Americans hear a lot about the UK and Canada, so much that it sometimes seems like there aren’t any other countries out there. Sure, others pop up from time to time, often as mere entries on a list of nations that have single payer health care or, more ambiguously if more correctly, “national health care,” but real discussion of their ins and outs is thin.
However, given the broad agreement that uninsured Americans should be covered and the leeriness of many about letting government run health care, there is a lot we can learn from a country that has made use of both market competition and government regulation to produce a system where costs are under control, wait times and rationing are prevented, and coverage is universal: the Netherlands.
Presently, the Netherlands achieves universal coverage with a mandate that all resident buy health coverage. Those who don’t, receive a fine. To make sure everyone is financially able to participate, subsidies are given on a sliding scale up to a fairly high income threshold. Nonetheless, enforcement of the mandate has been limited and approximately 1.5 to 2 percent of people have not bought coverage.Another 1.5 percent joined an insurer but failed to pay their premiums.
The government sets the requirements for a basic (but quite comprehensive) health insurance package that is open too everyone, regardless of age, sex, or current health status. The companies can offer different types of further coverage on top of the basic plan and can take into account age and other variables on these packages. Competition is vital and insurers have come up with a variety of creative strategies to lure customers, reduce costs, and improve health. Premiums are also actually lower than anticipated, largely due to competition among insurers.
To compensate for the fact that the basic package is open to everyone at the same cost, insurers with more sick members get government funds to make up the cost difference. However, only 30 conditions are on the list used to pay out compensation, leaving some companies carrying increased costs and some patients with difficulty getting coverage above the basic plan.
Health coverage in the Netherlands is still mostly obtained through work. Each person pays an “income-related contribution,” 7.2 percent of income up to €31,200 for 2008, which is reimbursed by their workplace. On top of this, the Dutch pay a premium per adult (children are free) and taxes that are used to subsidize people who cannot afford health insurance on their own.
Health care is cheaper than in many countries, a basic package cost around €1,100 per adult in 2008 with a deductible of €150. Those willing to accept higher deductibles can get lower premiums. But one must beware that around 90 percent of people in the Netherlands opt to get further coverage so the actual typical cost is higher. Some companies also give higher reimbursement for in-network doctors than out-of-network ones.
Despite its successes, many doctors in the Netherlands dislike the new system. They feel that bureaucrats are watching over their shoulders and fear that there will be pressure to use cheaper treatments. Indeed, some insurers encourage the use of generics over brand name medication and given doctors bonuses for complying. Prices are set partially through negotiation between doctors and insurers but only about 20 percent of procedures are subject to such negotiation. Generic drug manufacturers have to accept a 40 percent price cut at the introduction of the new system.
A number of people in the US have seen the Netherlands as an interesting model for American health care and November 2007 from US Health and Human Services Secretary Michael Leavitt traveled there and spoke with a variety of people, from leaders to patients, about the health system there. The HHS said, however, that it “would not endorse a system like the Netherlands.”
As a warning, however, the system in the Netherlands is quite new; the law creating it was passed at the end of 2004 and was implemented only at the beginning of 2006. So while the news so far is largely good, we need to wait a while before more concrete conclusions can safely be drawn.
