1HiT summary: Netherlands, 2005 HiT summary Fig. 1. Total health care expenditure as % of GDP, comparing the Netherlands, selected countries and EU average, 2002 Source: WHO Regional Office for Europe health for all database, January 2005. Health Care Systems in Transition European Observatory on Health Systems and Policies WHO Regional Office for Europe Scherfigsvej 8 DK-2100 Copenhagen Denmark Telephone: +45 39 17 17 17 Fax: +45 39 17 18 18 E-mail: info@obs.euro.who.int www.observatory.dk European Observatory on Health Systems and Policies Belgium France Germany Netherlands EU average Netherlands 0 4 8 12 Introduction Government and recent political history The formal head of the Kingdom of the Netherlands is the King or Queen (since 1980 Queen Beatrix Wilhelmina Armgard), but only the government holds executive power. The parliament, with a bicameral system in place since 1815, represents the population. Its two chambers have the power to legislate. As no political party has a majority, a coalition of several parties is necessary to form a Cabinet. Until 2002, the coalition was led by the Social Democrats, since then by the Christian Democrats. Population In 2004 the Netherlands had a population of 16.3 million. It is densely populated; with more than 450 inhabitants per km2. Native Dutch (both parents born in the Netherlands) make up 81% of the population. There is a mix of religions including Roman Catholic (31%), Dutch reformed (14%), Calvinist (8%), Muslim (5.5%), Hindu (0.6%) and others (1.9%) while 40% of the population is unaffiliated. Average life expectancy and perinatal/infant mortality Life expectancy for men is 76.0 years which is slightly higher than the average for the 15 Member States of the European Union before 1 May 2004. However, the average for women, at 80.7 years, has dropped below the same EU average. Although mortality rates are still quite low, perinatal and infant mortality is stagnating compared to this average. Leading causes of death The major cause of death (2003) is cardiovascular disease, followed by cancer. 2HiT summary: Netherlands, 2005 Historical background of the health care system In many respects the Dutch health care system is different from those of many other European countries. Health care in the Netherlands originated largely through the efforts of voluntary organizations, which is why almost all hospitals are private, non-profit establishments. Another important feature of the system is its long history of consensual processes of consultation and policy debate. The health care system consists of three parallel compartments of insurance, each under different regulatory regimes. The compartment providing universal coverage is the oldest insurance system in the world, and explicitly covers many of the risks associated with long- term care. Reform trends The health care system is characterized by continuous debate and discussion about its structure and reform. Health insurance has moved back and forth between efforts to unite the different co-existing systems into one and those to retain the existing systems, and although advanced plans for a united “basic” insurance are much discussed, the future is still unclear. Most reform decisions have focused on moves to increase competitiveness, and have highlighted difficulties in introducing effective market competition while maintaining solidarity and financial accessibility. Health expenditure Health care expenditure, in US $ purchasing power parity, has tripled since 1980. In 2002, it represented 9.1% of GDP, close to the average of the EU Member States before 1 May 2004. The public share of total expenditure has dropped to about 63% in recent years, from around 70% in the 1980s and early 1990s, a relatively low value in Europe. Overview The Dutch health care system with its three compartments of insurance (see below) is not only complex to describe, but is also constantly under debate and discussion concerning the possible integration or separation of its different parts. The second compartment, separated into compulsory insurance for those below a certain income and quite a large segment for private insurance, has noticeable repercussions on the funding side with regard to equity. This has been the impetus for various reform initiatives over the last 15 years that are still under debate. Despite discussions on the future structure of the system, the Dutch are in the top group (6th) of the EU Member States before 1 May 2004 with regard to population satisfaction, with 73.2% saying in 1999 that they were very satisfied or fairly satisfied with their health care system, owing in large part to its strong, well-developed system of primary health care. Organizational structure and management As noted above, there are three different compartments of health insurance, governed by different bodies: • a national health insurance for “exceptional medical expenses”; • compulsory sickness funds for persons with less than a certain income, and private, mostly voluntary health insurance; • voluntary supplementary health insurance. Government The Ministry of Health, Welfare and Sport defines policies to ensure the well-being of the population. With this aim, it established the social health insurance schemes under the Exceptional 3HiT summary: Netherlands, 2005 Medicines Act (AWBZ) and the Sickness Funds Act (ZFW). The Ministry and local authorities are jointly responsible for public health care, while the former, together with the Ministry of Interior and Kingdom Relations, is charged with integrated public safety policy. The country’s three inspectorates monitor and enhance the quality of health care and the well-being of the population. Of these, the Health Care Inspectorate, a body with autonomous status which supervises the quality and accessibility of health care, is the most important. The Ministry of Social Affairs and Employ- ment collaborates with the Ministry of Health, Welfare and Sport in areas of mutual interest and is responsible for employment and an active social security policy. It covers health-related social security schemes. The Ministry of Finance, together with the Ministry of Health, Welfare and Sport, is responsible for supervising the standard policy scheme which is implemented by private health insurers. Third party payers, associations and supervising organizations In 2004, there were 22 sickness funds, under the control of the Health Care Insurance Board (CVZ), which manages the day-to- day implementation of the AWBZ and ZFW regulations including the central funds of the two systems. The CVZ comprises nine independent members appointed by the Minister of Health, Welfare and Sport to whom it is also accountable. It is also charged with ensuring that sickness funds function appropriately and advising the government on health insurance matters. The Supervisory Board for Health Care Insurance supervises individual executive agencies and the overall implementation of the ZFW and the AWBZ. Advisory and administrative bodies The Health Council is a statutory body of 160 independent members advising the government on the scientific state of the art in medicine, health care, public health and environmental protection. The Council for Public Health and Health Care is an independent government body of nine members appointed by Her Majesty the Queen to provide strategic advice on health care and welfare policy issues. The Board for Health Care Tariffs is an independent government body which determines policy guidelines, sets the framework for tariff negotiations, approves/sets all maximum tariffs, performs reviews and identifies developments with regard to the implementation of the Health Care Tariffs Act. The Medicines Evaluation Board is responsible for regulating pharmaceuticals, although EU rules are changing this responsibility slightly. The Netherlands Board for Hospital Facilities advises on hospital planning policy and infrastructure developments. Finally, the National Institute for Public Health and the Environment is involved in the collection of basic data on health and development, clinical testing and assessment of vaccines. Other actors In addition, many private organizations are important, such as the Royal Dutch Medical Association, which represents doctors; the Dutch Federation of Patients and Consumers, which represents patient and consumer organizations and distributes information on health issues to the public; and the Dutch Institute for Health Care Improvement, which consists of four customer groups focusing on quality assurance and the improvement of patient care. 4HiT summary: Netherlands, 2005 Planning and regulation The government regulates the building of hospitals and health care institutions through the Hospital Facilities Act of 1971. However, because the hospital planning process was criticized for its complexity and lack of flexibility, a new act, the Act on Specific Medical Services, was passed in 2000 to guarantee a more flexible, effective approach. Most institutions that provide services under the AWBZ or the ZFW must be approved by the Minister of Health, Welfare and Sport. Physicians and nurses are regulated by the government, and a new system for enhancing professional standards and quality control was introduced in 2001. It is mandatory for the sickness funds to contract with all accredited institutions, although they do not need to contract with all individual providers. Accreditation operates through consultation between representative organizations of health insurers and providers, and then has to be approved by the CVZ. Under both the AWBZ and the ZFW, appeals can be made against decisions taken by a sickness fund. The most important types of complaint are disputes concerning entitlement to benefits. Before considering an objection, a sickness fund or relevant AWBZ body must seek the advice of the CVZ. The supervision of private medical insurance is entrusted to the Pensions and Insurance Supervisory Authority, a body established under the 1993 Insurance Business Supervision Act. However, this does not extend to application of the standard policy scheme under the Health Insurance Access Act. There has been a shift in the Netherlands from government to the private sector (delegation or functional decentralization), as well as a transfer of competencies from central to provincial/ local governments (devolution or territorial decentralization), which can be illustrated by the increased influence of provincial/local and governments in planning. Health care financing and expenditure Health care financing Medical care is largely funded (88%) through a system of public and private insurance schemes. First compartment: AWBZ The first compartment includes the exceptional medical expenses associated with long-term care or high-cost treatment, covered under the AWBZ. With very few exceptions, everyone living in the Netherlands is covered by this Act, which is responsible for around 40% of health expenditure. The cost of insurance is covered by percentage contributions and government funds. Employed persons pay payroll-deducted contributions, while people liable to tax/social security contributions are issued with an assessment for percentage contributions. No contributions are paid by those people without taxable income. The second compartment: the ZFW, the Health Insurance Access Act, and others The second compartment comprises normal medical care and costs of this care are covered largely by sickness fund insurance, private medical insurance, or a health insurance scheme for public servants. These three components comprise about 50% of health expenditure. Normal medical expenses are covered by a variety of insurance arrangements, and the most important of these is the one governed by the ZFW, which covers 63% of the population. Anyone whose salary is below a ceiling of €32 600 (in 2004), and all social security recipients, are insured under the ZFW. Residents of the Netherlands who meet the criteria set by the ZFW are automatically insured and must pay statutory contributions, whether or not they want to make use of the benefits. However, to obtain benefits they must register with a sickness fund. Coverage is usually extended to partners and children. 5HiT summary: Netherlands, 2005 Revenue to operate the ZFW comes from employer/employee contributions (both per- centage and flat-rate), a government grant (24% of expenditure), and a private sector contribution, which are all (with the exception of the flat-rate contribution) channelled through a central fund managed by the CVZ. Private health insurance (covering 30% of the population) falls into two categories; the standard policy provided under the Health Insurance Access Act, and other forms of policies. Standard policies are funded from the premiums paid by policy-holders and the apportionment charges under the Health Insurance Access Act. No one is obliged to take out the standard policy, but all insurance companies are required to offer it, and people meeting the statutory criteria may apply. Standard policies do not cover spouses or dependants. Other sources of funding In addition to the three major funding sources, the main complementary sources of health care financing are taxes, out-of-pocket payments and voluntary supplementary health insurance. Taxes cover 5.6% and out-of-pocket payments cover approximately 5.8% of health care expenditure. Supplementary insurance (the third compartment) comprises 3% of health expenditure (2002), and includes care which is less necessary, such as dental care, prostheses, hearing aids, etc. The content, scope, conditions and premiums of supplementary insurance are fixed by the insurers. Health care expenditure Health care expenditure in US $ purchasing power parity has tripled since 1980. In 2002, it represented 9.1 % of GDP (around the average of the EU Member States before 1 May 2004), with about 63% public sector spending (2001). Health care delivery system Public health services Public health is organized through municipal or district services, with supervision and monitoring at regional and national level by the Health Care Inspectorate. Strengthening preventive policies has been the leading theme of the public health services. Emphasis is placed on reducing socioeconomic differences (the most widespread problem) and in trying to reduce morbidity in the elderly. Primary health care Primary health care is well developed and is provided mainly by family physicians (GPs), who are the gatekeepers and dominant figures in the system. Each patient is supposed to be on a GP’s patient list and must be referred to specialist physicians or the hospital by the GP. The impact of gatekeeping is illustrated by the low referral rate, as the majority of medical problems are treated by GPs (primary care constitutes two thirds of all ambulatory care contacts). GPs spend a great deal of time talking with patients, and communication skills are an integral part of medical training. This helps to explain the very low prescription rate, with prescriptions given in about 66% of cases, compared to 75–95% in other European countries. Family physicians maintain independent and largely individual practices in each community. Secondary and tertiary care Secondary and tertiary care is mainly provided by medical specialists in hospitals with both outpatient and inpatient facilities. More than 90% of the hospitals are private, non-profit facilities; public university hospitals make up the balance. 