you. But basically, you can’t be refused because of your health status, your age, or whatever.
Q: Has the reform helped bring down costs?
A: It’s too early for that. And we never promised a cheaper system. If you look at the forecasts for healthcare expenditures, you always have the curve rising, but we basically want to bring that curve down. The population will still get older and people need more care when they get older. It’s true that you can’t see an immediate response in the quality of care or the cost of care.
But you do see some differences. We see some insurers specializing in groups, such as the elderly or diabetes patients. Groups that are not usually attractive for an insurer can became attractive because of the risk-adjustment scheme. You can get more money for covering individuals in these groups. It seems to make sense for insurers to organize care in that way. That’s a new development.
What you also see is that insurers are becoming more involved in the care. Several health insurers are participating in primary-care clinics because they want to put more emphasis on primary care.
The goal is to get costs increasing at a slower rate. You can do that by trying to organize care in a better way. Right now, about 30 percent of the prices in the hospitals are freely negotiated between hospitals and insurers. The negotiation between quality and cost of care are really starting.
March 20, 2009