Holland - An Alternative Healthcare Model

Toro

Senate Member
I find this debate on whether or not health care is better in Canada or the US to be stale - as if there are no other alternatives.

Well, here is one country that is a mixture of both. I am no expert on healthcare financing, but I feel the solution, or quasi-solution, between the problems in health care for Canada and America lies somewhere in between the two systems.

The Netherlands.

The Netherlands is using competition and a small dose of regulation to pursue what many in the U.S. hunger to achieve: health insurance for everyone, coupled with a tighter lid on costs.

Since a new system took effect here last year, cost growth is projected to fall this year to about 3% after inflation from 4.5% in 2006. Waiting lists are shrinking, and private health insurers are coming up with innovative ways to care for the sick.

The Dutch system features two key rules: All adults must buy insurance, and all insurers must offer a policy to anyone who applies, no matter how old or how sick. Those who can't afford to pay the premiums get help from the state, financed by taxes on the well-off.

The system hinges on competition among insurers. They are expected to cut premiums, persuade consumers to live healthier lives, and push hospitals to provide better and lower-cost care.

Some are already taking unusual steps. The insurance company Menzis has opened three of its own primary-care centers to serve the patients it insures, and plans to open dozens more in a move to lower costs. Rival UVIT offers discount vouchers to customers who buy low-cholesterol versions of yogurt, butter and milk.

To prevent insurers from seeking only young, healthy customers, the government compensates insurers for taking on higher-risk patients. Insurers get a "risk-equalization" payment for covering the elderly and those with certain conditions such as diabetes. ...

What works in the Netherlands, a small country of 16.6 million people, may not readily apply to America. A Dutch-style scheme would likely raise opposition among U.S. doctors and Republicans who are cautious about higher taxes. But many U.S. states are similar in size, and one, Massachusetts, is already experimenting with a universal-coverage scheme.

"The lesson for America is that this is what we ought to do," says Alain Enthoven, a professor at Stanford University.

Three decades ago, Prof. Enthoven published a pioneering proposal for what he called "managed competition," a version of which the Dutch have now adopted.

The Enthoven plan partly inspired the Clinton administration's failed health-care overhaul effort in the 1990s. It has now come full circle. Last October, an economist from the Dutch health ministry was invited to describe his country's new approach to about 50 Massachusetts politicians and policy makers in Boston, as the state was developing its own plan for mandatory health insurance. ...

The notion of competition among insurers is nothing new to Americans. Most Americans under 65 get insurance via their employer, which can compare plans and pick the one that it thinks offers the best coverage for the money. To cut costs, U.S. insurers bargain with doctors for discounted rates and try to weed out overbilling and frivolous treatments.

The system has failed to stop U.S. health costs from shooting up, and it has left many doctors complaining that their medical judgment is being second-guessed by bean counters. It isn't clear that a Dutch-style system, also centered on insurer competition, could do any better. Dutch doctors were among the most vociferous opponents of an overhaul and many remain skeptical.

Still, there are some differences in the Dutch way that may work to its advantage. One is the emphasis on individuals buying coverage. In the U.S., employers tend to be poor buyers of health care. They're unfamiliar with the needs of the people actually using the health care -- their employees -- and it is difficult for a large company to switch insurers.

By putting the onus on consumers, Dutch officials hope that more people will get the coverage they need. The "risk equalization" that helps Dutch insurers cover sicker people is also critical. In the U.S., competition among insurers often means competition to find the healthiest customers, especially in the individual market. ...

n late 2004, the Dutch House of Representatives passed a law to usher in mandatory health insurance and switch people on state-run insurance to private carriers. But family doctors fretted that it would allow insurers to interfere in medical decisions, for example by pushing cheaper drugs.

The following May, thousands of Dutch general practitioners went on a three-day strike. Some tied their hands together with rope to symbolize their helplessness. In response, Mr. Hoogervorst promised to provide some protections for doctors in the new legislation. One of them was that patients wouldn't bear a big financial cost if they chose to go to a doctor not under contract with their insurer. Soon after, the senate approved the new plan.

It took effect on Jan. 1, 2006. Despite predictions of chaos, the changeover was surprisingly smooth. The government set up a Web site where consumers could analyze insurers' offerings. Consumers were allowed to switch insurers once a year. As 2006 approached, the health ministry predicted that only 5% would bother. Instead, nearly 20% of people switched, either to get a better price or because they were dissatisfied with their insurer. ...

In most European countries, consumers have no idea what their health insurance costs because they are covered by national health-insurance schemes financed by payroll taxes, as used to be the case in the Netherlands. On a visit to Germany last year, Mr. Hoogervorst boasted that thanks to his country's switch to private insurance paid by individuals, "no other European country has a population so keenly aware of the costs of their health-care insurance."

Now that they see the bills more clearly, some consumers feel their payments have gone up. In one survey mainly of labor-union members, about 70% said they were financially worse off in some ways. ...

The real test of the Dutch approach is yet to come: Can insurers push hospitals to lower their costs and improve their quality? Insurers have clout because they can direct large numbers of patients toward particular hospitals. But, in a holdover from the old system, insurers can currently negotiate prices for only 10% of the services hospitals offer. The figure will rise to 20% by the end of this year, and continue to go up.

Because Dutch hospitals used to receive fixed prices for their services, and got more money for more service regardless of quality, they had little incentive to improve their care. Under the new system, insurers should be providing that incentive, but Mr. Hoogervorst acknowledges, "There's still a long way to go to increase competition among hospitals." ...
WSJ
 

#juan

Hall of Fame Member
Aug 30, 2005
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And this system has been going foe a year........Maybe we should let it run for a few years before we get too excited.
 

tracy

House Member
Nov 10, 2005
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California
It is interesting though. I like the idea of mandatory insurance. People like to complain about all the uninsured down here and it is bad if people genuinely can't afford healthcare BUT there are people who just choose to risk it and not spend money on health insurance. They could, they just don't want to. So, when they wind up in the emergency room and rack up a bill they could never pay, we all wind up paying it for them. That isn't fair IMO.