sou · H0B333 · 2012-05-15 00:00:00 — Yet, the autonomy of the regions has made it difficult for the central government to steer towards more uniform levels of quality, volumes of care and health care funding. The empowerment of the regions was accompanied with the sepa- ration of responsibilities for health care funding from spending powers. This has caused continued disputes between the central government and the regions. Whilst the national government deter- mines the scope and depth of the basic benefit package and (re) allocates funds to the regions, the regions are responsible for en- suring that their financial resources are sufficient to provide the standard package. However, funding from the national government favour regions with a strong industrial and income base, leaving less economically productive regions with difficulties to cover the basic benefit catalogue. These thus have experienced higher risks of budget overspendings or failed to deliver on the basic benefit package sometimes requiring them to levy additional taxes with negative consequences for business location. In addition, some regions levied additional co-payments, which increased regressivity of some regional fiscal regimes. Overall northern regions have tended to better balance their health expenditure accounts than southern regions. Besides the funding divide there are substantial differences between the facilities in the north and south concerning the volume and quality of health services provided, that might have been exacer- bated through the funding divide and led to substantial increases in cross regional patient flows in particular amongst patients seeking complex care in tertiary care hospitals in the past decade (Lo Scalzo et al. Patient satisfaction with hospital services has not fundamentally changed. The high level of devolution of governance responsibilities in and centralization of decision making by regional health depart- ments goes in hand with large differences in expenditures, care availability, access, satisfaction and quality of health care services amongst regions and leads to substantial patient flows. These re- quire cross-regional or national approaches but the willingness for inter-regional collaboration has been very limited so far. There seem to be two possible options for the way ahead: first towards tightening national governance such as for instance through rationing and services exclusion, or new fiscal equalization and transfer mechanisms; or incentives for regional alignments. And second towards further strengthening regional governance arrangements through strengthening inter-regional collaboration such as on health services, human resources, or high technology planning; and inter- regional benchmarking. The recent trend towards a more central level control of regional health care expenditures through regional recovery plans seems to indicate in the former direction. data show some cost control effects in 2011. These effects in light of the national deficit budget and the financial crisis might substan- tiate further efforts to align regional financial performance such as setting reimbursement rates nationally in orientation on the finan- cially best performing regions, yet, this also revitalizes the on-going debate about the level of compensation for the economically dis- advantaged regions. Governance model and recent changes The Dutch health system governance structure has moved from a traditional compulsory social health insurance model and private substitutionary insurance for high-income families with strong central level governance function towards a system of competing insurers with a mandatory basic benefit package offered to the whole population (, 2011). The reform led to fundamental changes in the roles of government, patients, providers and in- surers. The States role has shifted from directly steering the system towards one that regulates and oversees competition and safeguards standards in care. The system was progressively implemented over the past 20 years with considerable political consensus across diffe- rent governments and culminated in new health insurance legisla- tion in 2006. The system is characterized by competitive environ- ment for both insurers and providers but insurers are the principle winners of the reform as they have substantially increased their potential role in driving care. Although the reform has also affected choices of consumers such as on their supplementary insurance arrangements, they have not yet substantially changed their consumer behaviour. The emphasis on new market conditions has also brought forth new requirements for regulating this market. tions at arm length from government have the most important regulatory role for the functioning of the Dutch health care market. The Dutch Health Care Authority controls activities and costs and ensures the functioning of the insurance market by setting pay- ment rates, imposing obligations on dominant actors with substan- tial market shares in both the insurer and provider markets, and by ensuring transparency of the markets to patients and payers. The Health Care Inspectorate is the national institution responsible for setting out minimum standards for the quality of care and per- forms institutional accreditation as a contractual precondition for providers to enter and maintain in the insurance market. The Authority ensures fair competition between insurers and between providers on the basis of the Act of 1998. And advises the govern- ment on coverage decisions in the basic benefit package of the com- pulsory minimal scheme on the basis of evidence on the cost effec- tiveness of interventions. In addition, a number of intermediate agents – for instance employer who obtain group contracts for their employees – have an impact on the governance roles and relationships between the different actors and the direction in which the current market model will