by Frank Thomas
Freedom of Choice, But Everyone's Covered.
Participation in the compulsory Dutch Basic health care plan is required by ALL residents. There is also optional additional health care insurance offered in the form of “upgrades.” Basic plan premium/deductible costs and benefit coverage are IDENTICAL for EVERYONE – regardless of age, health condition, location, background or income (except that premiums are reduced by ‘allowances” given to low-income people.
The annual premium is EUR 1,440 ( $1,585) for anyone 18 years or older or EUR 2,880 ($3,170) for 2 people with children under 18. Children up to 18 are co-insured with their parents; children under 18 must take out the Basic plan insurance. The individual deductible is EUR 385 ($425). But GP consultations, maternity care, medical devices, home care, and management of some chronic conditions are excluded from the deductible policy. By comparison the US Medicare premium is $1608. per year. If you're lucky enough to have an employer sponsored plan, the average premium cost per year is $4955. for a family.
For a family of 4, the Basic health plan cost is EUR 3,650 ($4,015) for premiums and deductibles, +-EUR 1,200 ($1,320) for dental for 2 adults and 2 children below 18. If a family of 4 purchased all the medical items in the upgrade groupings – which is highly UNLIKELY by most Dutch people – the added premium cost would be +-EUR 2,880 ($3,160) for 2 adults leading to a grand total cost of EUR 6,530 ($7,185). Most studies show that a U.S. family of 4 pays over $16,000 annually for health care insurance that does not have the comprehensive coverage the Dutch Basic plan has for EVERYONE.
The Basic health plan funding comes 50% from employers, 45% from the insured, and 5% from the government. Employers pay a % of their employee’s income amounting to 7.65% to the Tax Administration. The self-employed and pensioners pay an average of 5.4% of their income. This money goes into the Health Insurance Fund and is distributed to insurers for the purpose of “risk equalization.” All these figures are hardly a picture of runaway government health care spending in the Netherlands!
A married couple, or a person with a fiscal partner, with a combined annual income below EUR 28,000 ($31,000) is entitled to a health insurance “allowance.” Depending on income level, the “allowance” can cover up to 70% of the annual EUR 2,880 ($3,170) premium cost for 2 people. Health insurers receive nominal premiums (that vary less than 8% among the competing insurers) plus “risk adjusted contributions” from the Health Insurance Fund. An insurer receives a higher or lower contribution from the Fund depending on the health of its customers/policyholders.
The identical coding of medical treatments, products, and services throughout the system and country yields significant cost economies and improvements by comparing performances of service providers. So the cost of an appendix operation in the Netherlands will be pretty much the SAME anywhere in the country - unlike the U.S. where the cost of the SAME medical service varies sharply WIDELY within each state as well as among states.
The Way a Health Care "Market" Should Work
“Managed competition” is unique foundation basis of the Dutch Basic health care system. It means that consumers can choose from a market of health care insurers that compete predominantly on quality of services as well as operating efficiency. About 90% of all Dutch policyholders (+15 million people) are insured by 5 insurers (of which 3 are non-profit firms). Thus, there are around 3 million policyholders per insurer. This policyholder depth and broad variation combined with an identical Basic comprehensive benefits package for everyone - regardless of age, health condition, location, background, and income - results in a very well-balanced actuarial risk pool per insurer. Also, the development of a uniform treatment policy and excellent transparency of same facilitates competition, the comparison and critical assessment of worst and best practices by health providers.
Insurers are regulated by the government that has prime oversight responsibility. The government's role is not about directly managing the health care system but controlling its quality, accessibility, and affordability (costs and prices). It is in charge of the contents and size of the Basic health plan insurance package. The government is advised on these issues by the National Health Institute, an independent authority that has a major responsibility for the Basic plan package. An“insurance regulator” ensures that all Basic health plans have identical coverage so that NO ONE is disadvantaged by the choice of insurer. Insurers are not allowed to “risk-select” people for the universal Basic health plan package.
Based on advice from the National Health Institute, the government decides on which types of care are included in the Basic plan insurance package. At year-end, a new Basic health plan package is approved for coming year whereby benefits coverage, premiums and deductibles are IDENTICAL for ALL - whether one is a millionaire, a billionaire, or poor. Once a year, a person can change his or her health insurance provider for another, for the following year.
