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Jan-Kees Helderman, assistant professor in Comparative Governance and Public Policy at Radbouyd University Nijmegan, outlines how the Dutch health care system operates and reflects on the English health reforms.
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Health Reforms in England
The King’s Fund, London, 23 March 2011
Dr. Jan-Kees Helderman
Department of Public Administration & Political Science
Views from a Dutch perspective
Changing the Rules or the Game?
Liberating the NHS?
Revisiting Kenneth Arrow (1963)
“The problem with health care is that the social adjustment towards optimality will always put obstacles in its own path because of the uncertainty and non-marketability of the bearing of risks and the imperfect marketability of information. As a consequence, health care systems will always be confronted with second-best solutions in the form of compensatory institutional structures.”
• There are no Pareto optimal solutions for an equitable, efficient and affordable health care system
• So under what conditions can choice and competition become part of the second-best solution?
This depends on the institutional structures of the system and country at stake and our capabilities to reform them
Each system has its own rationale:
• Bismarckian health care systems and Beveridge systems evolved into different institutional configurations.
• Beveridge NHS system: • Tax funded National Health System• Purchaser / provider split: internal market
• Bismarckian Social Health Insurance system Sickness funds & for-profit health insurers (de-facto universal) Non-profit private providers National Health Insurance & regulated competition
• Both aim to address quality / equity / efficiency and costs by combining command & control / competition and collaboration
(Source: Davis K., Schoen, C., Stremikis, K (2010) Mirror, Mirror on the Wall, Commonwealth Fund)
A corporatist – Bismarckian – health insurance system
• Sovereignty and subsidiarity: corporatism
- What can be delivered in the private sphere should not be undertaken by the government
- Predominantly public financed and private delivery of health care
- Third party payer: sickness funds and private for-profit health insurers
- Independent not-for-profit health care providers
• The Dutch state is responsible for access, affordability and quality of health care, but not equipped to accomplish these responsibilities under its own strength
Private health insurance
White paper: Health on Demand (2001)
Simons-plan (1993)
Exceptional Medical Expenses Act (1968) National Health Insurance under private law, January 1st, 2006
Mid 19th century – World War II: Voluntary sickness funds
Purple coalitions (1994-2001)
Et Voila!
Centre-right Cabinet (2001-2007)
30A short historical overview of Dutch health care
Access to Health Insurance Act (1986)
Sickness fund decree (1941)
Sickness Fund Act (1964)
Dekker-proposals (1987)
1980s: why did we need reforms?
• Problems with equity
Bifurcated health insurance system
• Problems with efficiency
Fragmented finance structure / no incentives
• Problem with responsiveness
Little or no choice for enrollees / citizens
• Problems with cost containment
Dekker Committee (1987): Willingness to Change
Key elements of the Dekker proposals (1987)
• A new standard insurance for all, provided by social and private health insurers
- Basic package and supplementary insurance packages
- Health insurance fund: in order to compensate health insurers for their high risks in the basic package
- Nominal flat rate premiums with compensation for people on low incomes through individual health care allowance
• Consumer choice?
- Citizens can change insurer every year- Collective contracts allowed
• Competition?
- Insurers compete for the business of the insured - Selective contracting: competition in the providers market
Incremental gradual reforms
1. We came from a bifurcated system of sickness funds and private health insurers
2. We introduced very incrementally a system of regulated competition together with the introduction of a basic health insurance for all
3. Because of sophisticated risk equalisation subsidies to health insurers, equity is ensured
4. Ending up in a full convergence of sickness funds and private health insurers
It took more than twenty years to accomplish this
CentralHealth Insurance
Fund
employer
State
(Ministry of Public Health, Well-being and Sports)
citizen
Health care allowance
State contribution (5%)
Income-dependent contribution (50%)
Healthinsurer
Health careprovider
Nominal premium (45%)
Reimbursement of costs -/- personal excess
Payment of health care bills
The Dutch Health Insurance SystemIn
com
e s
olid
ari
ty
Income solidarity
Risk-adjustment subsidies
Risk Solidarity
Selective contracting: A /B segment
Monitoring & Supervision: Inspectorate for Health Care / Dutch Competion Authority / Dutch Health Care Authority
HEALTH CARE INSURANCE BOARD
Key actor: the health insurer
• Full convergence of sickness funds and private health insurers
• All 28 health insurers are private entities - Organised in 14 large insurance holdings- 4 largest companies hold 90% of the insurance market- Offering a wide variety of insurance plans- Collective contract with employers
• Selective contracting in the medical curative sector is still a marginal phenomenon
• Health insurers are also involved in the development of performance indicators
• Gradual transition from ex-post to ex-ante risk equalisation
• PbR: in 2012, 70% of all hospital care will be negotiable on price
Time:
2006DisplacementNew Health Insurance Act
1987
BLUEPRINTThe Dekker Plan
Conversion
1986 LayeringAccess to Health Insurance Act
Gradual improvement of risk equalisationGradual introduction of competition
Gradual convergene of health insurers
1980 Drift
Little reformist change
(passive political agency)
Large reformist change
(active political agency)
Figure 1. The extent of institutional change and associated ‘levels’ of agency
Gradual institutional change
“Detailed descriptions of types of incremental meandering would also be interesting; perhaps this would more clearly differentiate between a sequence that lead to reform and another that leads to revolution.” (Hirschman en Lindblom, 1962: 221).
Detailed descriptions of types of incremental meandering would also be interesting; perhaps this would more clearly differentiate between a sequence that leads to reform and another that leads to revolution.” (Hirschman en Lindblom, 1962: 221)
Learning by Monitoring
• Actors must learn how to (co-) operate in a market
- Exit – Voice & Loyalty
• Reforms ask for consistency and continuity, but also for carefully monitoring their (unintended) consequences.
Trust
Reputation
Reciprocity
Increasing levels of co-operation
Net benefits
(Elinor Ostrom, 1998, A Behavioral Approach the Rational Choice Theory of Collective Action. American Political Science Review, Vol. 92, No.1,pp.1-22)
Integrated careInnovationsPrevention
Reflections on England
• Stop and Go Reforms- 1989 Working for Patients / 1991 Internal Market > GP Fundholding- 1997 the New NHS > third way / 2000 the NHS plan > performance targets / 2002 Delivering
the NHS plan: provider competition / patient choice / 2004 The NHS improvement plan / 2008 NHS next stage review
• 2010 Liberating the NHS:
From NHS trusts to foundation Trusts An economic regulator: Monitor Strengthen the role of local authorities: integration of health and social care
Commissioning:- Abolition of SHAs and PCTs- GP-led commissioning by GP-consortia
- Independent NHS Commissioning Board?
Requires being capable of:• Assess needs• Develop data to analyse utilisation• Predict risk• Managing financial and insurance risks• Monitoring performance of providers
• Size of the regional offices?
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