Abstract
This chapter addresses the role of private insurance in the Dutch healthcare system wherein public and private funds were put into competition in 2006. This system has always been characterized by both public and private interactions, and its recent marketization has not terminated the state regulation. Its functioning also demonstrates an innovative way of governing and regulating competition in the healthcare and health insurance markets, combining EU law and national legislation. However, it can be debated whether EU competition law is adequate in regulating such a system based on managed competition. As the improvement of these competitive conditions is unlikely to eliminate market failures, the state has even increased its role in monitoring, controlling and, when necessary, intervening on these markets.
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Notes
- 1.
They have increased significantly since 2006.
- 2.
As of 1 January 2019, the income-related contributions for health insurance under the Health Insurance Act payable by the employer will be increased from 6.90% to 6.95%. The maximum contribution base for the Health Insurance Act is EUR 55,923 as of 1 January 2019.
- 3.
Annual income may not exceed EUR 29.562 for singles or EUR 37.885 for families (2019).
- 4.
More specifically: “medical care provided by GPs, medical specialists (consultant physicians) and obstetricians; district nursing; hospitalization; mental health services, including hospital care (mental health-related) up to a maximum of three years; medications; dental care up to age 18 years; services provided by various types of therapists, including physical therapists, remedial therapists, speech therapists and occupational therapists; nutritional/dietary care; medical aids; ambulance support/sedentary medical transport; physiotherapy for people with chronic illnesses” (Ministry of Health, Welfare and Sport 2018, p. 11). This is about 60% of the healthcare budget.
- 5.
Following the economic crisis, the compulsory deductible increased from EUR 150 in 2008, via EUR 220 in 2012 and EUR 350 in 2013, to EUR 385 yearly in 2016 (Van Esch et al. 2017). Since 2012, cost containment has also focused on: shifting costs between various statutory sources in combination with major cuts in budgets (most notably the current long-term care reform); substitution between different types of care: institutional care with home care, and secondary care with primary care (as visible in mental and long-term care); increased focus on improving efficiency (e.g. tendering of generics) and eliminating fraud (OECD/European Observatory on health systems and policies 2017).
- 6.
The Dutch health spending to GDP ratio was 10.1% in 2017 while the European average was 9.6% the same year (OECD/EU 2018).
- 7.
However, there was relatively little mobility among the insured at that time and insurers failed to make use of the opportunity for selective contracting that was offered to them.
- 8.
However, community rating prevented health insurers from calculating premiums on the basis of individual risk factors and health status.
- 9.
During the 1970s and 1980s, only private insurers operating in the second compartment offered sold supplementary coverage in the third one. Since the early 1990s, sickness funds started to offer supplementary health plans on their own. As this was formally prohibited, sickness funds had to cooperate with private insurers (ZBW).
- 10.
EU competition rules are set out in the Treaty on the functioning of the European Union in articles 101 (anticompetitive agreements), 102 (dominance abuse), 106 and 107 (State aid).
- 11.
Some of them clustered into an umbrella organization (currently ten health insurers) called Health Insurers Netherlands (Zorgverzekeraars Nederland, ZN) which defines its members as “social entrepreneurs”.
- 12.
Actually, there are not huge differences, as health insurers have to propose and cover the statutory medical care package and are not allowed to apply risk selection when setting premiums. Health insurers differentiate themselves through their supplementary health insurance offer.
- 13.
The Dutch competition authority referred to case law of the Court of Justice of the European Union (CJEU), such as Joined Cases C-159/91 and C-160/91, Poucet and Pistre [1993], and Case C-224/94, FFSA [1995]. About the notion of economic activity according to CJEU case law, see Chap. 5 of this book.
- 14.
ECJ, Joined Cases C-264/01, C-306/01, C-354/01 and C-355/01 AOK Bundesverband and Others versus Ichthyol-Gesellschaft Cordes, Hermani & Co. and Others, 18 March 2004.
- 15.
One could argue that this freedom is rather theoretical or virtual, because health insurers tend to offer the same basic package of medical care and benefits; selective contracting (with care providers) may however improve the quality and reduce the cost of healthcare for the beneficiaries.
- 16.
Decision of the Commission of 22 December 2005 on the introduction of a risk equalization system in the Dutch Health Insurance, N541/2004 and N542/2004-C (2005) 1329 fin.
- 17.
Nevertheless, these authors observe that there are not much evident outcomes of competition as the service level of the insurer is largely similar with only four major insurers left and the quality of purchased care, which is difficult to assess for individuals, plays a smaller role. Furthermore, 64% of individuals are covered by collective contracts, and since most group contracts are negotiated on the premium level, not on the basis of the quality of the contracted care, quality choices in this market do not yet influence the quality of purchased care.
