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Choice of providers and mutual healthcare purchasers: the Dutch reforms Gresham College 27 January 2011 Wynand P.M.M. van de Ven Erasmus University Rotterdam [email protected]. The Netherlands. Kaartje Europe. Three waves of health care reforms. - PowerPoint PPT Presentation
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Choice of providers and mutual healthcare purchasers:
the Dutch reforms
Gresham College
27 January 2011
Wynand P.M.M. van de VenErasmus University Rotterdam
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The Netherlands
⢠Kaartje Europe
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Three waves of health care reforms
In many OECD-countries three consecutive waves of health care reforms can be discerned:
1. Universal coverage and equal access;
2. Controls, rationing, and expenditure caps;
3. Incentives and competition.
David Cutler, Journal of Economic Literature 2002(40) 881-906.
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Key elements of reform debate
1.Who is the purchaser of care on behalf on the consumer?
2.Yes/No competition among:
â Providers of care?
â Purchasers of care (= insurers)?
3.Which benefits package? Which premium structure?
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Dutch health care system⢠Health care costs 2006: 10% GDP;⢠Much private initiative and private
enterprise: physicians, hospitals, insurers;⢠Still much (detailed) government regulation;⢠GP-gatekeeper;⢠Health insurance before 2006 a mixture of:
mandatory public insurance (67%),voluntary private insurance (33%).
⢠From 2006: mandatory private insurance (100%).
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Reforms since the early 1990s
The core of the reforms is that:Risk-bearing insurers will be the
purchasers of care on behalf on their members;
Government will deregulate existing price- and capacity-controls;
Government will âset the rules of the gameâ to achieve public goals.
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Health Insurance Act (2006)
⢠Mandate for everyone in the Netherlandsto buy individual private health insurance;
⢠Standard benefits package: described in terms of functions of care;
⢠Broad coverage: e.g. physician services, hospital care, drugs, medical devices, rehabilitation, prevention, mental care, dental care (children);
⢠Mandatory deductible: âŹ165 per person (18+) per year.
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Consumer choice⢠Annual consumer choice of insurer
and choice of insurance contract:â in kind, or reimbursement, or a
combination;â preferred provider arrangement;â voluntary higher deductible: at most
âŹ650 per person (18+) per year;â premium rebate (<10%) for groups.
⢠Voluntary supplementary insurance.
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Health Insurance Act (2)
⢠Much flexibility in defining the consumerâs concrete insurance entitlements;
⢠Selective contracting and vertical integration in principle allowed;
⢠Open enrolment & âcommunity rating per insurerâ for each type of health insurance contract;
⢠Subsidies make health insurance affordable for everyone;
⢠Risk equalization.
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Risk Equalization Fund (REF)
premium (18+)
REF-payment based on risk adjusters
REF
Insured Insurer
Income-related contribution
Govât contribution (18-)
(50%)
(45%)
Two thirds of all households receive an income-related care allowance (at most ⏠1,464 per household per year, in 2008)
)
(5%)
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Regulated Competition⢠Competition among health insurers:
consumers have a periodic choice among health insurers or âhealth plansâ (âorganizations in which insurer and providers are integratedâ);
⢠Competition among providers of care:insurers may selectively contract with
providers;⢠Not a free market; regulation to achieve
societyâs goals.
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Evaluation Health Insurance Act dec09
The HI Act-2006 is a succes in the sense that:
⢠No political party or interest group has argued for a return to the former system with a distinction between sickness fund and private health insurance.
⢠There is broad support for the option to annually choose another insurer or health insurance contract.
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Positive effects
⢠Good system of cross-subsidies (âsolidarityâ);
⢠Standard benefits package available for everyone, without health-related premium;
⢠Annual choice of insurer/contract;
⢠Strong price competition among the insurers;
⢠Increasing information about price and quality of insurers and providers of care);
⢠Increasing insurersâ activities in purchasing care;
⢠Quality of care is on top of the agenda.
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Preconditions managed competition
1. Risk equalization2. Market regulation:
a. Competition Authority;b. Quality Authority;c. Solvency Authority;d. Consumer Protection Authority;
3. Transparencya. Insurance products
(Mandatory Health Insurance & Voluntary Supplementary Insurance)
b. Medical products
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Preconditions managed competition4. Consumer information;5. Freedom to contract;6. Consumer choice of insurer;7. Financial incentives for efficiency;
a. Insurers;b. Providers of care;c. Consumers;
8. Contestable markets:a. (sufficient) insurers;b. (sufficient) providers of care.
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Are the preconditions fulfilled?Precondition 1990 (SF) 2010
Risk equalization - - +
Market regulation:Competition Authority;
Quality Authority;
Solvency Authority;
Consumer Protection Authority;
-
+
NA
NA
+ +
+
+ +
+
TransparencyMandatory Health Insurance
Voluntary Supplementary Insurance
Medical products
+ +
-
- -
+
-
- / +
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Are the preconditions fulfilled?Precondition 1990 (SF) 2010
Consumer information - - - / +
Freedom to contract - - - / +
Consumer choice of insurer - - +
Financial incentives for efficiency:Insurers;
Providers of care;
Consumers;
- -
-
- -
- / +
- / +
+
Contestable markets:(sufficient) insurers;
(sufficient) providers of care.
- -
- -
+ +
- / +
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Key issues⢠Insurers are reluctant to selectively contract
because of a lack of information on the quality of the (selected) providers of care;
⢠Good risk equalization is a precondition to make insurers responsive to the preferences of the chronically ill people;
⢠Who bears responsibility if a hospital goes bankrupt: government or the insurers?
⢠Supplementary insurance should not hinder chronically ill people to switch insurer;
⢠Managed competition under a global budget?
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Conclusions⢠Evaluation of Health Insurance Act:
On balance positive, despite some serious problems.
⢠So far the reforms were focussed on the health insurance market;
⢠Although insurers have some degree of freedom to contract with providers of care, there is still a lot of government regulation with respect to prices.
⢠The next years the reforms will focus on the provider market.
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Challenges
⢠Are insurers capable of being a prudent buyer of care on behalf of their insured?â If NOT, what then is the rationale of a competitive
insurance market with all problems of risk selection?
⢠Is government prepared to give up its traditional tools (i.e.: supply-side regulations) for cost containment?
⢠The Dutch health care reform is work-in-progress. So far, the jury is still out.