LEGAL

Go Backstage
Understanding the Ins and Outs of the Dutch Health Care System

By Jan-Koen Sluijs

A concerted effort to understand health care insurance and the related regulations is something we rarely make; admittedly, most of us loathe reading through the small print and evaluating the consequences of our choices. Nevertheless, efficient health care goes hand in hand with sound rules and regulations and one is best advised to make an effort to explore as much as possible this seemingly endless terra incognita, especially when one is based in a foreign country.

At present, more and more Dutch health care providers are reaching out to their international clients, in an effort to help them shed some light on how to access and make the best of the Dutch health care system. However, little is known about the legal framework all health care providers must operate within.

To better understand the present – that is, you opening the next bill coming from your health care provider and not really knowing how and why to reclaim your expenses from your health care insurer – this article offers a brief tour behind the scenes of Dutch health care regulations.

In 2006, the Dutch health care system underwent a change that was rather revolutionary in light of the historical concept of equal care for all: in order to bring the rise of prices to a halt and improve the overall quality of services, the Dutch government introduced a model that was to allow market forces to follow their course – more or less – freely.

The new concept was based on the paradigm of offering health care services that were better targeted towards the demands of the end users, by way of less planning and intervention by the government. Thus an unfolding of competitive market forces was envisioned, leading to an overall improvement of quality and costs.

In theory, fair competition within health care sounds desirable, logical and straightforward. In practice, however, it can be a bumpy road, mainly due to the desire of the government to safeguard public interests at all levels of society.

These dilemmas and challenges became evident a few years ago when the Minister of Health proposed removing the reimbursement of dentures from the compulsory health insurance. He was immediately reprimanded in Parliament: “Are we soon going to see who’s rich and who’s poor by looking at their teeth?” asked the Socialist Party representative. And, presto, back went the dentures into the health care package subsidised by the State. This small, rather pragmatic, example highlights all the challenges of the matter in one go.

Common sense confirms that health care should not be an arena in which market forces are unleashed without restraint, and all agree that the government must carefully supervise and steer the process, if the outcome is indeed to improve. In the Netherlands, this is now done by means of a complex reimbursement system that ties the amounts reimbursed to the services provided. Health care providers recover their costs by using a set of codes that describe the medical procedures carried out in greatest detail. At present, the Dutch ‘cure’ sector (hospitals), uses some 30,000 such codes, called DBCs (diagnose behandeling combinaties – or diagnosis-treatment combinations). For the same reason, the Dutch care sector uses targeted care packages (ZZPs, or zorgzwaartepakketen).

A DBC registers the health services received by a patient using four codes, indicating the type of need/ailment, the care, the diagnosis and the treatment. It lists each and every action, from the very first contact to the last follow-up visit, from surgery, medical investigation and therapy to second opinions, specialist consultations, recovery days and more.

Each of these actions has its own price tag, the sum of which will eventually add up to the price of a certain DBC. Health care providers recover their costs from the health care insurers by listing the DBCs for the cure and care provided to a patient. Under the new governmental provisions, providers and insurers may freely negotiate the price, quality and extent of certain DBCs, within the so-called B segment.

At present, the B-segment comprises about 34% of the health care sector and is growing steadily, the target envisioned by the government being close to 70%. In order to attain this, hospitals must become more market-oriented, entrepreneurial entities.

It goes without saying that the supervision of such an intricate system is complex. Several organisations have joined forces for this task: the Health Care Inspectorate (Inspectie voor de Gezondheidszorg – IGZ) supervises the practical implementation of mandatory quality standards within the care provided. The Dutch Care Authority (Nederlandse Zorgautoriteit – NZa) watches over the quality, accessibility and price of care, whilst the Netherlands Competition Authority (Nederlandse Mededingingsautoriteit – NMa) keeps an eye on fair competition conditions within the health care sector.

Achieving co-operation between these bodies is a delicate balancing act, which requires constant fine-tuning. Occasionally, in spite of the best of intentions on all sides, the actions of one body may affect the outcome of the actions of the other ones. An example to illustrate this: a few years ago two hospitals in Zeeland announced their intention to merge, aimed at improving their services, especially in paediatrics and intensive care. The NMa – the supervisory body that monitors fair competition conditions – opposed to the merger, deeming that it would limit choices for patients, whilst leading to an unwanted concentration of influence in the region, thus negatively impacting prices. “What else is new?” one would ask, hearing this well-known mantra of any supervisory body.

The hospitals re-wrote their merger plans and the NMa eventually gave its blessings to the merger. What had happened behind the scenes was that the IGZ – the body engaged with health care inspection – had concluded in their evaluation report of 121 pages, that the mere existence of both hospitals would be under threat, should the NMa further oppose the merger, as their individual financial resources were nearly depleted and they were barely able to provide even basic health care within the region as it was.

Pure-bred economists and legal professionals might smile indulgently at such reasoning – still, the NMa bowed to the judgement of its sister body, agreeing to the merger, stipulating a series of conditions to be met by both hospitals.

One of these conditions required that the cure and care service packages that could be negotiated freely within the B-segment were not to surpass average Dutch levels. However, if no other adjustment is made, in practical terms this means that the prices that can be claimed by the ‘new’ hospital have been frozen for an unlimited period of time, including prices for services that are added in the future (since the B-segment is to grow up to 70% of the health care sector, in the government’s view).

Notwithstanding the best efforts of the supervisory body to maintain and guarantee fair competition conditions, this one condition could succeed in excluding the ‘new’ hospital from the field, since its prices could likely turn out to be higher than those of all other players who are under no obligation to freeze their prices.

Ah, the blessings of rules and regulations – the more cynical among us might say... Rest assured, this play is far from having reached its final act.

Jan-Koen Sluijs is a senior lawyer at GMW Advocaten and can be contacted at 070 361 50 48 or j.sluijs@gmw.nl. For more information, visit www.gmw.nl/en.

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