Healthcare Reform

Massachusetts approves the first healthcare coverage reform bill which guarantees health insurance for all Massachusetts residents. This could be significant since our current healthcare financing system is far more complicated than it needs to be. The Institute of Medicine found that 18,000 Americans die every year because they don’t have health insurance. The United States spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage. Yet more than 41 million Americans have no health insurance. Many more are underinsured. Confronted by the rising costs and capabilities of modern medicine, other nations have chosen national health insurance (Physicians' Working Group for Single-Payer National Health Insurance, 2003).

So how are other systems operating? There is so much discussion on healthcare reform here, I wondered if the same discussions were happening elsewhere. Some changes are happening in the Netherlands. The goal of reforms in the Dutch healthcare system is to increase the system's efficiency and its responsiveness to patient's needs, while maintaining equal access (Schut & Van de Ven, 2005).

Originally the healthcare system in the Netherlands worked within a combination of the private and public sectors. According to the Healthcare Market Review (2004, October), there are three components.

• public insurance for long-term and high-cost treatments, the Algemene Wet Bijzondere Ziektekosten, (AWBZ)
• ‘common medical care’
o public insurance for income groups below the statutory ceiling, the Sickness Funds Act, the Ziekenfondswet, (ZFW)
o voluntary private insurance for income groups above the statutory ceiling
• voluntary private insurances for complementary and supplementary care.

All voluntary private insurance is within the private sector. The Dutch government felt that this system was not working. The year on year expenditures were too high. The problem is that common medical care component is divided into two parts which is also a central supply-led system. The government would like to change to a demand-led system.

With the hope of balancing supply and demand and decreasing costs they changed the three components. The standard medical care component was 100% in the private sector rather than the previous 30%. This component would include all common medical care plus some from the first and third components.

To increase customer awareness of health costs, a no claim refund will be incorporated.

This will be to a maximum of €250, although for some sectors of health provision, such as general practitioners (GPs), any costs of consultation/treatment incurred will not, or will only partially, be taken into account when deciding on entitlement to a ‘no-claim’ refund (to discourage deferment of needed medical advice/treatment) (Healthcare Market Review, 2004).

Insurers can differentiate and compete among each other for the details of the design. Purchasing insurance and acceptance of insures is compulsory. There will be no premium differentiation. If they have a disproportionate share of risk, they will be compensated through risk equalization.

Premiums will be on an income and per person basis. The employer pays the income dependent premium while the employee pays the per person premium. Those who are self employed pay both while minors are covered by the government. The per person part will be the larger percentage of the premium making the employee pay more. For those with low incomes, there is compensation through tax relief. Insurers are no longer obligated to contract with all suppliers. They would be able to negotiate.

This sounds more and more like the direction of the system in the US. I could not find if this system was officially incorporated yet. In the article written in 2004, they mentioned that the changes would begin January 2006. With the new conservative government in the Netherlands now, I would not be surprised if this was, in fact official.

Healthcare Market Review (2004, October). Reforms in the
Dutch health system. Retireved February 6, 2006 from:
http://www.watsonwyatt.com/europe/pubs/healthcare/render2.asp?ID=13851

Physicians' Working Group for Single-Payer National Health
Insurance (2003). Journal of the American Medical Association, 290:798-805.Retrieved April 12, 2006 from:
http://jama.ama-assn.org/cgi/content/abstract/290/6/798

Schut F.T & Van de Ven, W.P (2005). Rationing and competition
in the Dutch health-care system. Health Econ, 14(Suppl 1):S59-74.