6HiT summary: Netherlands, 2005 Hospitals are classified as teaching (8), general (100) and specialist (28). Through mergers or expansion, hospitals have increased their capacity despite the requirement to decrease the number of beds in each region. The number of acute care beds has been reduced by over a third since 1980, to 3.1 beds per 1000 population, a value well below the EU average. Hospital management has changed, giving middle managers/administrators greater control. In addition, almost all large and academic hospitals have introduced some form of decentralization and participation of medical specialists in management. Transmural care (bridging the organizational and financial gap between ambulatory and institutional care) was introduced in the early 1990s and has been growing ever since. However, the inflexibility of the financial structure of the Dutch health care system is considered a major barrier to implementation. In 2001 a government committee was established to stimulate and coordinate research in transmural care. Social care The most important social services consist of nursing homes and homes for the elderly. The Netherlands has the highest rate of residential care for the elderly in Europe. The AWBZ finances residential homes, and residents only pay a small, income-related share of the costs. Each resident has a GP, who is responsible for medical care. Social care includes such innovations such as care subscription (healthy elderly living independently and subscribing to a residential home in case of emergency). It is expected that the costs of care for the elderly financed by social insurance and taxation will increase, but that the costs borne by the elderly themselves will grow at an even higher rate. Fig. 2. Hospital beds in acute hospitals per 1000 population, the Netherlands, selected countries and EU average, 1990–2003 Source: WHO Regional Office for Europe health for all database, January 2005. 2 3 4 5 6 7 8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Belgium France Germany Netherlands EU average 7HiT summary: Netherlands, 2005 There is a broad range of mental health care services, from outpatient clinics to housing units for long-term residents, and from psychiatric departments for the elderly to therapeutic communities. The 66 psychiatric departments of general hospitals and university hospitals are not very large, and the average length of stay is also relatively short, as is the case in hospitals in general. Human resources and training Although complete data on human resources are not available, various sources indicate that the number of physicians is about 10% lower than the average for the EU Member States before 1 May 2004, dentists are 30% fewer, while the number of nurses is considerably above the average for the EU Member States before 1 May 2004. The Professions in Individual Health Care Act, which regulates medical practice, has changed legislation and regulation in health care. The Act replaces a previous system of prohibited actions by a system of “reserved actions” or medical acts which may only be performed by medical doctors or specified groups, such as nurses, dentists and midwives. It also provides legal recognition and protection of eligible specialist titles. The Royal Dutch Medical Association recognizes and registers GPs. GP training is provided by GP instructors in cooperation with universities. A GP and Nursing Home Physicians Council determines the demands to be met, while the GP Registration Committee supervises implementation of decisions and registers recognized GPs. GP training is being extended from two to three years, and there is a waiting list of 2.5–4 years. To secure a contract with the Dutch sickness funds, registration in a GP register is compulsory. As with specialists, a GP may be removed from the register if he/she has not practised as a GP on a regular basis in the previous five years. Pharmaceuticals The Dutch pharmaceutical policy has three objectives: • good quality, preparation, distribution and supply • cost control • responsible use. There are tight regulations on pharmaceuticals, and the Health Care Inspectorate is responsible for overseeing these. The Netherlands has both national and European licensing procedures in place. Once a drug is licensed, the government determines whether it should be reimbursed or not through therapeutic and cost comparison with a comparable product already in the benefit package. Table 1. Inpatient utilization and performance in acute hospitals in the WHO European Region, 2003 or latest available year Source: WHO Regional Office for Europe health for all database, January 2005. Notes: a 2002; b 2001; c 2000; d 1999; e 1998. Hospital beds per 1000 popu- lation Admissions per 100 population Average length of stay in days Occupancy rate (%) Belgium 5.8b 16.9d 8.0d 79.9e France 3.9a 20.4d 5.5d 77.4d Germany 6.2a 20.7a 8.6a 79.4a Netherlands 3.1a 8.8b 7.4b 58.4b EU average 4.2 18.0 6.8a 76.9b 8HiT summary: Netherlands, 2005 Pharmaceutical expenditure has risen in recent years, partly owing to an increase in the volume of prescriptions and even more because of the introduction and distribution of new, expensive pharmaceuticals. The government is prepared for a gradual growth in the pharmaceutical budget. Reimbursement is based on the average price of pharmaceuticals with a comparable effect (reference price system). If the price of a pharmaceutical is higher than the group average, the consumer has to pay the difference. The Netherlands has many processes in place to encourage appropriate use of pharmaceuticals, such as supporting the development of guidelines, peer evaluation, publications (e.g. the Bulletin of Pharmaceuticals), and the Pharmaceutical Information Line, a free telephone helpline for reliable, objective information on pharma- ceuticals. Health technology assessment Article 18 of the Hospital Facilities Act, originally related to the planning of high-technology medical facilities but extended to regulating the use of specialized services, has become more flexible and has also been coupled with evaluation activities. In general, article 18 has prevented oversupply and has stimulated effective use of technologies. However, moves towards a more flexible, effective approach to health technology control have led to the new Act on Specific Medical Services (1998), which focuses more on quality of care than on cost containment. The Health Council is responsible for decisions to adopt new technologies, and these are contingent on scientifically and financially valid findings, generated by a National Fund for Investigative Medicine. This Fund has been a driving force behind many new health technology Fig. 3. Physicians per 1000 population, the Netherlands, selected countries and EU average, 1990–2003 Source: WHO Regional Office for Europe health for all database, January 2005. 2 2.5 3 3.5 4 4.5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Belgium France Germany Netherlands EU average 9HiT summary: Netherlands, 2005 assessment initiatives in the Netherlands. However, it had problems owing to a lack of priority setting. Thus, in 1993, a top-down procedure was introduced in which high-priority subjects were identified by a steering committee and researchers were invited to submit proposals. While it is early to assess this system, and in spite of the acknowledged increased time this approach takes, it has ensured that priorities and questions of effectiveness and quality are better addressed. Financial resource allocation Since 1991, sickness funds have been subject to a so-called “double budgeting system”. On one side, each sickness fund receives a budget from the CVZ (approved by the minister and based on the minister’s macro-benefits budget) by means of risk-related capitation payments. The difference between the allocated budget and expenditure has to be covered by the flat-rate contributions which each fund determines by itself. The risk adjustment system is based on a number of factors and has been modified over time. On the other side, sickness funds negotiate budgets with providers, as well as quality, quantity and, to some extent, price of services. This system gives the funds flexibility and incentives to purchase care as effectively as possible, and also encourages market competition. The CVZ adjusts for part of the difference between the total amount of budget allocated to sickness funds and actual expenditure, relating to the ability of the sickness funds to influence the level of costs (recalculation percentage). In 2002, the percentage of full risk for the sickness funds had reached 41%, from 3% in 1995, and it is estimated that the funds are at risk for up to 53% in 2004. Payment of hospitals Since 1998, there has been a function-directed overall budget system in the hospitals. The budget is financed through the fees charged by the hospital to insurers or patients. Since 2000, payment has been performance-related, and this was the first step towards changing the hospital payment system altogether to a DRG- type Diagnosis Treatment Combinations system (introduced in 2005). This change has been instigated because of problems with the budgeting system and to stimulate hospital production to combat waiting lists. Hospitals are not at risk for major capital expenditure, for which they receive additional budgets. Payment of physicians Physicians in specialist training are salaried employees of the hospitals. GPs are paid on a per- capita basis for patients insured under the ZFW and on a fee-for-service basis for those privately insured. Since 1995, medical specialists have been budgeted as part of the hospital budgets. The budget is based on a negotiated service volume, but paid on a fee-for-service basis. If actual service volume is lower than agreed, remuneration is less than anticipated; if it is higher, the hospital can negotiate an additional production volume with the insurer to increase payment to the specialists. Since 2005, specialist services are also reimbursed by the Diagnosis Treatment Combinations system. Health care reforms Health insurance has oscillated between efforts to unite the different systems into one and those to retain the existing separations, and this is still unresolved. The Dekker report, published in 1987, prompted a government response which recommended removing the divisions between cover under the ZFW, private insurance and insurance schemes for public servants, and having a national insurance scheme providing basic cover for everyone. The plan was to have an income- related premium with a small flat-rate component; people would be able to take out supplementary 10HiT summary: Netherlands, 2005 private insurance for care not included in the basic package. The changes were to be phased in starting in 1989, with the gradual disappearance of the distinction between sickness funds, private insurance and public servant schemes. During the 1990s many incremental reforms were implemented. Some important reforms helped prepare the way for health insurance for the whole population, for example through the Health Insurance System Act of 1992, which transferred cover for certain services (e.g. pharmaceuticals) to the AWBZ (which were transferred back a few years later, however). Other implemented reforms include the introduction of open enrolment and the dissolution of sickness funds’ regional monopolies; these have increased patients’ choice of third-party payer. On the other hand, mergers among both insurers and hospitals have decreased patients’ choice. In reviewing the reforms of the last decade, the shift of responsibility for purchasing care from government to insurers can be observed as a consistent trend. Secondly there has been a trend towards more competition among care providers. Thirdly, there has been a move towards the modern way of thinking about a combination of market and non-market elements in health care. Implementation of the reforms is far behind the original schedule, but has proved much more difficult than originally anticipated. There are a few lessons to be learned from the Dutch reforms: • radical reforms take many years to implement, which is difficult for a government cabinet that is in office for only four years; • the Dutch proposal for market-oriented health care calls for “regulated competition”; • the prevention of “cream skimming” is a necessary condition to reap the benefits of regulated competition in health care; this is done rather effectively by the Dutch risk adjustment scheme. Plans are currently under way to unite the ZFW with private health insurance companies into one basic insurance scheme of the second compartment as of January 2006, in a similar way to that laid out in the Dekker report, this time, however, with a per-capita, risk-independent premium instead of a percentage contribution. The concept of a new Health Insurance Act is now under discussion. Time will tell whether these plans actually translate into practice. Conclusions The Dutch health care system, a complex and constantly changing system that is difficult to describe, is different from other systems in Europe. Its three separate components are responsible for some of its problems, particularly the second component with its issues about equity in funding, and have been the focus of reforms and debate over the past decade. On the positive side, the primary health care system is well developed and functions well, with its gatekeeping system and responsibility for two thirds of outpatient consultations. This success is illustrated through a high overall patient satisfaction with the system. Incremental change has reaped many benefits, and debate alone around a more market-oriented health care system has prompted an increase in quality improvement activities. This debate continues and only time will reveal how the Netherlands will reconcile complicated issues such as the introduction of effective market competition while simultaneously maintaining solidarity and financial accessibility. 11HiT summary: Netherlands, 2005 HiT summary Netherlands Health Care Systems in Transition European Observatory on Health Systems and Policies The Health Care Systems in Transition profile on the Netherlands was written by André den Exter, Herbert Hermans and Milena Dosljak (all at Erasmus University Rotterdam) in collaboration with Reinhard Busse (European Observatory on Health Systems and Policies). It was edited by Reinhard Busse in collaboration with Ewout van Ginnecken, Jonas Schreyögg and Wendy Wisbaum (European Observatory on Health Systems and Policies’ Berlin and Madrid hubs). The European Observatory on Health Systems and Policies is grateful to Fons Berten (Health Care Insurance Board), Tom van der Grinten (Health Care Policy and Organization Unit, Department of Health Policy and Management, Erasmus University Rotterdam), Hans Maarse (Department of Health Organization, Policy and Economics, Maastricht University) and Wynand van de Ven (Health Insurance Unit, Department of Health Policy and Management, Erasmus University Rotterdam) for reviewing the report and making valuable amendments, comments and suggestions. Additional much appreciated comments were received from Wienke Boerma, Peter Groenewegen (both at Nivel, Utrecht) and Peter Achterberg (RIVM). We would also like to thank the Ministry of Health, Welfare and Sport, namely Lejo van der Heiden, for valuable comments and support. The Health Care Systems in Transition (HiT) profiles are country-based reports that provide an analytical description of each health care system and of reform initiatives in progress or under development. The HiTs are a key element that underpins the work of the European Observatory on Health Systems and Policies. The Observatory is a unique undertaking that brings together the WHO Regional Office for Europe, the governments of Belgium, Finland, Greece, Norway, Spain and Sweden, the Veneto Region of Italy, the European Investment Bank, the Open Society Institute, the World Bank, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine. This partnership supports and promotes evidence-based health policy-making through comprehensive and rigorous analysis of health care systems in Europe.
Health Care Systems in Transition
2004
The European Observatory on Health Systems and Policies is a partnership between the World Health Organization Regional Office for Europe, the governments of Belgium, Finland, Greece, Norway, Spain and Sweden, the European Investment Bank, the Open Society Institute, the World Bank, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine.
