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Netherlands' Health Care System Could Provide Model For US

Armen Hareyan's picture

The Netherlands last year enacted a health care system that uses"competition and a small dose of regulation to pursue what many in theU.S. hunger to achieve: health insurance for everyone, coupled with atighter lid on costs," the Wall Street Journal reports.

TheDutch system, which took effect on Jan. 1, 2006, requires that alladults purchase health insurance and that all insurers offer a policyto anyone who applies, regardless of age or health. Individuals whocannot afford health plan premiums receive subsidies financed by taxeson higher-income residents. The government compensates insurers forproviding coverage to high-risk patients by granting"risk-equalization" payments for companies that insure the elderly andindividuals with one of 30 diseases, including diabetes, heart diseaseand other ailments.

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The system "hinges on competition amonginsurers," who are "expected to cut premiums, persuade consumers tolive healthier lives and push hospitals to provide better andlower-cost care," the Journal reports. In addition, thesystem puts "the onus on consumers," which Dutch officials hope willallow more residents to "get the coverage they need," according to the Journal.

Toprotect physicians, who were concerned the system would allow insurersto influence medical decisions, the system prohibits patients frombearing a large financial penalty for using a physician not undercontract with their insurer, among other provisions. The governmentalso negotiated with generic drug manufacturers to lower prices byabout 40%. However, according to the Journal, the "realtest of the Dutch approach is yet to come: Can insurers push hospitalsto lower their costs and improve their quality?" Hans Hoogervorst, whowas the health minister from 2003 to early 2007, said, "There's still along way to go to increase competition among hospitals."

U.S. Prospects

According to the Journal,"[w]hat works in the Netherlands, a small country of 16.6 millionpeople, may not readily apply to America" because it "would likelyraise opposition among U.S. doctors and Republicans who are cautiousabout higher taxes." However, "many U.S. states are similar in size,and one, Massachusetts, is already experimenting with a universalcoverage scheme," the Journal notes. "The lesson for America is that this is what we ought to do," according to Alain Enthoven, a professor at Stanford University who 30 years ago published a proposal for "managed competition," a version of which became the Dutch system (Naik, Wall Street Journal, 9/6).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, afree service of The Henry J. Kaiser Family Foundation.