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Watch the fourth lecture from 8 lectures course running under the title „Innovation for better healthcare” at University for modern Slovakia. In this lecture, Peter Pažitný explains why is the Dutch Healthcare considered as the best in Europe. The lecture video includes English subtitles. Transcript together with the all schemas can be found under the video.
European Health Consumer Index (EHCI) ranking:
The Dutch victory was highlighted with a recommendation by the authors: „It’s time to learn from the Dutch champions on how to create an efficient healthcare system.“
The Netherlands is the first country in the world, which consistently implements the model of Alain Enthoven based on universal coverage that follows managed competition in the private sector.
Managed competition of Alain Enthoven is defined as the purchasing strategy with the aim to obtain maximum value for consumers. It applies competition rules derived from microeconomic principles. The key role is held by the sponsor (in case of the Netherlands it is the state), which represents a large number of subscribers, determines the amount of sponsor’s contribution and organizes, structures and sets the health insurance market.
The sponsor (the state) has to:
Managed competition:
Everyone is obliged to purchase:
The health insurance company is obliged to accept each insured:
Health insurance companies in the Netherlands are joint stock companies having the possibility to make profits. In 2011, the insured had the chance to choose from 56 different health insurance contracts in 27 health insurance companies. In 2012, the number of health insurance contracts has slightly increased to 59 and the number of health insurance companies decreased to 26. The four largest holdings of health insurance companies in the Netherlands possess 90% of the market. The largest player – Achmea (also the owner of the Slovak health insurance company Union) possesses a market share of 32% in the Netherlands.
The competition among health insurance companies occurs in an efficient purchase of healthcare services and administration of the system. Health insurance companies compete with the amount of nominal premiums for the basic benefit package of health insurance and the type of insurance contracts (products), which they offer to the clients.
The insured have the right to change health insurance companies once a year, the contract with the health insurance company is always signed for one year. In 2012, lots of insured changed their health insurance companies – 1 million people in total, equivalent to 6% of all insured.
In the Dutch health insurance system, there are three financial flows:
Source: Schäfer W, Kroneman M, Boerma W, van den Berg M, Westert G, Devillé W, and van Ginneken E. The Netherlands: Health system review. Health Systemsin Transition, 2010; 12(1):1–229.
Nominal premiums:
Source: Prepared by the author
Note: the model is simplified, the amounts stated are approximate
As we have already mentioned, each Dutch persons (besides children up to 18 years) is obliged to get insurance:
Nominal premiums return people the possibility to decide about their health insurance products according to their preferences. As there is competition between the products based on their price, the decisions of consumers are price-sensitive. Expenditures for nominal premiums directly compete with other expenses of households.
In order everybody in the Netherlands can afford to purchase a health insurance product (because that is the objective), the state provides compensation for purchasing nominal premiums. In total, one third of the population uses such compensations, which reach approximately 662 EUR per year.
Each Dutch person has to bear besides nominal premiums a so-called first copayment in the amount of 350 € (for 2013). This first copayment means that the first 350 € (for 2013) are paid by the customer from his/her own pocket. After purchasing healthcare services for the amount of 350 € (cumulatively), the health insurance company starts to bear the costs. These first copayments should discourage people from unnecessary healthcare spending. At the same time, it supports utilization of healthcare services, which are considered by the consumer as valuable.
This copayment may be increased with an additional one, a voluntary copayment, up to 500 €. Thus, total copayments of an individual may reach 850 € in total. Obviously, the higher the first copayment, the lower the premium.
The health insurance company Agis offers both of the following products. Agis is a brand that belongs to the concern of Achmea, In 2012, it had 5 different health insurance products in its portfolio:
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Pro Life Basispolis Basic |
TakeCareNow Internetbasispolis |
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Target group (for whom the product is meant) |
Strong Christian emphasis focused on life as the greatest value. The product is focused on Christian maternity care, nursing and palliative care. |
Product focused on young people, supported by a suitable web presentation and complementary products. Emphasis is placed on the internet as the main communication tool with the health insurance company. It tries to attract young people also with a wide range of online healthcare products. |
Scope of coverage/benefits (other than the legally prescribed basic benefit package) |
The advertisements of this product emphasize that it does not cover abortion, euthanasia and sex reassignment surgery. |
This product enables the access to all Dutch hospitals without prior authorization. |
Price of the product in 2012 |
108.25 EUR per month |
The amount of the premium depends on the level of copayment chosen. In case it is zero, the monthly nominal premiums are in the amount of 99.67 EUR. If the insured chooses the highest copayment in the amount of 500 EUR, monthly nominal premiums decrease to 78.84 EUR. |
Source: Mária Pourová, HPI 2013 based on the study on nominal premiums for the General Health Insurance Company (VZP) of the Czech Republic
Enthoven, A. C.: The History and Principles of Managed Competition, Health Affairs, Supplement 1993
European Health Consumer Index 2012 vydaný Health Consumer Powerhouse
Schäfer W, Kroneman M, Boerma W, van den Berg M, Westert G, Devillé W, and van Ginneken E. The Netherlands: Health system review. Health Systemsin Transition, 2010; 12(1):1–229.
Study on nominal premiums for the General Health Insurance Company (VZP) in the Czech Republic conducted by HPI and ReformaZdravotnictví.CZ (with a kind permission of Mária Pourová from HPI, who completed the chapter about nominal premiums in the Netherlands)