Netherlands
Written by André den Exter Herbert Hermans Milena Dosljak and Reinhard Busse
Edited by Reinhard Busse Ewout van Ginneken Jonas Schreyögg and Wendy Wisbaum
© WHO Regional Office for Europe on behalf of European Observatory on Health Systems and Policies, 2004
This document may be freely reviewed or abstracted, but not for commercial purposes. For rights of reproduction, in part or in whole, application should b e made to the Secretariat of the European Observatory on Health Systems and Policies, WHO Regional Office for Europe, Scherfigsvej 8, DK-2100 Copenhagen Ø, Denmark. The European Observatory on Health Systems and Policies welcomes such applications.
The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the European Observatory on Health Systems and Policies or its participating organizations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The names of countries or areas used in this document are those which were obtained at the time the original language edition of the document was prepared.
The views expressed in this document are those of the contributors and do not necessarily represent the decisions or the stated policy of the European Observatory on Health Systems and Policies or its participating organizations.
European Observatory on Health Systems and Policies: WHO Regional Office for Europe Government of Belgium Government of Finland Government of Greece Government of Norway Government of Spain Government of Sweden European Investment Bank Open Society Institute World Bank London School of Economics and Political Science London School of Hygiene & Tropical Medicine
Keywords: DELIVERY OF HEALTH CARE EVALUATION STUDIES FINANCING, HEALTH HEALTH CARE REFORM HEALTH SYSTEM PLANS – organization and administration NETHERLANDS
ISSN 1020-9077 Vol. 6 No. 6
Suggested citation: Exter A, Hermans H, Dosljak M, Busse R. Health care systems in transition: Netherlands. Copenhagen, WHO Regional Office for Europe on behalf of the European Observatory on Health Systems and Policies, 2004.
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Contents
Foreword ........................................................................................v Acknowledgements .................................................................... vii Introduction and historical background ....................................1 Introduction ...............................................................................1 Historical background ................................................................6 Organizational structure and management .............................13 Organizational structure of the health care system ...................13 Planning, regulation and management .....................................23 Decentralization of the health care system ...............................30 Health care financing and expenditure .....................................33 Main system of financing and coverage ..................................33 Other sources of financing .......................................................46 Health care benefits and rationing ...........................................49 Health care expenditure ............................................................57 Health care delivery system .......................................................63 Public health services .............................................................63 Primary health care ..................................................................67 Secondary and tertiary care ......................................................71 Social care ................................................................................78 Human resources, training and practice ..................................83 Pharmaceuticals .......................................................................91 Health care technology assessment ..........................................96 Financial resource allocation ...................................................101 Third-party budget setting and resource allocation ................101 Payment of hospitals ..............................................................106 Payment of physicians .........................................................109 Health care reforms ..................................................................113 Process and content of reforms ..............................................113 Reform implementation .........................................................120 Conclusions ................................................................................133 References ..................................................................................135 Bibliography .............................................................................141 Principal legislation ..................................................................145 Glossary .....................................................................................147
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Foreword
The Health Care Systems in Transition (HiT) profiles are country-based reports that provide an analytical description of a health care system and of reform initiatives in progress or under development. The HiTs
are a key element of the work of the European Observatory on Health Systems and Policies.
HiTs seek to provide relevant comparative information to support policy- makers and analysts in the development of health care systems in Europe. The HiT profiles are building blocks that can be used:
• to learn in detail about different approaches to the organization, financing and delivery of health services;
• to describe the process, content and implementation of health care reform programmes;
• to highlight challenges and areas that require more in-depth analysis; and
• to provide a tool for the dissemination of information on health care systems and the exchange of experiences of reform strategies between policy-makers and analysts in different countries.
The HiT profiles are produced by country experts in collaboration with the Observatory’s research directors and staff. In order to facilitate comparisons between countries, the profiles are based on a template, which is revised periodically. The template provides the detailed guidelines and specific questions, definitions and examples needed to compile a HiT. This guidance is intended to be flexible to allow authors to take account of their national context.
Compiling the HiT profiles poses a number of methodological problems. In many countries, there is relatively little information available on the health
European Observatory on Health Systems and Policiesvi
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care system and the impact of reforms. Due to the lack of a uniform data source, quantitative data on health services are based on a number of different sources, including the WHO Regional Office for Europe health for all database, Organisation for Economic Cooperation and Development (OECD) Health Data and data from the World Bank. Data collection methods and definitions sometimes vary, but typically are consistent within each separate series.
The HiT profiles provide a source of descriptive information on health care systems. They can be used to inform policy-makers about experiences in other countries that may be relevant to their own national situation. They can also be used to inform comparative analysis of health care systems. This series is an ongoing initiative: material is updated at regular intervals. Comments and suggestions for the further development and improvement of the HiT profiles are most welcome and can be sent to observatory@who.dk. HiTs, HiT summaries and a glossary of terms used in the HiTs are available on the Observatory’s website at www.observatory.dk.
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Acknowledgements
The Health Care Systems in Transition profile on the Netherlands was written by André den Exter, Herbert Hermans and Milena Dosljak (all at Erasmus University Rotterdam) in collaboration with Reinhard Busse
(European Observatory on Health Systems and Policies). It was edited by Reinhard Busse in collaboration with Ewout van Ginnecken, Jonas Schreyögg and Wendy Wisbaum (European Observatory on Health Systems and Policies’ Berlin and Madrid hubs).
The European Observatory on Health Systems and Policies is grateful to Fons Berten (Health Care Insurance Board), Tom van der Grinten (Health Care Policy and Organization Unit, Department of Health Policy and Management, Erasmus University Rotterdam), Hans Maarse (Department of Health Organization, Policy and Economics, Maastricht University) and Wynand van de Ven (Health Insurance Unit, Department of Health Policy and Management, Erasmus University Rotterdam) for reviewing the report and making valuable amendments, comments and suggestions. Additional much appreciated comments were received from Wienke Boerma, Peter Groenewegen (both at Nivel, Utrecht) and Peter Achterberg (RIVM). We would also like to thank the Ministry of Health, Welfare and Sport, namely Lejo van der Heiden, for valuable comments and support.
The current series of Health Care Systems in Transition profiles has been prepared by the research directors and staff of the European Observatory on Health Systems and Policies. The European Observatory on Health Systems and Policies is a partnership between the WHO Regional Office for Europe, the governments of Belgium, Finland, Greece, Norway, Spain and Sweden, the European Investment Bank, the Open Society Institute, the World Bank, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine.
European Observatory on Health Systems and Policiesviii
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The Observatory team working on the HiT profiles is led by Josep Figueras, Head of the Secretariat, and research directors Martin McKee, Elias Mossialos and Richard Saltman. Technical coordination is led by Susanne Grosse- Tebbe.
The production and copy-editing process was coordinated by Jeffrey V. Lazarus and Susanne Grosse-Tebbe, with the support of Shirley and Johannes Frederiksen (lay-out) and Thomas Petruso (copy-editor). Administrative support for preparing the HiT on the Netherlands was undertaken by Pieter Herroelen.
Special thanks are extended to the WHO Regional Office for Europe health for all database, from which data on health services were extracted; to the OECD for the data on health services in western Europe; and to the World Bank for the data on health expenditure in central and eastern European countries. Thanks are also due to national statistical offices that have provided data.
The HiT reflects data available in summer 2004.
1
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Health Care Systems in Transition
Introduction and historical background
Introduction
The Kingdom of the Netherlands (Koninkrijk der Nederlanden, in Dutch) is located in western Europe, bordering the North Sea (451 km of coast) to the west and north, Belgium (450-km border) to the south and Germany
(577-km border) to the east (Fig. 1). It covers an area of 41 532 km2 (33 889 km2 of land and 7643 km2 of water. The highest point is Vaalserberg in the south- east corner, near the border with Belgium and Germany (altitude 322.5 m), and the lowest point is near Rotterdam, in Prins Alexanderpolder (Nieuwerkerk aan den Ijssel, 6.74 m below sea level). The climate in the Netherlands is moderate, with an average temperature of 16–17 °C in summer and 2–3 °C in winter.
The total population is 16 258 032 people (2004) 8 045 914 males (49.5%) and 8 212 118 females (50.5%). The capital of the Netherlands is Amsterdam (737 000 inhabitants, 2003), but the seat of government is in The Hague (Den Haag; 464 000 inhabitants, 2003). The Netherlands comprises of 12 provinces and is a very densely populated country, with more than 450 inhabitants per square kilometre. Eighty-one per cent of the population are natives (Natives are persons whose parents were born in the Netherlands, irrespective of their own country of birth), and 19% have a foreign background (Persons are considered to have a foreign background if at least one parent was born abroad), like Moroccan, Surinam and Turkish. Regarding religion, 31% are Roman Catholic, 14% Dutch Reformed, 8% Calvinist, 5.5% Muslim, 0.6% Hindus, 1.9% other and 40% unaffiliated (2002). Of the population, 24.5% are 19 years of age or under, 28% are between 20 and 39 years of age, 33.6% are between 40 and 64 years of age, 10.4% are between 65 and 79 years of age, and 3.4% are 80 years of age or older (2004). The rate of live births is 12.5 births per 1000 inhabitants
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Fig. 1. Map of the Netherlands1
Source: World Factbook 2004.
(2002), and the death rate is 8.8 deaths per 1000 inhabitants (2002). Forty-three per cent (43%) of the population are married, 45% are single, 5.4% are widowed and 5.8% are divorced (2004).
1 The maps presented in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of the European Observatory on Health Systems and Policies or its partners concerning the legal status of any country, territory, city or area or of its authorities or concerning the delimitations of its frontiers or boundaries.
Belgium
Germany
Den Helder
Ijmuiden
Haarlem
The Hague
Europoort
Dordrecht
Terneuzen
Rotterdam
Tilburg
Eindhoven
Nijmegen
Arnhem
Zwolle
Assen
GroningenLeeuwarden
Delfzijl
North Sea
Amsterdam Utrecht
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Political system
The formal head of the Netherlands is the King or Queen which, since 30 April 1980, has been Queen Beatrix Wilhelmina Armgard, but only the government has executive power. The head of the government is Prime Minister Jan Peter Balkenende (since 2002). The parliament, called States General (Staten- Generaal), represents the population; it consists of the Second Chamber (Tweede Kamer) and the First Chamber (Eerste Kamer). This bicameral system began in 1815. The First Chamber or Senate has 75 members elected for 6 years by the 12 provincial councils, while the Second Chamber – politically the most important – has 150 members elected directly for 4 years. All major national political parties are represented in the Second Chamber. Since no one party has a majority, a coalition of several parties is necessary to form a cabinet. Together, the two chambers have the power to legislate. The major role of the Second Chamber is to amend and approve bills put forward by the government, while the First Chamber can only approve or reject laws that have already been passed by the Second Chamber.
The constitutional character of the Dutch state is expressed through the Trias Politica (separation of powers) and an extensive system of checks and balances. The Trias Politica is most easily on between legislative and executive power is less clear, given that the government makes laws (also in the health care field) in conjunction with parliament and can lay down binding rules upon citizens. Checks and balances come from various sources: the bicameral system, judicial control, administrative supervision, and the right of amendment by the Second Chamber.
Health status
A recent national health status report (Van Oers, 2003) concluded that the vast majority of the Dutch population enjoys good subjective health. Over the past decades Dutch life expectancy at birth has in the year 2002 risen to 76.0 years for men and to 80.7 years for women. The years that have been added over the last decade are generally spent in good health. Major causes of death are cardiovascular diseases and cancers.
Around the year 2000 Dutch men and women experienced roughly the same number of healthy years: 61 years spent in self perceived good health, more than 70 without disabilities, and 68 in good mental health. Consequently, the number of unhealthy years is considerably higher for women than for men.
The positive development of Dutch health has for a large part been associated with a high level of economic development since the Second World War and for a smaller, but probably significant, part to a well-developed health system.
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Dutch life expectancy used to be among the highest in the world, but recently the increase has been confined to men and life expectancy at birth has dropped to about EU-15 average for Dutch women. High levels of smoking, unhealthy diets, alcohol abuse and other related risk factors, such as high blood pressure, obesity and physical inactivity are probably responsible for this relatively bad development in recent years. Dutch mortality is still rather low, which is partly caused by relatively low mortality at younger ages due to low rates of traffic accidents. Perinatal mortality, which is often considered an important health system indicator, is also stagnating compared to the EU-15 average. This has been attributed to a number of recently increasing risk factors: a higher percentage of children born to ethnic minority mothers – which is also associated to lower socioeconomic status; the increasing average age of Dutch mothers at birth of their children – now among the oldest at childbirth in Europe – an increasing percentage of twins and triplet births, which is caused by infertility treatments, such as “In Vitro Fertilisation”. Finally, a relatively large percentage of Dutch women are still smoking during pregnancy (1). There are no indications, however, that the Dutch health system, which still knows a large percentage of home births, has in any way worse health outcomes than other systems.