evolve. Policy priorities and tensions amongst different objectives Many of the objectives around improving efficiency, consumer choice and patient quality and safety are consistent with a liberal governmental agenda, which the Liberals and the Conservatives in the current government support alike and so does the Freedom Party, which the current minority government relies on when wanting to adopt legislation in Parliament. One of the fundamental objectives of the 2006 reform was furthermore to slow down the trend in rising health care expendi- tures. There is a ceiling for public health care expenditure (floating around of GDP). The insurance market was designed on the assumption that consumers would select their insurers on the basis of the insurance premiums in combination with potential addi- tional flat fees, the scope of supplementary insurance services pro- vided and the nature of the contracted providers. The assumption was that this in turn would translate into pressures on insurers to ensure that providers deliver efficient services at lower costs so that this would eventually lead to lowering health care expenditures in total. The decision to transfer responsibility to fund and manage long term care services from the national to the local level is also grounded in expectations that this will free up increasing pressures off the national health care budget. In reality, the reform has created a tension between different policy objectives: competition might have increased institutional efficiency of individual insurers on the one hand but this has not translated into measurable cost savings at system level on the other hand: for instance, the introduction of case based payment schemes in the absence of volume caps has led to an overall increase in the volume of services and this has accelerated a substantial growth of health care expenditure as a share of GDP – an effect that had been underestimated with the introduction of the reform. Rival objec- tives may have also triggered some institutional tensions between the Health Care Inspectorate, the Health Care Authority and the Competition Authority. The former has argued in favour of the concentration of regulatory power to stipulate enhanced quality of care, which is opposed by the Competition Authority and the Health Care Authority suggesting that this might work against competition. Another tension that is difficult to disentangle is related to the wish to have less bureaucracy on one hand and more liberal admi- nistration of the market actors on the other hand, which seems to conflict with the need to closely regulate, control and inspect fair- ness condition of the market and monitor the effect of market im- perfections on the other hand. The Dutch health system in transition profile describes three emerging markets through the 2006 reform: one is the insurer market whereby patients choose their insurance company and insurance companies in return have the obligation to offer a basic insurance package to their members and to any person applying for insurance. In this way insurers play a double agency role, one as agent of their members in providing individual insurance plans, and another as agent of the government in offering a nationally guaran- teed basic package of benefits and coverage entitlements. A second market is the purchasing market in which insurers can to some extent negotiate with providers volumes, prices and qua- lity of services. A typical tool of this segment is selective con- tracting. Selective contracting however has been only gradually in- troduced since negotiation on prices and quality is still fairly regu- lated and free negotiations applies only to a very limited number of services (et al. Selective contracts are unpopular amongst consumers as they constrain their choices on providers and insurers have thus not made excessive use of them. A risk equa- lization scheme was introduced as a tool to tackle demand and supply side differences in health insurers expenditures. For instance, insurers in bear higher costs due to a higher number of drug addicts and a more highly specialised provider portfolio com- pared to more remote areas of the where utilization of health care services is substantially lower. A third market is the provider market whereby providers offer services to patients on competitive grounds. Tools supporting in- surance and provider choices of patients are mostly associated to information. For instance, the regularly pub- lishes information on quality of care including survey information on patient experiences, prices and waiting lists. Providers compete for contracts with insurers through attractive care arrangements, and for patients on the basis of quality standards, competence and reputation, geographic accessibility and comfort factors. Responsibility for special types of homecare – mainly long term care for the elderly, the disabled population, and patients with chronic diseases requiring long term care – was delegated to the municipalities in 2007 through the Social Support Act ( This has increased the municipalities role in governing long term care. Most long-term care is covered through income dependent contributions and regulated by the Expenses Act (AZBW). In future, funding and administration of the AZBW scheme will be handled over to the jurisdiction of municipalities and formal legal rights to long term insurance will be removed. Another related development constitutes Patient (PBB). Patients can choose between two options, to manage their own long-term care supplies through a personal budget or to opt for benefits in kind. PBB make up a growing share in long term care arrangements, which may well impact governance and market arrangements in the longer run. Municipalities are free to organize the services under the Social Support Act as required. palities have created special information and entry facilities to im- plement the requirements of the