Out-of-pocket payments in the Netherlands: expected effects are high, actual effects limited

Eurohealth SYSTEMS AND POLICIES Eurohealth incorporating Euro Observer — Vol.21 | No.2 | 2015 27 OUT-OF-POCKET PAYMENTS IN THE NETHERLANDS: EXPECTED EFFECTS ARE HIGH, ACTUAL EFFECTS LIMITED By: Margreet Reitsma-van Rooijen and Judith D. de Jong Summary: Out-of-pocket (OOP) payments are often introduced to reduce health care expenditures. The assumption is that OOP payments result in less health care use, therefore lower expenditure. However, the effects of OOP payments appear to be limited and they have adverse effects. Variants of OOP payments are being considered by several governments in order to address these problems; however, in the Netherlands the current OOP payment system has limited effect. This is possibly due to a lack of knowledge, the limited influence people have on their health care use, and the fact that people rarely judge this use as unnecessary. Keywords: Health Care Costs, Out-of-pocket Payments, Public Expectations, the Netherlands Margreet Reitsma-van Rooijen is a Researcher and Judith D. de Jong is Programme Coordinator, Health Care System and Governance at the Netherlands Institute for Health Services Research (NIVEL), Utrecht, the Netherlands. Email: pm.reitsma@gmail.com Growing health care expenditures; the problem and solutions In many countries health care expenditures are rising faster than resources. 1 There are different factors which play a role in this development, including technological progress, an ageing population, and consumer expectations. 2 If no action is taken to limit these expenditures, then by 2060, the combined public health and long-term care costs for OECD countries will more than double as a share of gross domestic product (GDP). 1 In addition, the current financial crisis that started in 2007, makes growing health care expenditures an even more urgent problem, 2 as it has a large impact on health systems. 3 In order to be able to provide high quality, accessible and affordable health care in the future, health care expenditure needs to be controlled. Therefore, different countries have implemented a wide range of policy tools to reduce these expenditures and to respond to the financial crisis. 3 Some policies are designed to affect the volume and quality of publicly financed health care – for example, by reducing the coverage of the insurance package. Other policies aim to cut the cost of publicly financed health care – for example by reducing overhead costs. 3 Policies have also been introduced that aim to raise the level of contributions for publicly financed health care, for example, by increasing or introducing out-of-pocket (OOP) payments. 3 In this article the focus is on OOP payments as a tool for reducing health care expenditures. Acknowledgements: The authors would like to thank the members of the Dutch Health Care Consumer Panel who participated in this study. Data collection of this study was funded by the Dutch Ministry of Health, Welfare and Sport. Eurohealth SYSTEMS AND POLICIES Eurohealth incorporating Euro Observer — Vol.21 | No.2 | 2015 28 OOP payments With OOP payments the insured have to pay the costs, in whole or part, of the health care they use. This is assumed to lead to a reduction of health care expenditures in two ways. First, OOP payments will lead to a so-called funding shift, 4 since people have to pay for their health care use themselves. Therefore, collective costs will decrease. Second, OOP payments are assumed to lead to a decrease of health care use and thus to a reduction of health care expenditures. 4 Many countries, such as Austria, Belgium, France, Germany, Luxembourg, the United States, Switzerland and the Netherlands, have some form of health insurance system. In such systems, health care users often do not face the whole costs of their health care use, since these are paid partly or entirely by their health insurance company, to which they pay a premium (or a ‘contribution’ based on their income). Therefore, the insured lack a direct association between health care use and costs. As a consequence, health care users may demand treatment inefficiently, in the sense that the costs exceed the benefits. This might lead to excessive use of health care, also known as moral hazard 5 – and, consequently, to growing health care expenditures. 4 OOP payments, however, might help reduce excessive use of health care. The assumption is that OOP payments lead to higher cost consciousness which is assumed to lead to cost conscious behaviour and thus to less health care use. This might reduce health care expenditures. Whether OOP payments lead to a decrease in health care use has been the subject of many studies in different countries. These show that the effects of OOP payments on health care use are limited. 