Socioeconomic and urban-rural, health differences still exist in the Netherlands and these differences have not decreased in recent years. In the larger Dutch cities a number of health related problems accumulate: drug addiction, alcoholism, sexually transmitted diseases, violence, psychiatric problems, social isolation and homelessness. These problems are more prevalent in lower socioeconomic groups.
According to Statistics Netherlands (Centraal Bureau voor de Statistiek), in 2003, 25.8% of the population described their health status as very good, 54.7% as good and 19.5% as less than good (2). Table 1 gives some demographic and health indicators for the Netherlands for the period from 1980 to 2000.
Economy
The Netherlands’ prosperous and open economy is based on private enterprise, with the government’s presence felt in many of its aspects. Industrial activity features food processing, petroleum refining, and metalworking. The highly mechanized agricultural sector employs only 4% of the labour force, but provides a large surplus for exports and the domestic food-processing industry. As a result the Netherlands ranks third worldwide in value of agricultural exports. Sharp cuts in subsidies and social security spending since the 1980s helped the Dutch achieve sustained economic growth, combined with falling
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unemployment and moderate inflation. The economy has been growing by around 3-4% annually during the nineties and slowed down over the last few years. Since 1998, unemployment has been less than 5.0% of the labour force; in the late 1990s, inflation was around 2.0% and rose over the last few years. The Dutch joined the first wave of 11 EU countries, launching the Euro monetary system on 1 January 1999. Table 2 gives some macroeconomic indicators for the Netherlands, for 1980–2002.
Table 1. Demographic and health indicators, 1980–2002
Indicator 1980 1985 1990 1995 2000 2001 2002
Population (x 1000)
14 150 14 492 14 952 15 459 15 926 16 105 16 193
% population 65 years of age or over 11.5 12.1 12.8 13.2 13.6 13.7a 13.7a
Live births (per 1000 population) 12.8 12.3 13.2 12.3 13.0 12.6a 12.5a
Crude death rate (per 1000 population) 8.1 8.5 8.6 8.8 8.8 8.7a 8.8a
Total fertility rate (average number of children per woman) 1.6 – 1.6 1.5 1.7 1.7a 1.7a
Life expectancy at birth (years) 76.0 76.6 77.2 77.7 78.3 – –
Female life expectancy at birth (years) 79.5 80.0 80.4 80.6 80.8 80.7a 80.7a
Male life expectancy at birth (years) 72.6 73.2 73.9 74.7 75.7 75.8a 76.0a
Infant mortality (per 1000 live births) 8.6 8.0 7.1 5.5 5.1 5.4a 5.0a
Standardized death rate (all causes per 1000 population) 8.12 7.87 7.49 7.25 6.92 – –
Standardized death rate (all causes per 1000 population)* - - 8.6 8.4 8.0 7.9 7.9
Source: WHO Regional Office for Europe health for all database; aStatistics Netherlands (Centraal Bureau voor de Statistiek) 2004.
Table 2. Macroeconomic indicators (1980-2002)
Indicator 1980 1985 1990 1995 2000 2001 2002
GDPa per capita (in US $PPP)b 8 860 12 204 16 596 21 251 27 183 27 190 29 000
GDP growth rate (% change)c – – – 3.0 3.5 1.2 0.2
Annual average rate of inflation
(%)c – – – 1.4 2.3 5.1 3.9
Unemployment rate (%) 4.6 10.8 5.0 7.1 2.6 2.0 2.3
Sources: WHO Regional Office for Europe health for all database; c Eurostat 2004.
Notes: a GDP: gross domestic product; b PPP: purchasing power parity.
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Historical background
Hospitals
Health care in the Netherlands originated largely through the efforts of voluntary organizations. Assistance was often provided on a charitable basis. In the past, such organizations were run largely along religious or ideological lines, which led to the creation of facilities with a Protestant, Roman Catholic, Jewish or humanistic base (3). The history of health care reflects the changing relationship between the government and the voluntary organizations. Originating largely in private and often charitable initiatives, almost all Dutch hospitals are still private and are all non-profit organizations, but are no longer organized strictly on a denominational basis.
Despite the predominance of private ownership, the government heavily regulates the Dutch health care system. Production and capacity of Dutch hospitals are subject to regulation; the Hospital Provision Act (Wet Ziekenhuisvoorzieningen, WZV) strictly regulates hospital capacity. Before hospital construction may take place, a government licence must be obtained.
In the postwar period, through the 1950s, there was a focus on hospital construction, as part of the overall effort to rebuild the nation. In 1971, a comprehensive planning system for inpatient health facilities was started under the Hospital Provision Act (WZV). The main motive for comprehensive planning was the public perception that facilities were poorly allocated. It was widely felt that too many hospitals were located in the major urban areas and that too few were located in other parts of the nation.
Health insurance – sickness funds and private insurance
The Sickness Fund Act (also known as the Compulsory Health Insurance Act; Ziekenfondswet, ZFW), from 15 October 1964, is one of the Netherlands’ most recent pieces of social insurance legislation (4). It came fully into force on 1 January 1966 – but, in fact, insurance covering the cost of medical care is one of the oldest forms of insurance in the Netherlands. Voluntary systems, with contributions based on ability to pay, existe the late Middle Ages. They originate from the system of guilds. Mutual support among guild members included payment for medical treatment: the guilds established funds to which their members contributed and from which the doctors were paid. Such forms of insurance existed even after the abolition of the guilds in 1798 and during the industrial revolution. The terrible conditions of the urban poor in the
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mid-nineteenth century led doctors to establish sickness funds in a few of the larger cities. Such voluntary schemes were gradually extended to the whole country, partly thanks to the efforts of the growing trade union movement.
Health insurance remained entirely voluntary until 1941 when, under pressure from the German occupying authorities, the Sickness Fund Decree split the health insurance market into three sub-markets: (1) a compulsory social health insurance scheme for employed people (and their families), (2) a voluntary social health insurance for self-employed people and (3) private health insurance for the rest of the population. The Sickness Fund Decree required sickness funds to include hospital care and specialist treatment in their benefits package. As with the earlier private sickness funds, the Decree also refers to the benefits-in-kind delivered by contracted providers.
From 1941 to 1965, the system of compulsory insurance was further developed gradually, with cover being extended both to new types of benefits and new groups of non-employees. One group that came to be covered by compulsory insurance comprised the elderly population who received benefits under the 1947 pension legislation. When the General Old Age Pensions Act (Algemene ouderdomswet, AOW; covering all elderly) replaced this legislation in 1957, a separate health insurance scheme for the elderly whose income fell below a set ceiling replaced compulsory sickness fund insurance for that group.
Such piecemeal development did not make for a clear and straightforward system, as the substance of the legislation was spread over a broad array of orders, decrees and acts. In addition to introducing various innovations, the new Sickness Fund Act (ZFW) brought together and codified the law in this field. The existing benefits-in-kind system was maintained in the ZFW system. Originally, the Act provided compulsory insurance for people in similar employment and comparable groups, a scheme covering the elderly and a voluntary scheme for those not eligible for cover under the compulsory schemes. In all three cases, eligibility was subject to an income ceiling. The scheme for the elderly and the voluntary scheme were not allowed to turn people away because they were “poor risks”. Over the years, a situation evolved where the “good risks” were able to obtain lower-cost cover from private insurers while the so-called poor risks had to rely on the statutory schemes. As a result, these schemes faced ever-worsening financial problems, which eventually led to their abolition on 1 April 1986. Those insured under the scheme for the elderly, together with elderly people insured under the voluntary scheme with reduced contributions, were transferred to the general scheme of compulsory insurance. The scheme was also extended to certain categories of social-benefit recipients. To solve the problem of the disproportionate number of elderly in the sickness fund scheme,
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the Act on the Joint Funding of Elderly Sickness Fund Beneficiaries (also known as the Overrepresentation of Elderly Health Insurance Act Beneficiaries Joint Financing Act; Wet Medefinanciering Oververtegenwoordiging Oudere Ziekenfondsverzekerden, MOOZ) was intr oduced at the same time. As a result of this law, the privately insured contribute to the disproportionate high costs of the sickness fund scheme.
The abolition of the insurance scheme for the elderly and the voluntary scheme meant that some of the people formerly covered by these schemes now had to rely on private insurance. In order to guarantee access to the private insurance market, insurers were required to include among their policies one that offered cover as defined in the Health Insurance Access Act (also known as the Medical Insurance Access Act; Wet op de Toegang tot Ziektekostenverzeke ringen, WTZ), known as a WTZ standard policy. Rules governing acceptance, coverage and the premiums payable are defined in the Act.
It became clear, very soon after the new Act came into force, that certain categories of people were finding it hard to pay private medical insurance premiums. These premiums, unlike contributions to the social health insurance schemes, were not related to income. Elderly people with only a state pension to live on, or perhaps a small supplementary pension as well, were particularly hard hit. Although the government acknowledged this problem and, indeed, reduced the premium payable by the elderly under the Act, no structural measures were taken to link premium levels to income, because of the planned reform of the system of health insurance. When these plans stagnated, parliament finally voted unanimously in favour of a bill tabled by the then Member of Parliament, Van Otterloo; this bill amended the health insurance system to help pensioners with no supplementary pension or a very small supplementary pension in addition to their state pension.
With the introduction of the Van Otterloo Act, the state pension became the basis for cover under the Sickness Fund Act (ZFW), provided that income did not exceed a certain level. On 1 January 1997, the ceiling for sickness fund insurance for recipients of state pensions was raised more than proportionally to €15 973, and on 1 July 1997, it was raised to €17 330. These increases meant that more pensioners became eligible for cover under the ZFW. As a result of this increased eligibility, most people insured under the ZFW when they reach the age of 65 years continue to be insured in the same way thereafter (the so-called “stay where you are” principle). The main motive for this legislated protection was that a number of groups of insured people had to spend an unjustifiably large share of their income on premiums. This expense affected the elderly who the Health Insurance Access Act (WTZ) determined had to remain privately insured
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after reaching the age of 65 years and also affected insured people whose income was only slightly above the upper limits stipulated in the ZFW. By increasing these upper limits, the Van Otterloo Act expanded the number of people insured by the sickness funds by approximately 162 000.
The Sickness Fund Act (ZFW) was also amended (effective from 1 August 1997) so that new students receiving financial assistance under the Student Finance Act (Wet op de Studiefinanciering, WSF) could no longer be insured as dependants free of charge under their parents’ sickness fund. These students are now covered by a private medical insurance scheme. The Student Finance Act provides for a grant to cover the cost of this. Students who had already begun their studies before 1997, who were already eligible for (and are still entitled to) financial assistance, retain the right to insurance as a dependant for the remainder of their studies.
On 1 January 1998, the Health Insurance Restructuring Act (Wet Herstructurering ZFW) came into force. This Act sought to provide a solution to a number of widely regarded unjust situations that followed the enactment of the Van Otterloo Act. The series of measures introduced were primarily aimed at improving the insurance position of people over 65 years of age. Since January 2000, self-employed people below a certain income limit are also insured mandatorily under the Sickness Fund Act (ZFW).
Health insurance – the Exceptional Medical Expenses Act (AWBZ)
The Exceptional Medical Expenses Act (Algemene Wet Bijzondere Ziektekosten, AWBZ) came into force on 14 December 1967, with phased implementation of its content beginning on 1 January 1968. With the introduction of the Health Insurance Bill in 1962 (which later became the Sickness Fund Act), the then Minister of Health also launched the idea of an insurance scheme covering the whole population for serious medical risks. This cover included expenses that anyone faced through serious illness or long-term disability – notably mental illness requiring prolonged nursing and care, and congenital physical or mental handicap – expenses that virtually no one is in a position to bear without help from the state or elsewhere.
In 1966, following consultations with the Sickness Fund Council (Commissie toezicht uitvoeringsorganisatie, CTU; since 2000, the Health Care Insurance Board (College voor zorgverzekeringen, CVZ)) and other bodies, a bill was submitted to parliament that provided everyone in the country with compulsory insurance against the expenses associated with serious medical problems. While
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the risk of such problems might not be great, should such a risk materialize, the costs involved would be beyond the ability of virtually anyone to pay; this notion led later to the use of the term “exceptional medical expenses”.