Social Support Act. This has led to considerable variations in practice. Purchasing of long term inpatient care is part of the responsibility of health insurers but these have delegated this task to special care offices. Priority setting and rationing takes place in the pharmaceutical sector through that is responsible for assessing and ensuring the efficacy, safety and quality of medi- cinal products for market approval and reimbursement. In terms of insurance coverage decisions for interventions the govern- ment relies on the advice through . The proposals from the Ministry on changes of the basic benefit package have to be approved by Parliament. Decisions are guided by the so-called Dunning Funnel, which defines four criteria (services have to be medically necessary or essential; effective; cost-effective; and not affordable for individual citizens). Overall, the government has been trying to cut back more rigorously on entitlements in the basic insurance package. How- ever, these decisions are unpopular in nature and the political scope is thus very small and somewhat focused on preventative interven- tions applying to a small segment of the population such as for instance medically assisted smoking cessation that has recently become subject to a new co-payment. Reform implementation, flaws and early impacts The 2006 reform was implemented as planned with relatively minor resistance and smooth alignment of the national institutions and compliance of providers and insurers. This was possibly partly due to the implementation of a longer-term vision and strategy, and partly as the government relied on existing institutions in imple- menting the reform. In anticipation of the reform and somewhat driven by scale economics, there were already some trends towards the merger of institutions to create larger organizations. For in- stance, even prior to 2000, private and social health insurers merged into larger corporations to strengthen competitiveness and to be- come more powerful negotiators in the system (2000). As a result, the number of insurance companies decreased from 118 in 1990 to 32 in 2008 (2010). Mergers have also driven provider structures as hospitals are moving towards larger orga- nizational units with integrated multidisciplinary health professional teams who do not only offer specialist care but also increasingly integrate primary care physicians and teams. General can opt out of hospital organizations to work in policlinics but they, too, will be exposed to the need to organize in larger corpo- rations, which effectively means that single handled practices have disappeared. Mergers of provider organizations have in part followed pressures on the financial position of health care providers, who have increasingly had to bear liability for capital costs and have experienced higher financial risks indicating an effect of the more competitive requirements faced by providers. Quality concerns have also been a factor leading to a higher concentration of services in hospitals, in trying to ensure that volumes are high enough for the hospital to meet certain minimum standards. The progressive upscale of provider organizations is beginning to have a toll on the functioning of the market, since some organizations have started to take on monopoly positions such as for instance in the case of a large provider organization in Zealand that has disputed the Com- petition Authority on its plan to intervene to stop further mergers. The government has recently overruled this intervention, arguing that an improvement of health service capacity through mergers takes priority over market considerations. This case exemplifies a fundamental challenge between market rules and the optimization of services capacities and infrastructures in the reformed gover- nance arrangements in the Dutch health care market. An underestimated effect of the reform has been the emergence of collective or group contracts between insurers and employees or special interest groups. Employers have emerged as intermediate agents between their employees and the health insurance compa- nies. It has been attractive to insurers to turn to employers who would ensure membership of a whole group of employees usually with relatively good health risks. Insurers in turn have offered group contracts with up to a premium discount. In 2011, around of the insured are member of a group contract. Collective contracting may have constrained free choice of patients on their insurers. This is also supported by the observation that the number of persons changing insurers reduced from initially in 2006 to in 2008 (2010). From 2008 to 2011, the proportion of changers has been around per year, these are often younger people and thus low number suggests that the incentives for changers are not very strong as the merits from switching insurers are rela- tively limited as price variation between insurers is not very sub- stantial and switching insurers is seen as a time consuming process. There is some indication that the uptake of entrepreneurial behaviour amongst the insurers is slower than anticipated. For instance, although since 2006 all insurers operate under private law and allowed to make profits and pay dividends to shareholders, the majority of them still operate under non-for-profit conditions (, 2010). This indicates that insurers are not yet completely fit for their new role. Since 2006, insurers have had to frequently upwards adjust their premium levels, which are controlled by the government in the compulsory acute care insurance segment, by levying additional flat fees. This may have contributed to an in- creasing number of people who cannot afford to pay their pre- miums, which currently applies to about 300.000 people. Expenditures have been affected in different ways. A higher public share (in 2007 compared to in 2005) can be explained by the abolishment of the substitutionary private health insurance