The role of private health insurance differs significantly from one country to another. A key reason for this relates to the availability and the delivery of public healthcare within each country. In addition, governments often dictate the role of private health insurance within any particular country. The second article in this eight-part series focuses on underwriting in the Netherlands.
Health insurance market summary
The Dutch healthcare financing system was reformed in 2006. The health insurance system consists of two insurance schemes: the Mandatory Private Health Insurance (MPHI) and Exceptional Medical Care Social Health Insurance. In addition, the Voluntary Private Health Insurance (VPHI) supplements the coverage of MPHI. For the Exceptional Medical Care Social Health Insurance, the insurers do not bear financial risk, whereas for the MPHI and VPHI the insurers do.
Mandatory Private Health Insurance (MPHI) is the foundation of the Dutch healthcare financing system. It covers basic short-term health services delivered by general practitioners (GPs), specialists, and hospitals. The government determines which medical care is covered in the MPHI. All health insurers must offer the same basic package of essential medical care. The Dutch population is obliged by law to purchase MPHI from one of the approved private insurance companies, but the Dutch population has free choice of insurer. There’s an open enrollment system (i.e., insurers cannot turn people down). As underwriting or risk selection is not allowed, insurers get compensated through a national risk-equalisation system to cover the predictably high medical expenses of certain members.
Exceptional Medical Care Social Health Insurance is intended to provide the insured with chronic and continuous care that involves considerable financial consequences, such as care for disabled people with congenital physical or mental disorders. It covers selected preventive care, high-risk prenatal services, and long-term healthcare, such as personal care, nursing care, and stays in medical facilities exceeding 365 days. It is a national insurance and it is executed by health insurers through care administration offices. The national government takes risk for all payments to healthcare providers. The premium is collected through a tax on wages.
We’ve previously provided a view of healthcare in the Netherlands. Now here’s another new development—the possibility of a unique approach to home healthcare called SOS Doctors, modeled after a similar program in France. Roeleke Uildriks and Ji Kwen Ng offer perspective:
Q: You briefed us before about the recently revised Dutch healthcare system. Lately, you’ve been working on a new care provider proposal that would create added value to the system. Tell us about it.
Uildriks: The concept is called SOS Doctors, and it is borrowed from a successful program in France, SOS Médecins. Arnold Verhoeven, a Dutch citizen who now lives in France, learned that there, one can call for a doctor to visit at home, anytime, 24/7. He wants to improve the quality of care here, and he is convinced this would be an important improvement. We were asked to analyze the financial impact an initiative like this would have on healthcare costs, and present it to government and physician representatives.
Q: How do the government and the healthcare system in the Netherlands view this idea?
Uildriks: They are concerned a service like this will raise healthcare costs, because people will be calling all the time. And, of course, utilization will increase.
Ng: Physicians are worried, too. The National Association of General Practitioners (GPs) is worried about the quality of care, because they claim that the SOS Doctor will not have a personal relationship with the patient or have access to the patient’s record. Of course, when a person goes to the emergency room the specialist does not know the patient or have the patient’s records, either.
The head of the White House Office of Healthcare Reform stoked some controversy this week by suggesting that a Medicare-like model is not the only way to go when it comes to a public healthcare option:
There are different breeds of public plans that could be part of this.”
The response from many organizations has been negative. Still, there are certainly other models. Before the Medicare-like public plan idea gained steam, an FEHBP-type plan was often mentioned. Then there is the Healthy American Act.
Not to mention ideas from overseas. The Dutch system has drawn a lot of attention; see the interview below for more information on that.
A wholesale change seems less likely than something incremental, but perhaps there are things to learn from other countries. Either way, it is simply too early to handicap this race.
For profit, for everyone: Exploring the Dutch healthcare system
The Dutch healthcare system is the world’s only private system of basic healthcare insurance operated by insurance companies for profit. We asked Dutch healthcare actuaries Roeleke Uildriks and Ji Kwen Ng to explain.