The scope of the Act is considerable: Having initially served mainly as a means of funding long-term or high-cost care in various types of institutions, the Act’s provisions have been extended over the years to cover more and more elements of health care, of which many are neither prolonged nor expensive. At different times, it was planned to gradually transform the Act into a health insurance scheme encompassing the whole population and covering the great majority of health and social services. The multitude of existing insurance schemes would then have been absorbed, wholly or partially, into the new scheme.
In the 1980s, psychiatric care as well as aids and appliances were taken out of the insurance package covered by the Sickness Fund Act (ZFW) and placed within the scope of the Exceptional Medical Expenses Act (AWBZ). At the beginning of the 1990s, the package of entitlements under the AWBZ was expanded to include pharmaceutical services, the services of a genetic testing centre, rehabilitation and treatment at an audiology centre. The purpose of expanding the cover under this Act was to create a form of basic insurance. The idea was to have a system whereby everyone would be insured by the same basic scheme, covering about 85% of health care costs.
When the Kok government came to power in 1994, the idea of basic insurance was abandoned, because earlier government proposals in this area had come to nothing, as a result of divergent social and political views on the subject. A decision was made to continue to divide the insurance system into three categories, based to a large extent on existing arrangements. As detailed in the section on Health care reforms, the issue of whether and how to integrate the health care system remains an extremely complex one.
The so-called first compartment includes care that is funded through the Exceptional Medical Expenses Act (the Sickness Fund Act/private insurance constitutes the second compartment, and voluntary supplementary insurance constitutes the third); specifically, it includes long-term care and treatment and services that cannot be insured by individuals – that is, along the original lines of entitlements under this Act. The target group for services provided under the Act has expanded a great deal and has become much more diverse over the past few years; it presently comprises elderly people, the disabled and mentally ill patients with chronic problems. The Act, however, should be designed to cope with changing demand more effectively. The government’s aim in doing so is to create a system that will continue to guarantee a high standard of accessible and affordable care for all.
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Other insurance schemes
Civil servants (employees of central government) have traditionally been excluded from the social insurance schemes for employees on account of the special nature of their conditions of service. Civil servants are not employees within the meaning of the Sickness Fund Act (ZFW) and, as such, are not covered by the ZFW.
The Central Government Personnel Act (Ambtenarenwet) of 1929 and the Police Act (Politiewet) include provisions that set out the entitlements of civil servants and officers of the national and municipal police force in case of sickness. These entitlements include not only the continued payment of their salary by the central government in the event of sickness but also include the continuation of their medical benefits. Similar provisions, based on the Central Government Personnel Act, cover provincial and municipal authority personnel.
Since the Second World War, the government has been pressed on a number of occasions to bring public servants within the scope of the Sickness Fund Act (ZFW). Organizations of civil servants and provincial and municipal employees, in contrast, favoured a scheme embracing the employees of all public bodies. In 1968, however, a large majority in the First Chamber rejected a bill with this aim.
In 1951, the government had four options from which to choose:
1. particular payments to meet the costs of health insurance;
2. a reimbursement scheme for certain medical expenses;
3. a reimbursement scheme for exceptional expenses that exceeded 5% of a person’s income; and
4. the extension of the Sickness Fund Decree then in force to all public servants.
At the time, the government opted for what was intended to be a temporary arrangement that provided for regular payments towards the cost of private health insurance (or, in the case of public sector employees with an income below the statutory ceiling, voluntary cover with a sickness fund). This scheme, known as the Provisional Medical Expenses Scheme, covered civil servants and teachers.
In 1955, the supplementary system of special payments was replaced by the 5% scheme, which provided for the reimbursement of any medical expenses (reasonably incurred by a public sector employee and their family and borne by the employer) in excess of 5% of the individual’s salary. This scheme was later extended to former employees who received disability or retirement
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pensions, and a similar scheme was set up for military personnel. On 1 January 1981, the 5% scheme was replaced by the Public Servants’ Medical Expenses Scheme (Regeling Ziektekostenvoorziening Overheidspersoneel, ZVO), which is administered by an autonomous agency. Percentage deductions under the Public Servants’ Medical Expenses Scheme are based on the employee’s share of the percentage contributions deducted under the sickness fund scheme. The costs of medical care, similar to that available under the Sickness Fund Act (ZFW), are reimbursed.
These schemes, which (from the late 1950s) were the product of various reports issued by the Limburg section of the Association of Dutch Municipalities (Vereniging van Nederlandse Gemeenten, VNG), the public sector employees’ organizations, the municipal authorities’ national forum for personnel matters and the Association of Provincial Authorities, were modelled on the health scheme for police personnel that had existed since the 1930s; this health scheme was changed into the Police Medical Service (Dienst Geneeskundige Verzorging Politie, DGVP) by Royal Decree in 1949.
Municipal employees and staff employed by the province of Limburg are covered by the Public Servants’ Health Insurance Institute (Ziektekostenregeling ambtenaren, IZA)/Netherlands scheme, created by the merger on 1 April 1993 of ten separate IZA schemes, each covering the municipalities in one or more provinces. The Provincial Authorities’ Health Insurance Scheme (Interprovinciale Ziektekostenregeling, IZR) covers provincial authority employees outside of Limburg.
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Organizational structure and management
Organizational structure of the health care system
In the Netherlands, three parallel compartments of insurance coexist: the first compartment is a national health insurance scheme for exceptional medical expenses; the second compartment consists of different regulatory
regimes – one for compulsory health insurance through sickness funds for those under a certain income, and another for private health insurance, mostly voluntary; and the third compartment is voluntary supplementary health insurance. These different compartments and the systems that constitute them are steered and supervised by different ministries and have (at least) partly different relationships to the insured on the one side and the providers on the other side. These three compartments characterize the organizational structure of the Dutch health care system (Fig. 2).
Supplement health insurance (voluntary)
Third compartment
Sickness funds (compulsory under a certain income)
Private health insurance (mostly voluntary)
Second compartment
National health insurance for exceptional medical expenses (compulsory for the entire population)
First compartment
Fig. 2. The health insurance system (2004)
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Government
The revised Constitution of 1848 defines the government as the monarch acting in conjunction with the ministers. The Constitution does not define the monarch’s task within the government, but it is tacitly agreed that the monarch has the following rights: the right to be consulted, the right to encourage and the right to advise. The ministers form the Cabinet Council; it is one of the country’s main executive bodies, deliberating and deciding upon general policy and stimulating its unanimity. The definition of “general policy” is left to the interpretation of the Cabinet Council. A cabinet minister is usually head of a ministry. Ministries are separate administrative bodies responsible for certain elements of the general policy. Ministers are accountable to parliament for their specific responsibilities. The Prime Minister, who is the chairman of the Cabinet Council, is responsible for cohesion and coordination of government policy. His position is one of primus inter pares (first among equals), which renders him powerless to make any changes in the Cabinet (5).
Ministry of Health, Welfare and Sport The Ministry of Health, Welfare and Sport (Ministerie van Volksgezondheid, Welzijn en Sport, VWS) defines policies that aim to ensure the wellbeing of the population in the Netherlands and that aim to help the populace to lead healthy lives. One of the main objectives is to guarantee access to a system of health care facilities and services of high quality. To foster this, the health ministry has established the social health insurance schemes under the Exceptional Medical Expenses Act (AWBZ) and the Sickness Fund Act (ZFW). Fig. 3 shows the organizational structure of the health ministry, including subordinated institutes and agencies that assume many of the actual tasks.
The Ministry of Health, Welfare and Sport and local authorities bear joint responsibility for public health care and play separate complementary roles. The Ministry of Health, Welfare and Sport and the Ministry of Interior and Kingdom Relations (Ministerie van Binnenlandse Zaken en Koninkrijksrelaties, BZK) are also involved in integrated public safety policy, including the implementation of the Medical Assistance (Accidents and Disasters) Act (Wet Geneeskundige Hulpverlening bij Ongevallen en Rampen, WGHOR). The Ministry of Health, Welfare and Sport runs the National Institute of Public Health and the Environment (Rijksinstituut voor de Volksgezondheid en Milieuhygiëne, RIVM), a major knowledge centre for public health care. The Ministry of Interior and Kingdom Relations is responsible for standards in public administration as well as for policy on urban areas and the integration of minorities. It also coordinates integrated public safety and security policy.
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Inspectorates monitor and enhance the quality of health and wellbeing of the population. There are three inspectorates: The Food and Consumer Product Safety Authority (Voedsel- en Waren Autoriteit, VWA); the Health Care Inspectorate (Inspectie voor Gezondgeidszorg, IGZ); and the Inspectorate for Youth Care (Inspectie Jeugdzorg, IJZ). In the field of health care, the Health Care Inspectorate is the most important.
Ministry of Social Affairs The main tasks of the Ministry of Social Affairs and Employment (Ministerie van Sociale Zaken en Werkgelegenheid, SZW) are to stimulate employment, modern labour relations and an active social security policy. To realize these
Fig. 3. The organization chart of the Ministry of Health, Welfare and Sport
Minister State Secretary
Secretary-General Deputy
Secretary-General Director-General
for Health Director-General
for Care Director-General for Social Care
Policy directorates Innovations, Professions and
Ethics Directorate (IBE) Prevention and Public
Health Directorate (POG) Food and Health
Protection Directorate (VGB)
Council and Committee seretariats
Central Committee on Research involving
Human Subjects (CCMO) Health Council (GR)
Advisory Council on Health Research (RGO) Council for Social
Development (RMO) Council for Public Health and Health Care (RVZ)
Policy directorates Curative Care
Directorate (CZ) Health Care Insurance
Directorate (Z) Pharmaceutical Affairs
and Medical Technology
Directorate (GMT)
Policy directorates Disabled Persons Policy
Directorate (DGB) Youth Policy
Directorate (DJB) Social Policy
Directorate (DSB) Nursing, Care and
Older Persons Directorate (DVVO) Mental Health and Addiction Policy
Directorate (GVM) Department Victims and Remembrance
WWII (VRW)
Policy directorates International Affairs
Directorate (IZ) Economic Affairs and Labour
Market Policy Directorate (MEVA)
Sports Directorate (DS)
Audit Department (AD) Financial and Economic Affairs Directorate (FEZ)
Legislation and Legal Affairs Directorate (WJZ)
Personell and Organisation Directorate (DP&O)
Information and Communication
Directorate (DVC) General Administration and
Governance Support Directorate (DBO)
Facilities Department (FD) Financial and Personell
Management (FPB)
Support directorates
Facilities units
Project organizations
Departments and institutions Agency of the Medicines Evaluation Board (MEB)
Central Information Unit on Health Care Professions (CIBG)
Health Care Inspectorate (IGZ) Inspectorate for Youth Care (IJZ)
National Institute of Public Health and the Environment (RIVM)
Social Cultural Planning Office (SCP) The Food and Consumer Product
Safety Authority (VWA)
Source: Based on Ministry of Health, Welfare and Sport 2004 (http://www.minvws.nl/organisatie/ organogram, accessed 1 September 2003 (6).
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tasks, the Ministry of Social Affairs and Employment collaborates with other ministries, such as the Ministry of Health, Welfare and Sport. Nonetheless, the Ministry of Social Affairs and Employment is responsible for health-related social security schemes covering, among other things, sickness benefits and disabled benefits. These benefits are outside the health insurance scheme, although they are part of the employee insurance scheme which is funded by contributions paid by employers and employees. The implementing bodies of the Sickness Benefits Act (Ziektewet, ZW) and the Disablement Benefit Act (Wet op de arbeidsongeschiktheidsverzekering, WAO) are the social security agencies, as instructed by the National Institute for Social Security (Landelijk Instituut Sociale Verzekeringen, Lisv).
Ministry of Finance The Ministry of Finance has shared responsibility with the Ministry of Health, Welfare and Sport in supervising changes in the standard insurance scheme – notably, the standard insurance contribution. Private health insurers implement this standard insurance scheme. The legal basis of the standard insurance scheme is the Health Insurance Access Act of 1998 (WTZ 1998).