4   6   7 This is the case for the current OOP payment, the compulsory deductible, in the Netherlands where health care consumers have to pay the first part of their health care use themselves before insurance coverage begins. The limited effect of this deductible might be due to the fact that this deductible has a maximum. If health care users reach the maximum (€375 in 2015), or know that they will reach the maximum, they will behave as fully insured, which will possibly lead to higher health care use. Besides these limited effects, there are indications that OOP payments disproportionately affect the lower income groups, 4 which leads to inequalities in health status between groups. 6 Variants of OOP payments Variants of OOP payments also have been considered by governments, including the Netherlands, in an attempt to address the question of their limited effects and to overcome the problem of creating inequalities between groups. 3 One of these variants is to increase the level of the compulsory deductible so that it takes longer before the maximum is reached. Therefore, a higher compulsory deductible will have a more prolonged limiting effect on health care use. A RAND-study, 4 which focused on younger people and on healthy populations, showed that the higher the OOP payment, the stronger the effect. However, increasing the level of the compulsory deductible will have a significant impact on people with a low income, leading to differences in the financial accessibility of health care. A compulsory deductible, which is income-dependent, is one option which could address this issue. If the compulsory deductible is income-dependent, it will be lower for people with a low income compared to people with a high income. The effect of the OOP payment on health care use will then be similar for all income groups. Another option is a shifted compulsory deductible. Here, the level of the compulsory deductible is the same for everybody, but it will only apply when the costs of health care use exceed a certain amount. This amount is not the same for everybody, but depends upon risk-characteristics of an individual, for example age, since older people have a higher risk that they need health care than younger people. The older people are, the higher the level of health care costs before the compulsory deductible will apply. A shifted compulsory deductible increases the chance of low OOP payments, which in turn, increases the incentive for adequate health care use, possibly leading to a larger behavioural effect, in particular for chronically ill and older people. However, for all these variants of the compulsory deductible, once the maximum has been reached there is no longer any limiting effect. A charge per service (a co-payment) will therefore probably have a stronger effect on reducing health care use. Public expectations of OOP payments in The Netherlands Public expectations about the effects of OOP payments shed light on the acceptance of such policy measures, 8 and therefore on its legitimacy. 9 Public acceptance is an important factor for their success 10 and legitimacy is a crucial basis for such measures. 9 Therefore, it is important to gain more insight into the expected effects of these variants of OOP payments on the people whom these measures affect. 10 In The Netherlands, public expectations of different variants of OOP payments were measured using a mixed-mode questionnaire dependent on the member’s preference. The questionnaire was sent out in November 2013 to 1,500 members of Table 1: Means (95% CI) for the degree to which participants agreed with the statements Public expectations* Cost consciousness Cost conscious behaviour Health care use Compulsory deductible 3.20 (3.11– 3.28) 3.40 (3.33 – 3.47) 3.76 (3.68 – 3.83) Shifted obliged deductible 3.01 (2.93 – 3.09) 3.08 (3.01– 3.15) 3.15 (3.07– 3.23) Income dependent deductible 2.99 (2.92 – 3.07) 3.03 (2.96 – 3.10) 2.95 (2.87– 3.02) Charge per service 2.97 (2.90 – 3.05) 3.20 (3.13 – 3.27) 3.19 (3.11– 3.27) Source: 11 * Scale running from 1 (completely disagree) to 5 (completely agree). Note: Number of respondents between 662 and 686. Eurohealth SYSTEMS AND POLICIES Eurohealth incorporating Euro Observer — Vol.21 | No.2 | 2015 29 the Dutch Health Care Consumer Panel, run by the Netherlands Institute for Health Services Research. 11 This sample was representative of the Dutch population aged eighteen years and older with regard to age and gender. The questionnaire was returned by 698 panel members (response 47%). Four different types of OOP payments were presented to the respondents: The compulsory deductible; a shifted compulsory deductible that is dependent on age; an income dependent deductible; and a charge per service. After a short introduction, we measured public expectations for each on a 5-point Likert scale (1 = completely disagree, 5 = completely agree) together with statements that measured cost consciousness, cost conscious behaviour and less health care use. The mean score for the statements that measured public expectations is almost 3 or higher (see Table 1), indicating that health care users expect all these variants of OOP payments to be effective. The behavioural effects of OOP payments In the Netherlands, there seems to be public acceptance for these forms of OOP payments as health care users expect all four variants to have some effect. Public expectations about the effects shed light on the acceptance of these OOP payments, and therefore on their legitimacy. Public acceptance is an important factor for their success 10 and legitimacy is a crucial basis for such measures. 