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Healthcare: a Healthy Market?

This week, on Thursday 13 December, Room for Discussion will host an interview under the title “Zorg: een gezonde markt?” – Healthcare: a healthy market? The interview will be held in Dutch and the guests are Georgette Fijneman, CEO of the insurer Zilveren Kruis, and Ernst van Koesveld, director of Healthcare Insurances at the Ministry of Health, Welfare and Sport.

To those that do not know much about the healthcare system in the Netherlands, let us first put things into context. The Dutch healthcare system is structured in two levels: the insurance and the provision of health. Most of the insurers are private organizations seeking for profit (despite with important restrictions like the ban to distribute profits to shareholders), while most of health-providers (hospitals in the broader sense) are non-profit foundations. Each insurer company negotiates with hospitals the costs and the services delivered to their policyholders.

Apart from the state-controlled basic mandatory insurance, customers are free to choose the package best fits their preferences. The cost of these packages is mainly financed by the customers themselves, who must pay the so-called premium, whereas the remaining costs are funded by the state. The affordability of the system is guaranteed by setting progressive premiums relative to personal income and other criteria. Another measure to contain the costs of healthcare is the mandatory deductible of 385 euros. This compels demanders of health care to pay at least the first 385 euros of their own pockets, depending on what insurance coverage you have. This not only pays part of the health care expenses, but also deters people from demanding health care for small medical procedures.

According to an annual index compiled by the Health Consumer Powerhouse, the Dutch healthcare system is considered “the best healthcare system in Europe”. The extraordinary performance of the Netherlands is not only such that it has been ranked first in 2016, but that it has also remained at the top since it was first evaluated back in 2005.

However good it may sound, it is not all good news. In the past weeks, the Dutch health system has been mixed up in serious scandal. In October this year, the MC Slotervaart Hospital in Amsterdam and the MC IJsselmeer hospitals in Lelystad, capital of the province of Flevoland, fell into bankruptcy. As a result, hospitalized patients in the Amsterdam hospital had to be moved to others in the city. The hospitals in Flevoland appear to be even in a worse situation: long distances to hospitals and several insolvent hospitals are threatening many people’s access to health care.

In addition, all over the Netherlands, the premiums that patients must pay to the insurance companies have been rising at a fast pace in the last years, achieving record high levels. According to a study conducted by the MoneyView Institute, in 2019 the premiums are expected to increase by 5.6% on average. Some insurers, such as Zilveren Kruis and CZ, have announced even higher rises.

In the past, both the public and the private health systems coexisted. However, in 2006, the state stepped away from the management side, which remains open to competition between private insurers and hospitals. Although the state keeps controlling and allowing the access to health services, the new reform has emphasized the independence from governments, and patients play an increasing role by making their own decisions.

Some experts have criticized the new model, because the decrease of costs that was expected with the promotion of competition never took place, quite the contrary. As the rise of health costs is out of control (chiefly due to the increase of the aging population and the application of new, costly technologies), insurers are incurring into big losses.

One can easily observe that market mechanisms are not performing well enough to slow down the rise of healthcare costs. So, what role has played each actor in this story? Insurers blame hospitals for mismanagement and high costs. Customers are angry with the insurers for the rising premiums and with the hospitals for its lower quality. Is the government acting reasonably? Who is going to pay the cost of the bankrupt hospitals? 

Come up this Thursday at 13h at the E hall in the Roeterseiland Campus and you will know more!


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