Third-party payers, associations and supervising organizations
As of 2004, there are 22 sickness funds (ziekenfondsen) in the Netherlands. Until recently, the sickness funds were members of a coordinating body, the Association for Sickness Funds (Vereniging van Nederlandse Ziekenfondsen, VNZ). In 1995 this association merged with the Contact Body for Private Health Insurers (Kontaktorgaan Landelijke Organisatie van Ziektekostenverzekeraars, KLOZ) into one central organization called Health Insurers Netherlands (Zorg- verzekeraars Nederland, ZN). Membership in this association is voluntary. The sickness funds, however, are under the control of the Sickness Fund Council (Ziekenfondsraad, ZFR). Since January 2000, this Council has been renamed the Health Care Insurance Board (College voor zorgverzekeringen, CVZ).
Health Care Insurance Board (CVZ). Since April 2001, the Board has been made up of nine independent members appointed by the health minister. Previously, the Board consisted of the major health care interests in the Netherlands, including employers, trade unions, health insurers, physicians, consumer groups and the government. The main responsibilities of the Board are to manage the implementation of the Exceptional Medical Expenses Act (AWBZ) and the Sickness Fund Act (ZFW), finance the executive bodies (i.e. sickness funds) and manage the collective resources provided by these laws. In addition, the Board has a number of other tasks. One is to inform the health
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minister about all matters concerning insurance under both acts. If the advice relates to policy proposals or proposed statutory regulations, only specific implementation aspects will be considered. The Board has the power to issue insurers instructions about administrative procedures, the registration of people insured, the collection of statistics, annual reports and the conditions of service of staff. It also manages the funds for the AWBZ and the ZFW, into which percentage contributions are paid and from which health services under the acts are financed (via the sickness funds/insurers) and resources are made available for research and publications that relate to health care. The Board is accountable to the health minister, to whom it reports annually on its work. Appeals against decisions by the Board can be taken to the division of administrative jurisdiction of the Council of State (Raad van State), a statutory body that has, among other things, certain administrative juridical competencies.
Supervisory Board for Health Care Insurance (College van toezicht op de zorgverzekeringen, CTZ). Supervision of the implementation of the Exceptional Medical Expenses Act (AWBZ) and the Sickness Fund Act (ZFW) was originally assigned to a committee of the previous Sickness Fund Council (CTU). Since April 2001, the CTU has been transformed into an independent board, the Supervisory Board for Health Care Insurance. The Supervisory Board supervises both the individual executive bodies and the overall implementation of the Exceptional AWBZ and the ZFW. The Supervisory Board consists of five independent members who are not members of the Health Care Insurance Board.
Private health insurers consist of commercial private not-for-profit and for-profit insurance organizations, and private insurance organizations linked with sickness funds.
There has been a tendency towards concentration and cooperation in health insurance. During the period 1985–1993, the number of sickness funds was halved, from 53 to 26, as a result of funds merging. The goals of these mergers were to strengthen the market position of each new fund, to make management and marketing more professional, to achieve economies of scale for administration costs and to pool risk (the law of large numbers). Mergers also occurred among private health insurance funds, as well as between private health insurance and sickness funds. In the latter case, a holding body is used; in this merger, the separate entities are responsible for implementing the sickness insurance programme and private insurance programme. Finally, strategic alliances between sickness funds and private insurers have been developed. These alliances try to benefit from the experience of private insurers in market competition and try to find attractive partners for expanding the package of entitlements. Private insurers see such alliances as a chance to expand their market for insurance products.
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The process of concentration cannot be separated from the ongoing process of integration of health insurance into a much broader package of insurance products (for example, travel, life and liability insurance). Marketing an integrated package of insurance products, one that transcends the domain of traditional (social) health insurance, is now considered a strategic necessity if insurers want to be competitive in the health-insurance market. Also, offering a comprehensive package of insurance products is now considered essential for successful contracting with employers.
Despite the overall tendency of the health insurance market towards concentration, an opposing trend is also observable. Between 1994 and 1997, newly established sickness funds were founded by private health insurers (intended to offer employers an integrated package of insurance products), raising the number of sickness funds to 30 in 1997. Between 1997 and 2003 the number decreased again due to of several mergers and since 1 January 2003 there are only 22.
Advisory and administrative bodies
An important aspect of the Dutch health care system is the decision-making process. Guided by a long history of consensual consultation and of policy debate, health policies are now shaped by the interaction between the government and organized groups. Health care during the decades after the Second World War witnessed the rapid development of advisory and administrative bodies. Since the early 1990s, however, a restructuring process was started by the health ministry; it is aimed at reducing the number and improving the transparency of decision-making bodies in health care. The main organizations are:
The Health Council (Gezondheidsraad, GR). This Council is the statutory body that advises the government on the scientific state of the art in medicine, health care, public health and environmental protection. To carry out its responsibility, the council brings together groups of experts on specific topics, at the request of the government. It can also initiate studies on its own. The Council has broad interests, covering most fields in natural sciences and medical research, as well as environmental issues and (lately) nutrition. It has about 160 officially appointed independent members, supported by a small, executive secretariat. Council members (together with outside experts) form ad hoc committees; at any given time, there are 40 to 50 committees with an average of 10 experts each. In this way, a large number of experts from Dutch and foreign scientific communities, representing many different medical specialities and scientific disciplines, can be consulted by the Council.
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Health Council committees usually evaluate the effectiveness, efficiency, safety, and availability of health technologies. This mandate is based on the new Special Medical Procedures Act (Wet op bijzondere medische verrichtingen, WBMV; previously the Article 18 programme of the Hospital Provision Act), which is also known as the Exceptional Medical Procedures Act. Some committees also examine epidemiological and economic aspects of health care and – in specific cases – ethical, legal, and social issues. The main research method uses a synthesis of available literature and experts’ critical appraisal of conclusions derived from the literature. The Council is also strengthening its “early warning” activities.
Council for Public Health and Health Care (Raad voor de Volksgezondheid en Zorg, RVZ; before 1995 the National Council on Public Health, Nationale Raad voor de Volksgezondheid, NRV). This Council is an independent governmental advisory body, installed by the Minister of Health, Welfare and Sport. The council consists of nine members, including the chairman. They are all appointed by Her Majesty the Queen. Their backgrounds vary considerably, but they all are familiar with the heath care sector and they serve the general interest, independent of their institutions and organizations. The Council advises on health care and welfare policy issues; the main focus now is to stimulate a coherent policy on the quality of health care in the Netherlands. In particular, the Council has given advice on primary health care, care for the elderly and for people with psychological problems, financial matters, medical ethics, rights of patients, cooperation between institutions, information technology in health care, and professionals in health care. To this end, a 5-year task force, called the Committee on Developing Policy for Quality of Care, has been established.
The Council also gives strategic advice on matters such as major governmental problems and political choices. When the government requests advice at an early stage, before political decisions have been made, the Council investigates the pros and cons of possible solutions and describes the long-term and short-term consequences of the various choices. Most of the requests are received from the Minister of Health, Welfare and Sport, although requests are also received from other ministers and members of the First Chamber and Second Chamber. Hence, the Council advises primarily on demand. The Council may occasionally take the initiative and offer unsolicited advice. A secretariat, based in Zoetermeer, supports the Council members.
Board for Health Care Tariffs (also known as the Health Tariffs Authority; College Tarieven Gezondheidszorg, CTG; previously the Central Council for Health Care Charges – Centraal Orgaan Tarieven Gezondheidszorg, COTG). This Board is the independent governmental body that implements the Health
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Care Tariffs Act (Wet Tarieven Gezondheidszorg, WTG), which is also known as the Health Care Charges Act. The Board is made up of nine independent members, including the chairman, all appointed by the Minister of Health, Welfare and Sport. The Board’s most important statutory tasks are: to determine policy guidelines that provide the framework for tariff negotiations between relevant parties; to approve/set all (maximum) tariffs charged in health care; to perform reviews at the request of the Minister of Health, Welfare and Sport or on its own initiative; and to identify relevant developments in health care that pertain to the implementation of the WTG.
By means of so-called chambers, the Board has structural discussions with relevant parties. These chambers advise the Board on the development of policy guidelines. Chambers I, II and III advise on policy guidelines for various institutions; whereas chambers IV and V focus on independent professionals. Besides health insurers, the most important organizations for institutions and individual professionals are represented in these chambers.
Guidelines are the backbone of health care tariff policy in the Netherlands. The Board sets the guidelines, which are then approved by the health minister. Based on these guidelines, budgets can be drawn up and, in turn, tariffs set.
Medicines Evaluation Board (College ter Beoordeling van Genees- middelen, CBG/MEB). The Netherlands has a stringent programme for the evaluation and regulation of pharmaceuticals, including biological substances and vaccines. The responsibility for registration belongs to the Medicines Evaluation Board, which registers drugs on the basis of safety and efficacy (but not cost–effectiveness or societal need). All pharmaceutical products are subject to registration, and the Board generally requires evidence of safety and efficacy (from clinical trials) for new products. The Board has independent authority to grant, refuse, or revoke marketing licences.
The Medicines Evaluation Board Agency, under the supervision of the Ministry of Health, Welfare and Sport, supports the Medicines Evaluation Board and is responsible for preparing and implementing decisions made by the Board.
European Union rules now partially supersede this regulatory programme. Since 1978, new pharmaceuticals already approved elsewhere can be imported under a simplified procedure (parallel imports). More recently, a European pharmaceutical regulatory office, called the European Medicines Evaluation Agency, has been set up in London.
Traditionally, approval of a pharmaceutical product by the Dutch Board led to almost automatic reimbursement by the health insurance agencies. Listing of pharmaceuticals for reimbursement, however, is becoming less automatic, as
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a growing number of pharmaceuticals is being assessed for effectiveness (see section on Pharmaceuticals).
Netherlands Board for Hospital Facilities (NBHF) (College Bouw Ziekenhuis-voorzieningen). This Board was created after some drastic changes in the health care advisory structure and legislation in 1999. The responsibilities of the Board are regulated by the Hospital Provision Act (WZV), and its main task is to advise the Minster of Health, Welfare and Sport and the provinces on hospital planning policy. It also advises on individual requests from hospitals for licences. One of its most important responsibilities is to monitor infrastructure developments in health care.
National Institute for Public Health and the Environment (Rijksinstituut voor de Volksgezondheid en Milieuhygiëne, RIVM). The RIVM is an independent agency, operating as a one of the main advisors to several Dutch ministries. It advises two ministries on environmental issues and provides policy support to the Ministry of Health, Welfare and Sports (VWS) in several key public health areas. Firstly, it is the central institute for infectious disease surveillance and control, including the quality control of the Dutch national vaccination programme. Secondly, the RIVM operates in various health risk areas, such as integrated assessment of food quality and consumer safety. It has a key role in the regulatory chain for the introduction of new pharmaceuticals on the Dutch market. Finally, the public health branch of the RIVM publishes, every fourth year, a national health report, called the ‘Public Health Status and Forecasts’.
Health Care Inspectorate (IGZ). This Inspectorate supervises the quality and accessibility of health care and is autonomous, which means that it is independent of the Ministry of Health, Welfare and Sport. Among other things, it enforces statutory regulations that relate to public health, investigates complaints and calamities in health care and takes appropriate measures (if necessary), and advises the Minister of Health, Welfare and Sport. It is subdivided into three sub-inspectorates: one for preventive and curative health care, one for mental health care, and one for pharmacy and medical technology. The Inspectorate has a headquarters and seven regional offices. An inspector is empowered to submit a complaint about a physician to the Medical Disciplinary Board at any time.
Selected private organizations
Royal Dutch Medical Association (Koninklijke Nederlandsche Maatschappij ter bevordering van de Geneeskunst, KNMG). This Association is a private organization set up in 1849 to represent doctors in the Netherlands. The objective
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of the Royal Dutch Medical Association is “to promote medicine in its broadest sense”. Four main professional groups work within the Association; these are the Dutch Association of Medical Specialists (Orde van Medisch Specialisten, OMS), the Dutch National Association of General Practitioners (Landelijke Huisartsen Vereniging, LHV), the National Organization of Salaried Doctors (Landelijke vereninging van Artsen in Dienstverband, LAD) and the Dutch Society of Social Medicine (Landelijke vereniging van Sociaal Geneeskundigen, LvSG). The individual tasks of these organizations are specifically oriented to protect the interests of a certain group of doctors.