- 18.
Both collaborate through a mutual protocol.
- 19.
For instance, in its judgment of 17 December 2015, the Rotterdam District Court decided that ACM’s fine against the Dutch Practitioners’ Association was unjustified. Although the association had put recommendations on its website concerning the establishment of new clinics, this did not constitute a competition restriction
- 20.
The European Commission has adopted guidelines about SMP in telecoms in 2002, revised in 2018.
- 21.
Must be assessed the market share of the reviewed undertaking and its competitors. The core question is to find if the reviewed undertaking has the ability to determine its behaviour independently from other market participants (customers, suppliers and competitors).
- 22.
Punitive sanctions such as fines can be ordered when the obligations are not met.
- 23.
It was proposed to impose new SMP measures on healthcare providers only, and not on health insurers. This proposal was not favoured by the business community and was criticized by Maverick, a leading competition law firm in the Netherlands.
- 24.
Article 54 of the third non-life insurance Directive states that a Member State in which insurance contracts “may serve as a partial or complete alternative to health cover provided by the statutory social security system may require that those contracts comply with the specific legal provisions adopted by that Member State to protect the general good in that class of insurance, and that the general and special conditions of that insurance be communicated to the competent authorities of that Member State before use”.
- 25.
The notion of SGEI was introduced in the European Treaties, at article 86 TEC (Treaty Establishing the European Community) that became article 106§2 TFUE, which states that “Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union”.
- 26.
Court of First Instance, Case T-289/03, British United Provident Association Ltd (BUPA), BUPA Insurance Ltd and BUPA Ireland Ltd v Commission of the European Communities, 12 February 2008. In this case, the Court set a new standard for assessing whether public compensation—through a risk equalization system between providers of private health insurance in Ireland—constitutes a state aid or is covered by the SGEI exception. The BUPA ruling is notably less rigid than the standards set in Altmark (24 July 2003, Case C 280-00) and gives room for public intervention in the health insurance market.
- 27.
Decision of the Commission of 22 December 2005 on the introduction of a risk equalization system in the Dutch Health Insurance, N541/2004 and N542/2004 -C (2005) 1329 fin.
- 28.
Ministry of Health, Welfare and Sport Risk Insurance under the Health Insurance Act in the Netherlands, Summary of 7 July 2008.
- 29.
Order of the Court of First Instance of 13 October 2008, Azivo Algemeen Ziekenfonds De Volharding v Commission (Case T-84/06) (2008/C 327/73).
- 30.
About market concentration in the health insurance sector, see Chap. 4 of this book.
- 31.
According to the Dutch Health Care Authority, they were 118 en 1990, 33 in 2006. Well before 2006, the healthcare sector anticipated the reform with scale enlargement. Private insurers and sickness funds merged into large companies to strengthen their competitive position.
- 32.
The Health Care Monitor is an annual survey among a representative sample of consumers into the health insurance market.
- 33.
See Chap. 3 of this book.
- 34.
The Solvency II directive, implemented in 2016, requires them to have higher reserves. However, the average Solvency II ratio for health insurers was 188% in 2017 relative to 271% in 2016 (KPMG 2018).
- 35.
They conducted interviews with CEOs and organized separate focus groups with purchasers and marketers of five Dutch health insurers to examine the incentives insurers face for enhancing quality of care.
- 36.
About two-thirds of the Dutch population are covered by a group health insurance plan (55% en 2006). Such groups can be organized by any legal entity (e.g. employers, shops, sports clubs, patient organizations and private initiatives). Three-quarters of those with collective insurance are insured through their employer. Whereas insurers have to respect open enrolment, groups are free to reject applicants (Groenewegen and de Jong 2007; van de Ven et al. 2017). These enrollees benefit from a 10% rebate. Allowing such a discount encourages risk selection.
- 37.
The Socialist party proposed replacing the current array of around 30 insurers with a single national scheme for the universal basic package.
- 38.
In 2008, a hospital was close to bankruptcy and the NZa decided to give it financial support. The Ministry of Health was heavily involved as he said he could be held accountable for the continuity of hospital care in the region (Maarse and Paulus 2011).
- 39.
Deemed necessary to curb the increase in healthcare expenditure in the early 2010s (see above).
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Turquet, P., Martin, P. (2021). The Dutch Way: Experimenting with Competition in the Healthcare System. In: Benoît, C., Del Sol, M., Martin, P. (eds) Private Health Insurance and the European Union. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-54355-6_9
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