What is the cost of going Dutch?


Dutch people are happy with their healthcare system but it is starting to look expensive to run, writes RONAN McGREEVY

DURING THE general election campaign Fine Gael put the Dutch model of healthcare at the forefront of its vision for a one-tier health system.

The model, which the party believes has the benefits of being both fair and efficient, is known as a “managed competition” system.

It involves a number of private insurers competing on price to provide healthcare services in not-for-profit primary care and hospital services with the whole system tightly regulated by the Dutch government.

It was introduced in 2006 and is admired by many international observers. It offers a single-tier system and a high quality of healthcare. Everybody is required to buy health insurance, but nobody can be refused basic cover.

Moreover, satisfaction levels in general and for those who use the service are enviable by Irish standards. More than 90 per cent of Dutch people repeatedly say they are happy with it.

The system is not without its flaws, however, and there has been a steady and inexorable rise in costs, which has started to alarm the Dutch government.

The centre-right government is desperately trying to keep the lid on costs, which rose by 7 per cent above the rate of inflation last year and 5 per cent the year before that.

Dutch health minister Edith Schippers warned last week that the health ministry budget would rise “considerably” this year and election pledges to employ 12,000 new staff would not be met by 2015.

The Dutch government is looking to abandon the system whereby the government determines the cost of treatment and provide competition by allowing hospitals to set their own fees.

Last week, she announced that hospitals can set their own fees for 70 per cent of treatments.

Hospitals will also receive a maximum amount for certain treatments irrespective of the time spent by patients in their care.

The health ministry is now looking at a macro budget that will limit the amount of money a hospital can spend to a rise of 2.5 per cent per year.

Schippers is hopeful that competition between hospitals will drive down costs.

Under the current system, the Dutch government operates a safety net to aid insurers that get into financial trouble, but it is looking to end that arrangement. In essence, it is hopeful that the health insurers will act in the best interests of their clients by looking for the most cost-efficient care.

However, the health insurance companies are concerned that such a move could leave them facing heavy losses.

Prof Gert Westert, who is one of Holland’s leading health analysts, says the flaw in the Dutch health model is that hospitals earn more money by doing more procedures.

This has resulted in an increase in the number of procedures, such as a 25 per cent rise in the number of cataract operations being performed since 2006, a rise that cannot be justified clinically.

Westert says the original intention was to allow the “invisible hand of the market” to determine supply and demand, but the Dutch government is looking to intervene now because of the recent spike in costs.

“The assumption behind the model is that the market will do the work, but that has not been happening,” he says.

“The government is somehow in doubt if the experiment started in 2006 will bring the right results, which are a reduction in costs, an improvement in quality and more patient centredness.”

Last month, marathon negotiations between doctors and the Dutch government concluded with a cap on what medical professionals can earn to ensure that clinical decisions are made on the basis of need and not potential financial reward.

All of this will be of great interest to the new Government here, which has pledged to introduce universal health insurance (UHI) here by 2016.

Both Fine Gael and Labour put forward broadly similar models in their manifestos, though Fine Gael put the emphasis on competition between insurance companies in the sector, which would drive down prices. Labour wants to ensure that whatever the outcome, the principal of social solidarity remains.

There is no mention of the Dutch system in the programme for government, but it would appear that the system of compulsory social insurance involving competing insurers which is envisaged is very similar to the Dutch model.

However, there will still be a State option in the VHI, which will be retained, and the State will pay for those who are unable to afford private health insurance.

There are also significant differences from the Dutch model with insurers being forbidden to compete on services (all will have to offer the same) and neither will any be able to promise that their customer will be able to jump the queue.

With the continuing economic crisis taking up much of the Government’s time, the provision of UHI will take at least five years to implement.

So the Government will have plenty of time to learn from the Dutch model – for better or worse.


of Dutch people repeatedly say they are happy with their healthcare system

Costs of the Dutch healthcare system rose by


above the rate of inflation last year and


in the year preceding that