Dutch Federation of Patients and Consumers (Nederlandse Patiënten/ Consumenten Federatie, NP/CF). This Federation was founded in 1992 and includes over 45 patient and consumer organizations; it distributes information on health issues to the public. It also runs a telephone service for general information, a library, and an information centre. It publishes its own journal, Kwartaaluitgave, which comments (from a consumer point of view) on relevant issues in health care. Also, in the information field, some of the leading national newspapers now have regular sections on medical science and health care issues; they strongly emphasize well-informed and responsible journalism.
Consumer involvement has been strengthened by increased consumer representation. The Dutch Federation of Patients and Consumers is promoting the interests of health care consumers by having representatives on national advisory bodies, such as the Health Care Insurance Board (CVZ) and the Council for Public Health and Health Care.
Dutch Institute for Health Care Improvement (Centraal begeleidingsorgaan voor intercollegiale toetsing, CBO). Established in 1979 as an independent foundation by the Dutch Association of Medical Specialists and the Dutch Association of Medical Directors of Hospitals (Nederlandse Vereniging van Ziekenhuisdirecteuren, NVZD), the Dutch Institute for Health Care Improvement has been active in quality assurance. The institute has four major customer groups: medical specialists, nurses, allied health professionals and health care institutions. Its programmes and products aid these customer groups in improving patient care. These programmes and products include the development of guidelines and indicators, visitation systems, a national registry of quality indicators, improvement models, process redesign, total quality management, implementation of existing knowledge and dissemination of best practices, educational and training programmes, and advice for health care organizations and national organizations of professionals. On the subject of quality assurance, the Institute is considered to be one of the most expert organizations in Europe.
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Judiciary
The Judiciary in the Netherlands is independent. Judges are appointed by the government for life by Royal Decree. The idea of separation of powers is most clearly expressed in the administration of justice. In principle, the Constitution assigns judicial power exclusively to an independent judiciary, which includes the ordinary judiciary (concerned with civil and criminal law) and a number of specific administrative courts. An exception to this principle is the delegation of certain forms of public conciliation to government institutions (Article 112, Subsection 2). Under Article 120 of the Constitution, the courts cannot rule on the constitutionality of Acts of Parliament (wetten) and treaties. Interpretation of the Constitution is the province of the legislature. In fact, The Dutch Constitution plays a relatively modest role in making (constitutional) laws in the Netherlands. This explains the absence of constitutional case law, except for the review of other statutes and by-laws.
Article 107 of the Constitution makes a clear distinction between civil law, criminal law and procedures on the one hand and administrative law on the other. According to the Constitution, disputes that do not concern relations specified under civil law can be judged by either of the court systems, but – and this is important – the type of case that falls under each system is laid down by Acts of Parliament.
In the Netherlands, the civil courts’ right to judge health issues is based on a general provision contained in Article 112, Subsection 1 of the Constitution, which states that “the judgement of disputes on civil rights and obligations shall be the responsibility of the judiciary”. In addition, under Article 112, Subsection 2 of the Constitution, administrative courts are provided to give citizens legal protection with regard to specific issues. The statutes for administrative courts dealing with health issues are contained in the Sickness Fund Act (ZFW) and the Exceptional Medical Expenses Act (AWBZ). Finally, Article 115 of the Constitution includes provisions for administrative appeal bodies.
Planning, regulation and management
Under Section 81 of the Constitution, the power to make Acts of Parliament is assigned to the government and the States General, acting jointly. The initiative may come from the government or from one or more members of the Second Chamber (such as Member of Parliament Van Otterloo).
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Usually one of the ministries (on the orders of the minister) proposes a bill. The bill is then recorded and its various articles are explained in an explanatory memorandum. First, the bill is presented for criticism to the Cabinet Council; then, it is presented for advice to the Council of State. Together with the Council of State’s advice, the bill is sent for parliamentary debate to the Second Chamber. When the Second Chamber has passed the bill, it is sent to the First Chamber for further discussion, which is preceded by a written preparation, as in the Second Chamber. The bill is discussed as it stands, as the First Chamber has no right to amend it. After final approval by the two chambers, the bill is sent to the King/Queen for judgement and approval. In view of the ministerial responsibility, the bill is co-signed by the Minister(s), which is called contra- seign (countersign). The Minister of Justice finally proclaims the Act in the Staatsblad (Official journal of the state, Bulletin of acts and decrees).
The government has ultimate control over the planning of care facilities, the pricing of provisions, and the macroeconomics of health care expenditures. In the 1960s and 1970s, the expansion of health technology and care resulted in a steady increase in health care costs. The Dutch government attributed the main cause of rising costs to the construction of new hospitals and health care institutions.
The Netherlands also has “rule-making” by offices other than parliament, or by parliament and the government together. Delegated rules issued by the government or by a minister are very common. Those issued by the government are usually called Orders in Council or Implementation Regulation (algemene maatregel van bestuur); those issued by a minister are called ministerial rules (ministeriële regelingen). Policy rules (beleidsregels), sometimes called pseudo-legislation, are a special phenomenon. These rules are laid down by an administrative body as a form of self-regulation over the exercise of its administrative powers. Policy rules, therefore, can be delegated, for example, to the Board for Health Care Tariffs (CTG), to the Health Care Inspectorate and to other bodies.
Hospital planning
The Hospital Provision Act (WZV) of 1971 became the government’s most important planning tool. The law enables the government to regulate all construction of hospitals and health care institutions and makes the provincial health authorities responsible for implementing this plan.
The Act aims to control the supply of hospitals care, as broadly defined. It also aims to promote efficiency in hospital care. Hospitals may not be constructed or renovated – wholly or partially – without successfully completing
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a declaration and licensing process. Project approval is based on a detailed plan for each hospital service affected in a specific geographic area. This includes a description of the existing service capacity, the proposed change of capacity, and a schedule for completing the project.
The formal planning process starts with the issuance of an “instruction” from the Minister of Health, Welfare and Sport to the provincial government. The instruction specifies the categories of hospital facilities for which plans must be developed, the geographical region covered, and the deadline for completing this task. In formulating the plan, provincial governments take into account a number of regulations and guidelines; regulations relate to the planning process itself, and guidelines to the content of the plan. Regulations require the participation of hospitals, patients and consumer organizations, local authorities, and insurance companies in the provincial planning process.
The provincial government initially prepares a draft plan, including such aspects as:
• an inventory of existing capacities
• an evaluation of the existing situation in terms of shortages and weaknesses
• a description of construction, renovation and expansion proposals
• an implementation plan and timetable.
The draft is then submitted to the health minister for approval. The health minister, after receiving advice from the Hospital Provision Board (CBZ), determines whether the draft plan is acceptable. The plan forms the basis for the issuance of so-called acknowledgements. This allows planned hospitals to receive reimbursement for services from health insurers. If a particular hospital is not included in the approved plan, it must close.
The hospital planning process under the Hospital Provision Act (WZV) was criticized for its complexity and lack of flexibility. In January 2000, in order to improve the planning process, a new Act, the Special Medical Procedures Act (WBMZ), came into force. The Act should guarantee a more flexible and effective approach to hospital planning, and it was evaluated in 2001.
Accreditation of institutions
Most institutions that provide services under the Sickness Fund Act (ZFW) must be approved by the Minister of Health, Welfare and Sport. Most hospitals and other institutions need recognition under the Exceptional Medical Expenses Act (AWBZ) in order to provide the treatment and services financed under the auspices of the Act. The Minister of Health, Welfare and Sport
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following consultation with the Health Care Insurance Board (CVZ) grants such recognition. In addition, there must be an established need for the kind of services the institution in question is offering, and these services must be compatible with the appropriate, geographical, provisional services. To obtain the care to which they are entitled under the AWBZ, people insured under the Act must apply to the health practitioner or institution of their choice, with whom or with which the insurer has a contract.
Quality assurance
In a letter to the parliament on 4 December 2002, the Minister of Health proclaimed the necessity that healthcare institutions should take rigorous action to implement a structured and programmed quality system to systematically measure, improve/redesign and control the quality of patient care. This is in accordance with the Healthcare Quality Law for Healthcare Institutions of 1996.
Evaluation of this law showed that little progress was made towards implementation of a structured quality system by healthcare institutions. The initiative for the change in focus of the government’s quality policy (from supporting health care institutions in building up their quality systems, to commanding and controlling progress in this processes) came from the Minister of Health. Following the recommendations of the Health Care Quality Law evaluation in late 2002, the Minister of Health announced specific measures to make quality management compulsory.
In November 2003, the Minister of Health published a catalogue of kick-off measures (Sneller Beter) to be introduced in 2004:
• Benchmarking in primary care for all GPs and ten pilot hospitals
• Introduction of indicators for safer and better care
• Program on quality, innovation and efficiency with priority on patient safety and patient-centered delivery of care.
The Dutch Inspectorate of Health Care will supervise performance with the help of two research institutes. Potential penalties have yet to be defined.
Certification of health professionals
The government regulates physicians and nurses. A new system for enhancing professional standards and quality control in health care, laid out in the Individual Health Care Professions Act of 1993 (Wet op de Beroepen in de Individuele Gezondheidszorg, BIG; see the chapter on Human Resources), is
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now being introduced. This will lead to certification and registration of nurses and physicians, a description of restricted medical activity (that is, restricted to qualified physicians only), and reform of the professional disciplinary law. The number of physicians is regulated in two ways: (1) enrolment in basic medical training is limited by a central government quota at medical schools; (2) professional specialist organizations regulate access to specialized education.
The system of contracts between sickness funds and care providers
The Sickness Fund Act (ZFW) and the Exceptional Medical Expenses Act (AWBZ) have provisions for systems of benefits-in-kind (while AWBZ also provides for cash benefits). In this context, the sickness funds (or health insurers or health care offices they designate in AWBZ) enter into contracts. These fall into two categories, those with institutional providers (such as hospitals) and those with individual providers (such as GPs and specialists). While it is mandatory for the sickness funds to enter into contracts with all accredited institutions, they are – since 1 January 1992 – no longer obliged to enter into contracts with all the individual providers.
Under the Sickness Fund Act (ZFW), health care institutions and individual medical practitioners are paid directly by the funds without any financial involvement on the part of the patient (except in the case of services for which a charge is levied). Under the Exceptional Medical Expenses Act (AWBZ), the insurers (or the health care offices they designate) enter into contracts with care providers under which the latter undertake to provide, and the insurers to fund, health and medical services at set rates and on set terms. Under the Act, the insurers are prohibited from employing personnel that would provide such services themselves, other than in special cases and with the approval of the Health Care Insurance Board (CVZ).
Before a contract between individual parties can be entered into, there first has to be national consultation between the representative organizations of health insurers and health care providers. If the consultation process is successful, a document known as the “consultation outcome” is drawn up, which then has to be approved by the Health Care Insurance Board (CVZ). If the parties cannot work anything out, the CVZ draws up a “model contract”. Under the terms of the Sickness Fund Act (ZFW) and the Exceptional Medical Expenses Act (AWBZ), the consultation outcome or model contract must contain certain elements. Any other agreements – for example, concerning fees charged – are set down in the individual contracts with health care providers.
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Fees are subject to approval by the Board for Health Care Tariffs (CTG) under the terms of the Health Care Tariffs Act (WTG). As of 1 January 1992, independent medical practitioners and equivalent organizations, such as doctors’ partnerships, are subject to a system of maximum fees under which it is possible to charge fees lower than those set or approved by the CTG. Contracts are then determined (other than laying out the matter of fees) by negotiations (based on the consultation outcomes or model contracts) between the representative organizations. The Health Care Insurance Board (CVZ) must then approve them.
Supervision
Under the Sickness Fund Act (ZFW) the task of ensuring that sickness funds carry out their management and administrative duties in a proper manner is entrusted to the Health Care Insurance Board (CVZ), whose other statutory duties include advising the government on matters relating to health insurance. The Board is assisted by a secretariat headed by a general secretary, who is appointed (as is the rest of the secretariat’s staff) by the Board.
The Board is accountable to the Minister of Health, Welfare and Sport, to whom it reports annually on its work. The health minister may issue policy rules on how the Board should perform its duties; he/she may also influence its work by exercising their power to reverse its decisions.
