Feature

Through the mill of Dutch health care reform

Dutch Labour party minister Hans Simons has left office, apparently defeated in his attempt to introduce ‘managed competition’. Now health care in the Netherlands faces an uncertain future. Marja Gastelaars reports

fter nearly four years in office, the Dutch public health minister, Hans Simons, has decided to return to the city government of Rotterdam. This decision marks the end of his ambitious attempt to regulate the health care system, the so-called Simons Plan.

Mr Simons was a social democrat in a coalition cabinet of social democrats and Christian democrats, traditionally the effective political machinery behind the Dutch social state. But the presence of social democrats in government only seems to help to delegitimate accepted social security and to enforce cost control.

Health has become a central value in our lives. Medical services are considered indispensable: according to the Dutch constitution every citizen has a right to good and properly available health care.

But in the view of some commentators this trend is leading us toward a ‘Mercedes culture’, in which each citizen is granted not only the necessary health care provision, but the maximum of all possible provision at all times. And the fact is that few citizens are aware of the cost.

In the Netherlands, as elsewhere, we express the costs of health care provision in terms of national aggregates like the percentage of government budget or, more realistically, of GNP — the Netherlands with its 9 per cent still well below the US rate of 15 per cent. But we do not know how these costs relate to everyday health consumption. We do not know the price of our Mercedes car, let alone how the machinery works.

The Simons plan, introduced in March 1990, aimed at a general basic insurance system into which every citizen was to be accepted on the same terms.

The premiums were to be partially dependent on individual income level, and partially ‘nominal’, ie at the same level for each participant; the division of the total amount of premiums along these parameters would be a public decision.

The cover of this basic insurance was to apply to 85 per cent of existing health services, but this issue would also be subject to the public decision-making process.

Another very important characteristic of the Simons plan was the introduction of the principle of managed competition. The basic insurance would be a collective enterprise, yet undertaken by private insurers. The existing collective insurance — sick funds — for people below a certain income level were to be transformed into commercial private insurers, whereas existing private insurers would have to operate under a ‘collective’ regime.

The insurers were supposed to apply the principle of free competition: the clients/ patients were to have a free choice of prospective insurers and the insurers in turn were to have a free choice of the health care providers they were to deal with. Providers were to compete for best value at the lowest possible price.

The plan was intended to allow for a certain withdrawal of government, yet under the plan it would still regulate quite a lot: the basic package, premiums and payments, the acceptance rules and, last but not least, the assurance of acceptable standards of quality and distribution of health care supplies.

The best way to judge these proposals is to put them into the perspective of past developments in public health care in the Netherlands.

Post-war, the health care system could be described as a professional corporatism. Whereas the Beveridge Report was taken by the Dutch government as a model for its new social security arrangements, the national health service was left out.

From 1941 onwards there had been basic insurance — consisting of government-regulated sick funds — for people below a certain income level; those above this level were privately insured. Coverage was deliberately kept low, in line with the restrictive income policies adopted by the post-war Dutch government. But apart from these financial restrictions, decisionmaking about health care provision was entirely left up to ‘the field’. It worked as a system of government guarantees in which patients were guaranteed treatments; health care providers were publicly recognised and their output assured.

This system was pushed to its limit by the rapid economic growth of the 1960s and early 1970s. The public health care system itself grew by almost 25 per cent a year. This growth became regionally unbalanced. To redress inequalities and to get a hold on cost development, in 1974 the government announced a public planning regime for the health care system, not unlike the NHS. But these attempts at public regulation failed. Apart from that, the government introduced some financial planning instruments, such as centralised tariff laws and a budgeting system. These eventually succeeded.

At the beginning of the 1980s the Netherlands government decided, like many other Western European governments, to introduce more market mechanisms into healthcare.

The committee installed to communicate this revolutionary message was chaired by a top manager, Dr Wisse Dekker. Its 1987 report effectively sent two new parties into the field.

The Dutch patient movement, which had been flourishing, was acknowledged as a partner in the negotiations to come. But more importantly, private insurers were granted the leading role, although the Dekker committee reasoned that a general insurance under government regulation covering ‘basic’ health care, would eventually turn out to be cheaper than a free market insurance system: managed competition was the result.

Initially, the Dekker Report met with almost universal political acclaim. The new under secretary, Mr Simons, accordingly followed the general drift of its proposals. But in implementation, this initial momentum was quickly and fatally slowed down. Anticipatory changes were made by the main players.

For instance, although some of the financially stronger parties maintained their struggle for control, they also underwent some accommodating changes. The medical specialists are a case in point. On the one hand we have a proper tariff war going on, with specialists on strike, demonstrating on nation-wide TV programmes the poor patients they cannot help. But on the other, their professional organisations are in a process of reconstruction that may end with every specialism negotiating separately with the financial powers to be.

Another important change is the combination of existing budgeting practices with a compulsory system of quality control for health care institutions, introduced by Simons. The actions of health care practitioners are to be standardised and their institutions certified. The well-organised specialists have countered this strategy as well, for example by ‘inventing’ new, accountable ‘activities’. But in the future health practitioners are to be held wholly accountable.

Moreover, their public accountability has been enhanced by a specific programme, Keuzen in de zorg (options in health care), initiated by Simons himself, intended to stimulate a public debate on medical, ethical and financial choices. And, although this programme often only seems to have publicised the permanent coffee table-debates on health practitioners and their actions, it may also have generated some public involvement in the choices to be made.

The most important changes have been the anticipatory changes in the insurance world. A very visible effect of Simons’ plan has been competition among insurance companies, including former sick funds going commercial. They are competing for the ‘better part’ of the clientele - young and still healthy and presumably critical of services rendered. Less visible, but equally impressive is the merger movement in the insurance world.

But health care institutions like hospitals are merging and so are primary care institutions. Although European law does not allow for this type of spoil trade, the market parties — hospitals, health care practitioners and insurance companies — are being united in a nationwide cartelization and regionalization process. These cartels are not unlike the system of ‘regional health alliances’ in Clinton’s proposed American Health Security Act (although in the US the private insurers and their health care allies associate with private companies as well).

So, in spite of his apparent defeat, Simons’ policies have had quite a few — intended and unintended — consequences. Healthcare is being restructured in terms of a new, financial corporatism under government control.

But it can be argued that the accountability of health care practitioners has increased. So has the awareness of the general public. Whether this enhances or diminishes the popularity of the Mercedes is yet to be seen, but in the end we may want to buy a different car altogether.