WORLDVIEW: Dutch Improve Care and Cost Through Competition

When the health care conversation heated up a year or so ago, a spate of articles focused on the Dutch health care system. In the Netherlands, everyone receives health coverage through a network of private insurers, and there is strict government regulation to ensure that everyone competes on a level playing field. We heard very little about the Dutch system for awhile -- but recently, there's been another round of reporting, including this piece from the NewsHour with Jim Lehrer.

The Netherlands passed major health reform in 2006. Most of the Dutch are "wealthy and healthy," reports the NewsHour, but the country has struggled with rising health care costs due to increases in the number of elderly and young immigrants from the developing world. When the Netherlands reformed its health care system, the country had similar goals to the U.S. -- lower costs in the long run, provide sustainable coverage to everyone, and unleash competition amongst private insurers, according to the NewsHour. (The Dutch have had near universal coverage since 1941, when the government introduced a mandatory health coverage plan for low and middle income citizens, according to Health Affairs).

The Netherlands has an individual mandate -- everyone is required to purchase insurance. The Dutch government subsidizes low income individuals so they can afford the premiums. Subsidies also exist in all versions of pending health reform legislation in the U.S., but how large the subsidies will be, and who will get them, is still a matter of contention for some lawmakers.

Rather than the "bronze, silver, gold, and platinum" plans in U.S. health reform legislation, the Netherlands offers plan to its citizens ranked on a scale of one to four stars. According to the NewsHour, everyone must buy a basic plan, for approximately $160 per month. There is no age-rating of premiums (you pay the same no matter how old you are) or denials based on medical history, what we call pre-existing conditions. Consumers may choose to pay more for services such as dental coverage, cosmetic surgery, or physical therapy.

Roger Van Boxtel, CEO of Menzel, one of the Netherlands' largest insurance companies, told the NewsHour,

There can be no discrimination if you're ill or old or young. We have to accept everybody. And I think that is one of the big differences with the United States. We have a level playing field, and we have to compete. We have to do our best to have good prevention programs, to innovate, and to buy health care with the providers, the GPs, the hospitals, the physical therapists. We make contracts with them every year, and we're seeking for the highest quality and the most efficient price.

Because everyone must have insurance and insurance companies must accept everyone, insurers are forced to compete on the quality of services they provide rather than on the cost of those services. In the Netherlands, if you don't like the quality of care you are receiving from your health insurer, you can switch to a different one. No insurer can turn you down for pre-existing conditions, so you are free to seek care from the insurer providing the highest quality (and at the same cost as your old plan!). To prevent a single health insurance company from getting overloaded with high risk patients, the Dutch government offers a "risk equalization fund." The fund reimburses companies taking on risky or costly patients, such as diabetics and cancer patients, reports the NewsHour.

According to the NewsHour, the Netherlands spends half as much money as we do on health care, and has a longer adult life expectancy and a lower infant mortality rate. As we illustrated earlier this week, the Netherlands ranked 8th overall in preventable deaths, while the U.S. was 19th (last place out of all wealthy industrialized countries). Dutch citizens are generally satisfied with their health care system and only spend seven percent of their income on health care.

Nor do they make the system work by skimping on necessary and effective care. Take the case of the Van Driel family, profiled by the NewsHour. When they began to suspect their son had autism, the Van Driel family moved from the U.S. to the Netherlands, Mr. Van Driel's native land. Thanks to their dual U.S.-Dutch citizenship, the Van Driels get coverage for their son's therapy, home visits, and even babysitters to help manage his condition. The Van Driel's feared the expensive therapy necessary to support their autistic son would bankrupt them if they remained in the United States. Mr. Van Driel told the NewsHour,

We didn't feel we had a choice. We felt we had our backs against the wall financially. We felt that we did have some money in savings, but not very much, and we felt that we were one treatment away from being bankrupt there.

The Netherlands laid the groundwork for a system that promotes choice and universal access, while the U.S. shows insight into quality integrated health care delivery systems, says Health Affairs. Though the health care system in the Netherlands is not perfect, it does demonstrate what health care coverage in the U.S. could be: affordable and sustainable for everyone, and built upon the values that Americans admire -- choice and competition.