The Board’s operating costs are met from the Central Fund (Centrale Kas) established by the Sickness Fund Act (different from the Exceptional Medical Expenses Act Fund, which it also manages). The operating costs are partly covered by the Sickness Fund Act (ZFW) Fund and the Exceptional Medical Expenses Act (AWBZ) Fund. The division is based on the time the Board spends on the different acts. For 2000, the percentages were 63% (ZFW) and 37% (AWBZ). Responsibility for ensuring that it does so in a proper manner rests with the health minister. The Board holds the financial resources of the Central Fund in a current account in the name of the Minister of Finance. Central Fund resources are not only used to cover the costs of sickness fund insurance, but are also used in connection with research and publications that relate to health care, and part is used to form a reserve.
The role of the Supervisory Board for Health Care Insurance (CTZ) is to supervise the implementation by the executive agencies of the Sickness Fund Act (ZFW) and the Exceptional Medical Expenses Act (AWBZ). The executive agencies are obliged to report periodically to the Supervisory Board for Health Care Insurance.
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Appeals
Under the Sickness Fund Act (ZFW), appeals of decisions made by a sickness fund can be made in various ways. A distinction, however, must be made here between complaints relating to treatment, disputes about registration or contributions, and disputes concerning entitlement to benefits in kind (or to an equivalent payment) under the ZFW. A more or less similar distinction among types of complaints can be found under the Exceptional Medical Expenses Act (AWBZ): In such appeals, a distinction must be made between disputes relating to how bodies that implement the Act treat insured people (or whether the latter are insured under the Act) and disputes concerning entitlement to benefits in kind (or to an equivalent payment under the Act). Under both acts, the most important type of complaint involves disputes over entitlement to benefits.
Different arrangements apply to disputes relating to entitlement to benefits in kind or to an equivalent payment. The insured must submit a formal objection in writing to the sickness fund (or relevant implementing body in the case of the Exceptional Medical Expenses Act). Before considering the objection, the sickness fund (or the relevant Exceptional Medical Expenses Act body) must first seek the advice of the Health Care Insurance Board (CVZ). After obtaining the advice and sending a copy of it to the insured, the sickness fund issues a decision on the objection. If the insured does not agree with the decision, he/she can bring an appeal to the administrative law section of the district court. As supplementary insurance is private insurance, insured people can bring disputes before a civil court.
Under the Health Insurance Access Act (WTZ), private health insurers operating in the Netherlands, with the exception of those exempted from the obligation to offer standard cover, run the standard policy scheme. Implementation of the apportionment scheme is the responsibility of the WTZ Apportionment Scheme Implementation Council.
The job of supervising the private medical insurance sector is entrusted to the Pensions and Insurance Supervisory Authority (Pensioen- en Verzekeringskamer, PVK), a body established under the 1993 Insurance Business Supervision Act (Wet Toezicht Verzekeringsbedrijf, WTV). This supervisory function is limited to monitoring compliance with the requirements that aim to ensure the solvency of insurers and does not, however, extend to the application of the standard policy scheme in individual cases. This is the responsibility of the Minister of Health, Welfare and Sport, whose job it is to ensure that the legislation is properly implemented. Together with the Minister for Economic Affairs and the Minister of Finance, the Minister of Health, Welfare and Sport also monitors trends in the level of premiums of standard policies.
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Disputes regarding implementation of the standard policy scheme may be taken before the civil courts. All disputes regarding standard cover may be submitted to the Health Insurance Access Act (WTZ) Appeals Committee. A small sum must be paid before the committee will consider an appeal. If the Committee deems the complaint to be well founded, this sum is then refunded. The Committee’s decisions are binding.
Decentralization of the health care system
In the Netherlands, policy traditionally has been prepared and implemented by a massive neocorporate bureaucracy, bringing together government agencies, quasi-governmental organizations (the advisory and executive agencies), the private national organizations of suppliers and providers, and the insurers. This national bureaucracy has developed a grip on the number and distribution of hospital beds and specialist places, and on investment decisions and management costs in health care.
In the 1970s, the concept of centralized government coordination and planning became the leading principle (and model) in health care. The 1974 policy paper Structuring health care (Structuurnota Gezondheidszorg) (8), however, departed from this concept and contained proposals for decentralized administration by regional and local authorities. In the centralized coordination and planning model, the government would maintain a strong and central steering role. Legislation would then have to be passed to regulate the planning of health care facilities and the tariffs of health care services.
Departing from this model of centralized steering, the 1986 coalition government started major reforms – mainly in the field of social health insurance. The integration of different insurance schemes into one social insurance for all (with largely income-related contributions) was widely and seriously debated; this debate aimed to strengthen solidarity in financing. Under these reforms, all insurers would operate as independent and risk-bearing insurers and compete for the insured under the same regulations. One central fund (centrale kas) would provide budgets for all the insurers. While these proposed reforms have been broadly discussed (but yet to be implemented), a crucial element of them was the shift of the insurance risk from the public funding system towards the individual insurance plan. The credo of this shift was “less government, and more market”. More precisely, the shift of insurance risk involves a policy of transferring steering competencies from the collective sector to the private sector, such as the providers and insurance agencies. In the Netherlands, this policy
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of delegation is called “functional decentralization”; it has mainly occurred in the cure-sector – that is, acute care and both specialist and general medicine. Through negotiations and contracts, an increasing number of health insurers and providers have become more important participants in defining and interpreting health care, instead of the government and administrative agencies assuming these roles. This point is illustrated by the new role of medical specialists in hospital care; they have acquired an independent coordinating position vis- à-vis both hospital management and sickness funds. Local negotiations and the centralization of negotiating power are the ingredients of the changing power position of medical specialists. Likewise, a greater number of hospital managers take a more pragmatic attitude towards coming to terms with the medical staff than one might expect from the power-driven claims of their umbrella organizations (9).
Apart from the shift from government to private enterprise, the Dutch health care system faces devolution or “territorial decentralization” – that is, a transfer of competencies from the central government to provincial and local governments. In health care, territorial decentralization has occurred in care facilities. Territorial decentralization in steering care facilities includes shifts in financing (such as involvement in project subsidies and reimbursement from general revenues) and planning of care. In the field of planning, an important example is the increased influence of local and provincial governments at the expense of other actors. Among other things, this shift in powers has manifested itself in the use of municipal committees for needs assessment (gemeentelijke indicatiecommissies, GIC). Due to a scarcity of facilities, care must be rationed, which has resulted in establishing and using independent integral needs assessment committees for an increasing number of facilities and disorders. Here, local governments play a major role, given the increasing number of regional assessment bodies – established by (collaborative) local governments.
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Health care financing and expenditure
Systems of financing and coverage
Medical care in the Netherlands is largely funded by a system of public and private insurance schemes. Only about 12% of all health care funding is not covered by an insurance scheme (see section on Other
sources of finance). The insurance system is divided into three compartments, in accordance with the current method of classifying health care (Fig. 4).
The first compartment covers the exceptional medical expenses associated with long-term care or high-cost treatment, where the expense is such that it cannot be borne by individuals or adequately covered by private insurance. This compartment of care is covered under the Exceptional Medical Expenses Act (AWBZ). With a few exceptions, everyone living in the Netherlands (irrespective of nationality) and all non-residents employed in the Netherlands and subject to Dutch income tax are covered by the Act.
The second compartment covers normal, necessary medical care. The costs in this case are largely covered by sickness fund insurance, private medical insurance (including the standard cover provided for under the Health Insurance Access Act), or a health insurance scheme for public servants. Normal medical expenses are covered by a variety of insurance arrangements, the most important of which is that governed by the Sickness Fund Act (ZFW). People with an annual salary below a statutory ceiling (€ 32 600 in 2004) and all recipients of social security benefits are insured up to the age of 65 years under this Act.
Since 1 January 1998, people 65 years old and over who were insured under the Act before they turned 65 will continue to be insured in this way after they reach the age of 65. Their income is no longer a significant factor. This is known as the “stay where you are” principle. In principle, the same arrangement applies
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to the private sector. All people privately insured before they turn 65 continue to be insured under that scheme after they reach the age of 65. Only if taxable household income falls below €20 750, may the person concerned register with a sickness fund (“opting in”).
Almost 63% (2004) of the Dutch population are covered by the Sickness Fund Act (ZFW), which is about 1% more than in 1998. The health insurance schemes for the various categories of public servants cover around 5% of the total population.
For those covered neither by the Sickness Fund Act (ZFW) nor by the schemes for public servants, there is the option of cover from one of the many private-sector health insurance companies operating in the Netherlands. Approximately 30% of the population are privately insured for medical expenses in the second compartment, and 17% of these (about 4% of the total population) have standard cover under the Health Insurance Access Act (WTZ). In discussing private insurance, this report will mainly concentrate on this group.
Around 2% of the population are military personnel, prison inmates or uninsured.
The third compartment covers the supplementary forms of care regarded as being less necessary. The costs here are largely covered by private medical insurance. Supplementary insurance can be taken out to cover the costs of these kinds of care, which are not included in the first or second compartment. This is a voluntary health insurance scheme where the insurers – both sickness funds and private health insurers – themselves determine the content and scope of the package and the conditions under which this type of insurance can be taken out. They also fix the premiums. Possible examples of this kind of insurance include (supplementary) dental insurance and extensions of the insurance package to cover specific items, such as eyeglasses, a higher standard of hospital accommodation, and alternative medicines.
Fig. 4. Population coverage and expenditure in the health insurance system (approx. 2003)
Supplementary health insurance Third compartment (3% of health expenditure)
Sickness funds (63% of population)
Privatre health insurance (30% of population)
Second compartment (53% of health expenditure) National health insurance for exceptional medical expenses
(100% of population covered) First compartment (41% of health expenditure)
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Finance and coverage under the Exceptional Medical Expenses Act (AWBZ)
Insurance under the Exceptional Medical Expenses Act (AWBZ) is mandatory: everyone meeting the criteria set forth in the Act is insured – whether or not they want to make use of the treatment and services offered – and must pay the relevant contributions. There is one exception to this last requirement: people with a conscientious objection to the principle of insurance are exempted from contributing, paying instead an income tax surcharge in the same amount as the contribution. They are not excluded from the scheme and may make use of its benefits by registering with a sickness fund or recognized insurer when they require assistance.
Eligibility for coverage As a national insurance scheme, the Exceptional Medical Expenses Act (AWBZ) covers residents and non-residents, as follows:
1. Residents in the Netherlands. Whether or not someone is regarded as a resident is decided in light of the circumstances of each case (with Dutch-based ships and aircraft being considered part of the Netherlands for this purpose). Indeed, the courts have determined that under certain circumstances even people currently living abroad may be regarded as residents for the purposes of the Act, provided that their social and economic links make the Netherlands their home. On the other hand, a foreigner with a house in this country may not be considered a resident of the Netherlands for the purposes of the Act.
2. Non-residents. They are liable for Dutch wages and salaries in connection with employment in the Netherlands. This category covers mainly cross-border commuters and guest workers.
3. Non residents covered under the 1999 Decree regulating Admission to the National Insurance Schemes. This category includes, for example, retired people with national health insurance cover living outside the Netherlands and members of the families of active and post-active national health insurance fund members
The general rule is that everyone residing in the Netherlands is covered by the Exceptional Medical Expenses Act (AWBZ), regardless of nationality. There are exceptions to this rule in the form of both extensions of cover of non-residents and exclusions from cover of residents. This is set down in the 1999 Decree regulating Admittance to National Insurance Schemes (10).
Cover for children under the Exceptional Medical Expenses Act (AWBZ) is not linked to the coverage enjoyed by their parents (as under the Sickness
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Fund Act); instead, each case is assessed on its merits, and cover also depends on the child’s place of residence. Unlike other national insurance schemes, the AWBZ does not lay down any upper and lower age limits for cover.
Registration and administration Entitlement to services provided under the Exceptional Medical Expenses Act (AWBZ) depends on registration with one of the bodies that implement the Act. It was decided, however, not to opt for a system of individual registration (as under the Sickness Fund Act); instead, anyone covered by the AWBZ who is insured for normal risks by any health insurer is regarded as being registered with that insurer for the purposes of the Act. People covered by the Act who are not insured for normal risks may apply to any sickness fund or to a recognized insurer when they require assistance under the Act.
To be ensured of entitlement to services, insured people residing abroad must register with one of the bodies authorized to implement the Act in the Netherlands. Registration is governed by the same regulations as those applicable to residents.
Registration is based on the individual’s existing insurance