The Basic health plan package has a comprehensive structure. It covers the bulk of essential medical care services, medications, and medical aids, consistent with the state-of-the-art and medical practice. Here is a list medical services and treatments covered:
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consultations with GPs, specialists, obstetricians
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hospitalization, surgery and emergency treatment, medical tests (e.g., blood/urine/stool tests), X-rays, CT scans, echos, colonoscopies
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ambulance services and patient transport
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delivery and maternity care, full coverage of a home delivery and mid-wife services which are common ; a hospital delivery recommended by a GP or specialist requires a contribution to the costs which insurers offer additional insurance for
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medications, medicine prescriptions
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medical aids
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dental care up to 18
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basic mental health services including hospital care (mental health related) up to maximum of three years
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certain mental health care medications
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limited therapies for services provided by various types of therapists, e.g., physical therapists, remedial therapists, occupational therapists, speech therapists,
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nutritional and dietary care
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limited dental care for adults over 18, restricted to dental surgery, dental X-rays, and removable dentures
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emergency medical care abroad
Supplementary Insurance Covers Things Not Usually Covered by US Insurance Plans
On top of the statutory Basic health plan insurance for ALL, individuals can purchase supplementary insurance for medical care items that are not or only partly covered under the Basic health plan package. The supplementary insurance is offered by insurers in some form of 3 or 4-star “upgrade” groupings. Most people purchase some supplementary private health insurance from the same insurers who provide the statutory coverage. However, the supplementary insurance is voluntary; insurers are free to “risk-select” and even to refuse to insure certain people. Typical supplementary medical coverage items in the various “upgrade” groupings include:
- specific medications
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plastic or cosmetic surgery
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extra physiotherapy and exercise therapy
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bones/muscles/weight improvement programs
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dietary advice and preparations
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contraception
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alternative medicines
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alternative health therapies such as homeopathy, osteopathy, acupuncture, chiropractic care
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vaccinations
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glasses, contact lenses
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hearing aids
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dental
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emergency health care in travel abroad
To put the premium cost of supplementary upgrades in some perspective, if an individual purchased insurance coverage of ALL medical items in each upgrade grouping from an insurer – a highly unlikely event - the maximum added annual premium cost would be around EUR 1,440 ($1,585). This is the same cost as the Basic health plan premium cost for an individual. Most Dutch policyholders purchase some supplementary private health insurance along with the compulsory Basic health plan insurance.
Under the Exceptional Medical Expenses Act, a national government insurance scheme called AWBZ provides exceptional long-term medical care for the elderly, disabled, or the chronically ill. AMBZ insures a person against risks not covered by the Basic health plan insurance or supplementary insurance upgrades. AMBZ covers steep medical expenses simply not affordable such as long-term home care, or admittance to a nursing home or a home for the disabled. Everyone who resides in the Netherlands has a right to this coverage.
SUMMARY
Of course there are management problem-glitches and challenges here and there - especially emanating from the sharply rising elderly group and their considerable medical care needs over the coming years. This group is quite vulnerable to extensive and costly illnesses. The total cost of healthcare in the Netherlands is 11.5% of GDP versus 16.5% in the U.S.
For the Dutch, the task is formidable to keep it at that level in light of a growing aging society living longer, increasingly expensive technology, and drugs. That is why preventive care actions constantly promoting people to adopt healthy lifestyles of controlled stress, healthy diet and exercise regimens have long been of high priority in the Dutch health care system.
So far, the Dutch “Managed Competition” approach to health care is proving to be one of the best systems worldwide. Recently, the Legatum Institute, a highly reputable London-based research institute, ranked the Netherlands as having the world's 5th best health care system compared to U.S. ranking of 32. (see: “The 16 Countries With the World's Best Health Care Systems,” The Legatum Prosperity Index-2016, by Will Martin, Jan. 13, 2017).
Frank Thomas, The Netherlands, May 10, 2017
FOOTNOTE: Comparing Dutch Health Care System to U.S. System
I will follow above up with a short summary of how and why Obamacare has failed and why Trumpcare is also destined to fail. I will compare both to the Dutch health care system.
The U.S. has still not learned that it's financially impossible to have a sound, relatively simple, quality health care system for ALL when it is driven by age, health, income, location variations and a non-uniform medical coding and costing system that lacks transparency and uniformity within most states and among states. Practically every medical treatment and medication an individual undergoes in the states is about 2 to 8 times more costly than the same treatment in the Netherlands (and 3 times the same treatment in Canada). I will cover the key reasons WHY this is so.
We learn NOTHING from the more effective foreign health care systems that provide better and broader quality coverage for more than half the cost to an insured individual than occur in most of the states. Political ideological indoctrination is also a big contributor to the MESS we are in with our extremely costly health care system - namely the Republican pure conservative dogma of the anti-government social benefit tribe that the well-off should not be paying for the not-so-well-off.
This compares to an entirely different core value construct deeply enshrined in Europe where people in the main fundamentally believe "We are all in this life together," especially when it comes to such basic needs as quality healthcare for all. It's not so surprising that that simple pervasive core value and thinking leads to much lower cost and higher quality universal health care systems in Europe.