since the entire population is now required to take out publicly financed health insurance (2010). Growth in hospital expenditures are estimated to amount to between 2005 and 2007, mainly due to the introduction of a diagnosis related pay- ment scheme as tariffs were set too high. Expenditure increase for GP care was estimated at in 2006, owing to a combination of a change of payment system and an increase in the volume of care. There are also signs that providers experienced a profitable de- crease due to the reform in 2006, and that a lack of solvency exacerbates providers financial risks, which may well have to do with the more contestable environment for hospital performance. Insurers also in general suffered a loss on basic and on complemen- tary insurance partly owing to the efforts to minimize premiums with the expectations of massive changes of consumers between insurers. There have also been some financial uncertainties of in- surers due to additional changes introduced in 2008, such as the coverage extension of the basic benefit package towards mental health, and an increase of the freely negotiable services. Overall, competition has put considerable pressures on the profit of insurers. The governance arrangements in the Dutch health care system today are the result of a longer term strategy towards introducing managed competition in the health insurance and the provider markets with consistency over different governments of distinct political composition. The 2006 reform has fundamentally changed the governance role of the health system actors. It has essentially diminished the role of the central government in steering the system and has put the health insurance companies in the driving seat for acute hospital and primary care and shifted responsibilities for long-term care to the local level. Challenges have been increasing variations in quality of care indicators between the different providers. As a response to this variation, a national quality institute is currently established to integrate knowledge and issue best practice guidelines. Long-term care is currently still financed out of the former AZBW scheme but there are plans afoot to transfer negotiation of contracts with providers over the provision of long-term care from the regional agencies to the health insurers. Whether these contracts will be accompanied with financial risks or not is not yet decided. Another modification afoot is the roll back of the risk equali- zation scheme between insurers. Yet, overall the government seems determined to continue along the lines of managed competition. Governance model and recent changes has been one of the Nordic health care models with traditionally a heavy focus on subnational governance structures, mostly publicly owned integrated health care providers and a strong focus on equity (, 2011). Specialist health care had been the responsibility of the counties up to 2002, whilst pri- mary care and long term care is the responsibility of the 430 muni- cipalities. The 2002 responsibility and leadership reform substan- tially changed the governance arrangements for specialist care (, 2011). Until 2002, the 19 counties were responsible for managing specialist care and running hospitals and covering expenses out of unconditional block grants. Highly specialist health care was coordinated at the level of 5 regions, so that each region had a university or teaching level hospital. In 2002, hospital owner- ship was taken over by the state and administered through five regional health authorities, which were organized as trusts and governed by an appointed board of professional trustees. Regional health authorities were also empowered to undertake capital invest- ments in hospitals as part of their regional budgets allocated to them by the national government. Policy priorities and debates The 2002 reform was preceded by a number of problems in coordi- nating care with duplications of services at county and regional levels, budget deficits of the less affluent counties, and major geo- graphical variations in access to care and utilization of services (, 2011). Thus, one important policy objective of the 2002 reform was to improve geographical access to care and equity in utilization. to the multiple responsibilities of counties, health care was sometimes prioritised differently, resulting in major differences in infrastructure and spending between counties. Many hospitals experienced budget deficits and turned to their owners, the coun- ties, who however were bound to their priorities and turned to the state for help. This resulted in a chain of a so-called blame game whereby hospitals were blaming counties who then turned to the state (, 2011). It was felt that the separation between ownership and managerial responsibility with the counties on one side and central funding on the other side was a reason for the difficulties in addressing deficits and substantiated the decision to return hospital ownership to the state as it was expected that greater coherency in ownership and funding responsibilities would reduce deficit budgeting. One debate some years after introducing the reform focused on the question whether the board of trustees created a democratic deficit, as they were not subject to political appointment. In 2006, a decision was taken to reorganize the boards with government appointed politicians as representatives in the board of trustees of the regional health authorities and the local health boards with political representation following the strength of the party. This reorganization followed the logic that party politicians would be more sensitive to local needs, even when these are not necessarily elected. The coordination reform that will be introduced in 2012 is driven by economic concerns rather than considerations of efficiency or quality in particular as expenditures in hospital care doubled since the 2002 reform (Romøren et al., 2011).