Managed competition
in health care:
An unfinished agenda
Ingeborg Been
Ernst van Koesveld
5 June 2015
Content
1. Original problems & policy reform
2. Managed competition
3. Results after 10 years…
4. SWOT-analysis
5. An unfinished agenda
Original problems
Supply-driven system: high level of government planning
Lack of consumer influence and consumer choice
Dichotomy public insurance and private insurance
Public insurance: lack of competition
Private insurance: risk selection
Insufficient cost awareness
Rising budgetary pressures
Results: waiting lists, unfairness, uneven playing field
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Cornerstones of health financing system 2006
Mandatory insurance and acceptance obligation
Ban on premium differentiation
Ex ante risk equalization system (risk-bearing insurers)
Nominal premiums and deductibles (income supplement)
Duty of insurers to arrange care (time/distance)
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Imperfect market conditions not fully eliminated
Information problems (consumers and insurers)
Moral hazard (consumers do not pay full price, entitlements)
Soft budget constraints producers (fee for service producers)
Risk selection (new policies, supplementary policies, marketing)
Competition issues (producers versus insurers)
Etc.
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Dutch model of “managed competition”
Central role of private insurers to buy health care
Consumers with voice and exit options
Heavy government regulation and supervision
Income support independent of use
Public-private system (best of both worlds?)
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Results
•
End of dichotomy of public and private insurance
•
Health indicators, performance indicators
•
Macro: cost containment
•
Micro: efficiency
•
Accessibility/solidarity
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8
Voettekst
Macro: curbing expenditures (less more…)
Net BKZ-expenses 2005 - 2014
80.000
75.000
70.000
2 billion
65.000
60.000
55.000
Trendlijn
50.000
Stand
jaarverslag
Netto BKZuitgaven
45.000
40.000
2005
9
2007
2009
2011
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Micro less….
Average administration cost per insured 18+,
Health insurance (BV) and supplemental insurance (AV)
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Micro less…
At minimum wage-level:
Social Health Insurance Act + co-payment
(2005) = 541 euro average
Health insurance act + co-payment
(2015) = 466 euro average
_____________________________________________________________
Difference
11
= -/- 75 euro
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Household out-of-pocket health expenditure as % of total health
ER NL % total exp. on health 2011
20
% total exp. on health 2011, OECD
15
10
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OECD
average
Japan
Canada
United States
United
Kingdom
Sweden
Netherlands
Germany
France
0
Belgium
5
Unexpected and unintended
- Transition takes time: patience
- Financial crisis: insurers part of the financial system
- Number of insurance policies grown strongly
- Cost containment > cap agreements and MBI needed
- Long term care reforms - collaboration with municipalities
-etc
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Average premium
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SWOT-analyse
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Best of both worlds
Availability and accessibility
Strenghts
Innovation
Cost containment
Efficient and effective
Solidarity
16
Lack of transparancy of quality and cost
Overkill of insurance policies
Administrative burdens
Weaknesses
Lack of process innovation
Sign at the dotted line
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Collaboration
Smart technology
Selfmanagement
To live longer,
with better quality of life
Opportunities
Customization and freedom
Agreements on quality and cost
18
8 mln people
chronically ill
High demands
Anxiety
Pressure on solidarity
Increasing demand for
(complex) health care
Threats
Expensive drugs and
treatment
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Voettekst
Medicalization
Who pays what for health insurence?
Gross income
Social security
Minimum wage
1 x modal
2 x modal
3 x modal
Gross income
14598
19253
32318
64636
96954
Nominal available
10913
15703
22324
38532
52961
Income related contribution
1.095
1.444
2.424
3.856
3.856
Nominal premium
1.101
1.101
1.101
1.101
1.101
Average co-payment
228
228
228
228
228
Health care allowance
-865
-865
0
0
0
Net premium
464
464
1.329
1.329
1.329
Taxes
354
484
759
1.438
2.093
Totaal including IRC
2.377
2.856
5.841
7.952
8.607
Percentage of gross income
16%
15%
18%
12%
9%
Unfinished agenda
- Budgetary pressures remain
- Risk equalization improvement
- Supervision on risk selection
- Supervision on competition
- Cost effectiveness and entitlements
- Transparency on contracting (quality)
- Quality of care!
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QUALITY
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CONTRACTING
QUALITY
KWALITEIT
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Stimulus for insured / patient :
• Reduction deductibles
• Influence on quality
CONTRACTING
QUALITY
KWALITEIT
Insured
public sector
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Stimulus insurers:
• adjustment ex ante risk equalization
• no ex post compensation
CONTRACTING
Insurers
QUALITY
KWALITEIT
public sector
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Health care supply
• MBI focused on noncontracted care
• Multi-year contracting
CONTRACTING
QUALITY
KWALITEIT
public sector
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General: promoting transparency of quality
And: foster quality of health care supply
QUALITY
KWALITEIT
public sector
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Health care provider
CONTRACTING
insurer
Quality
KWALITEIT
Public sector
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insured
Citizen
Health care provider
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Health care insurer
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Patient
Health care provider
30
Insured
Health care insurers
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Citizen
Health care provider
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Health care insurer
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Political economy of further improvements
- Legitimacy of private insurers?
- Public interest in the "system"?
- Who are promotors of the system?
- Pendulum: shifting towards public interventions
- Transition costs to alternative system are very high
- Timing is crucial (economic growth)!
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