9 However, this acknowledgment of effect may not result in an automatic effect on behaviour, as demonstrated by other evidence. For example, in a previous survey in October 2012, we asked 1,500 members from the Dutch Health Care Consumer Panel (845 respondents, response 56%) whether they had used less health care in 2012 due to the existing compulsory deductible. Only 9% of the respondents answered yes. 12 In addition, from other studies, we know that the behavioural effect of the compulsory deductible in the Netherlands is limited. 7 So, the effectiveness of the compulsory deductible is small, despite the expectations of the public (in our 2013 survey) that this will lead to less health care use. There are several possible explanations for the limited effect. These include: a lack of knowledge about the OOP payment; the lack of opportunities people have to influence their health care use; and that health care users rarely judge their health care use as unnecessary. Knowledge about the compulsory deductible seems to be limited. When asking the respondents how they actually made less use of health care due to the compulsory deductible, visiting the general practitioner (GP) less often was mentioned most frequently. 12 However, the compulsory deductible is not applicable to GP consultations. Health care users seem unaware of this. Based on another study among 1,559 members of the Dutch Health Care Consumer Panel in 2009 (1056 respondents, response 68%), we found that a quarter of the health care users thought that the compulsory deductible was applicable to GP consultations. 13 Thus, limited knowledge of the compulsory deductible might explain its limited effect on health consumption. Another prerequisite for a policy to work is that people should have the opportunity to exert influence on their behaviour. One might question whether people can influence their health care use. If people are ill, they often need health care. In the Netherlands, due to the gate keeper system, the first step is usually to visit the GP. People can decide whether or not to go to the GP, but in general the GP decides whether or not further steps, such as visiting a medical specialist are needed. The compulsory deductible applies to these other levels of health care. Therefore, this gate keeper system limits the influence individual health care users have on their health care use. Moreover, one could question whether health care users are able to decide whether or not their health care use is necessary. OOP payments have been introduced to reduce the use of unnecessary health care. Studies on the effects of OOP payments show that they also reduce the use of necessary health care. 4 If people decide not to make use of health care, whereas they should do so, this may result in even higher costs in the longer term. Results from a study among members of the Dutch Health Care Consumer Panel in 2011 14 showed that the majority of respondents judged their own health care use to be necessary. Only 4% of respondents indicated that they used health care when it was unnecessary. However, when asked if others made use of health care when it is unnecessary, 38% agreed or completely agreed. This might explain why public expectations of the effectiveness of OOP payments are high, while actual effects are limited. Conclusion Several countries increased or introduced OOP payments in response to the economic crisis, 3 although evidence of the actual effects are limited. It is questionable whether OOP payments are a valid means of limiting health care expenditures, particularly as the distribution of health care expenditures across the population is highly concentrated. Thus, a policy tool such as OOP payments, aimed at the 90% of the population that collectively accounts for less than one third of total health care expenditures, may have a limited effect on costs in the Netherlands as well as in other OECD countries. 2 It is also questionable to what extent people can influence their health care use, and to what extent they are able to make good decisions on whether or not to make use of health care. Yet, policy-makers still see OOP payments as a possible solution to reduce health care expenditures. Other solutions, however, might be more effective in reducing health care costs. These costs are more influenced by the way in which health care is provided rather than by the extent to which use is initiated by patients. 2 References 1 OECD. What future for health spending? OECD Economics Department Policy Notes, June 2013. 