The Dutch Version of Managed Competition
This is Ab Klink, the Dutch health minister, interviewed by Gardiner Harris in The New York Times:
In the Netherlands, everyone chooses from a list of 10 or so insurers who offer a standardized health plan that can be enriched with other options. Those who cannot afford the premiums are given subsidies… The government once set prices for nearly all medical services, but to inject some competition into the system, the government last year allowed prices to vary for about one-third of medical services. Next year that share will increase to half. I cannot tell you that Dutch hospitals are better than the Mayo Clinic or Johns Hopkins. Probably it’s the other way around… We would love the Mayo to open a hospital in the Netherlands.
I think this is the ideal for the Commonwealth Fund. It may be the most complete example of managed competition in the world.
Sounds like the Dutch have a quality problem.
As you have pointed out before, John, quality degredation is the Achilles heel of managed competition.
The Dutch have at least one major quality problem, a medical culture that sanctions the routine killing of patients. See http://www.weeklystandard.com/Content/Public/Articles/000/000/004/616jszlg.asp and http://www.opinionjournal.com/editorial/feature.html?id=95000390. The latter article, from 2001, points out that more than 10% of the elderly fear that their doctors will kill them. “Many” elderly are said to fear Dutch hospitals for the same reason.
The question for the health minister is: Why would Mayo want to go to the Netherlands? It would attract all the bad risks, paying only community rated premiums, and would quickly go bankrupt.
The Dutch like to believe they have the best health care system in the world. But, if the truth be known, they have good genes.
I think if we were to risk over-generalization, we might say that Dutch health care looks somewhat like Medicare Advantage. I’ve noted it before, but the Commonwealth Fund had a good paper on the Netherlands and Sweden recently (http://tinyurl.com/n9lcrz).
If I were to take a marginally pro-Dutch side of the discussion, I would say that it is good that they are getting out of the business of fixing prices of medical goods and services. Only 25% of American Medicare beneficiaries are in MA plans, which can contract with providers, so the Dutch system (for seniors at least) may soon approximate a more free market than U.S. Medicare.