2 Thomson S, Foubister T, Figueras J, et al. Addressing financial sustainability in health systems. Copenhagen: World Health Organization, 2009. 3 Mladovsky P, Srivastava D, Cylus J, et al. Health policy responses to the financial crisis in Europe. Policy Summary 5. Copenhagen: World Health Organization, 2012. 4 Robinson R. User charges for health care. In: Mossialos E, Dixon A, Figueras J, et al. (eds.) Funding health care: options for Europe. Buckingham, United Kingdom: Open University Press, 2002:161 – 83. 5 Ma C, Riordan M. 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Legitimiteit van sociaal beleid: maatschappelijke ontwikkelingen en bestuurlijke dilemma’s [Legitimacy of social policy: social trends and managerial dilemmas]. Beleid & maatschappij 2013;40(1):26 – 49. 10 Rooijers T. Maatschappelijke acceptatie van mobiliteitsbeleid [Social acceptance of mobility policy.]. In: Blok P (ed.) Colloquium vervoersplanologisch speurwerk – 1992 Innovatie in Verkeer en Vervoer. Delft: C.V.S., 1992. 11 Brabers A, Van Dijk M, Reitsma-van Rooijen M, et al. Consumentenpanel Gezondheidszorg: basisrapport met informatie over het panel (2014) [Health Care Consumer Panel: basic report with information about the panel (2014)]. Utrecht: NIVEL, 2014. 12 Reitsma-van Rooijen MB, Jong, JD de. Veel zorggebruikers verwachten belemmeringen voor noodzakelijk zorggebruik bij een verplicht eigen risico van 350 euro [Many health care users expect barriers to use necesarry health care if the compulsory deductible is 350 euros]. Utrecht: NIVEL, 2012. 13 Maat M, De Jong J. Eigen risico in de zorgverzekering: het verzekerdenperspectief. Een onderzoek op basis van het ConsumentenPanel Gezondheidszorg [Deductibles in health insurance: the perspective of insured. A study based on the Health Care Consumer Panel]. Utrecht: NIVEL, 2010. 14 Reitsma-van Rooijen M, Brabers A, Masman W, et al. De kostenbewuste burger [The cost consciousness health care user]. Utrecht: NIVEL. ACCESS TO LONG- TERM CARE SERVICES IN SPAIN REMAINS INEQUITABLE By: Pilar García-Gómez, Cristina Hernández-Quevedo, Dolores Jiménez- Rubio and Juan Oliva-Moreno Summary: Population ageing poses challenges not only for access to health care systems but also to long-term care (LTC) services. Spain’s Dependency Act (2006) provides universal access to LTC for those with certain levels of dependency. However, evidence suggests horizontal inequity favouring the well-off, especially for those with severe needs. These findings are particularly relevant for countries which, like Spain, have not yet fully developed national LTC services. Investing now in health policy efforts to improve longer life expectancy in good health appears to be the best way forward but requires complex coordination between social and health services. Keywords: Disability, Dependency, Long-term Care, Unmet Need, Equity, Spain Pilar García-Gómez is Associate Professor at Erasmus School of Economics, Erasmus University Rotterdam, the Netherlands; Cristina Hernández-Quevedo is Research Fellow at the European Observatory on Health Systems and Policies, The London School of Economics and Political Science, United Kingdom; Dolores Jiménez- Rubio is Associate Professor at the Department of Applied Economics, University of Granada, Spain; and Juan Oliva-Moreno is Associate Professor at the University of Castilla La Mancha, Spain. Email: C.Hernandez-Quevedo@lse.ac.uk Introduction European countries present large differences in the way long-term care (LTC) is organised, as well as in spending: while half of the EU-27 countries spent less than 1% of their Gross Domestic Product (GDP) on LTC in 2010, Nordic countries and the Netherlands spent more than a 3% in that year. 1 These figures probably will increase sharply in the next decades (see Figure 1). Although the baseline is very different between countries and there is a degree of uncertainty in the way the health status of their populations will evolve in the near future, ageing of the population will not only challenge the organisation of health care systems but will also imply a redefinition of LTC systems in the years to come. LTC expenditures will be affected not only by the percentage of the population over 65 years and their relative health, but also by the institutional characteristics of the LTC system, including its organisation, the trade-off between formal and informal care and the availability of support for the latter type of care. In this context, Spain is not an exception, with 3.85 million people living in households reporting a disability or limitation, which implies a rate of 85.5 per 1000 inhabitants. 2 Moreover, the egalitarian objective defined as “equal access for equal need” for basic services is part of the policy agenda for most European countries. This implies that, for the same level of need, there should not be differences in the access to health care services by socioeconomic conditions, race or sex. The World Health