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Jan-Kees Helderman on NHS reform - a Dutch perspective


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Jan-Kees Helderman, assistant professor in Comparative Governance and Public Policy at Radbouyd University Nijmegan, outlines how the Dutch health care system operates and reflects on the English health reforms.

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Jan-Kees Helderman on NHS reform - a Dutch perspective

  1. 1. Health Reforms in England <ul><li>The King’s Fund, London, 23 March 2011 </li></ul><ul><li>Dr. Jan-Kees Helderman </li></ul>Department of Public Administration & Political Science Views from a Dutch perspective
  2. 2. Changing the Rules or the Game? Liberating the NHS?
  3. 3. <ul><li>Revisiting Kenneth Arrow (1963) </li></ul><ul><ul><li>“ The problem with health care is that the social adjustment towards optimality will always put obstacles in its own path because of the uncertainty and non-marketability of the bearing of risks and the imperfect marketability of information . As a consequence, health care systems will always be confronted with second-best solutions in the form of compensatory institutional structures.” </li></ul></ul><ul><li>There are no Pareto optimal solutions for an equitable, efficient and affordable health care system </li></ul><ul><li>So under what conditions can choice and competition become part of the second-best solution? </li></ul><ul><li>This depends on the institutional structures of the system and country at stake and our capabilities to reform them </li></ul>
  4. 4. Each system has its own rationale: <ul><li>Bismarckian health care systems and Beveridge systems evolved into different institutional configurations. </li></ul><ul><li>Beveridge NHS system: </li></ul><ul><ul><ul><li>Tax funded National Health System </li></ul></ul></ul><ul><ul><ul><li>Purchaser / provider split: internal market </li></ul></ul></ul><ul><li>Bismarckian Social Health Insurance system </li></ul><ul><ul><ul><li>Sickness funds & for-profit health insurers (de-facto universal) </li></ul></ul></ul><ul><ul><ul><li>Non-profit private providers </li></ul></ul></ul><ul><ul><ul><li>National Health Insurance & regulated competition </li></ul></ul></ul><ul><li>Both aim to address quality / equity / efficiency and costs by combining command & control / competition and collaboration </li></ul>
  5. 5. (Source: Davis K., Schoen, C., Stremikis, K (2010) Mirror, Mirror on the Wall, Commonwealth Fund)
  6. 6. A corporatist – Bismarckian – health insurance system <ul><li>Sovereignty and subsidiarity: corporatism </li></ul><ul><ul><li>What can be delivered in the private sphere should not be undertaken by the government </li></ul></ul><ul><ul><li>Predominantly public financed and private delivery of health care </li></ul></ul><ul><ul><li>Third party payer: sickness funds and private for-profit health insurers </li></ul></ul><ul><ul><li>Independent not-for-profit health care providers </li></ul></ul><ul><li>The Dutch state is responsible for access, affordability and quality of health care, but not equipped to accomplish these responsibilities under its own strength </li></ul>
  7. 7. A short historical overview of Dutch health care Private health insurance White paper: Health on Demand (2001) Simons-plan (1993) Exceptional Medical Expenses Act (1968) National Health Insurance under private law, January 1 st , 2006 Mid 19 th century – World War II: Voluntary sickness funds Purple coalitions (1994-2001) Et Voila! Centre-right Cabinet (2001-2007) 30 Access to Health Insurance Act (1986) Sickness fund decree (1941) Sickness Fund Act (1964) Dekker-proposals (1987)
  8. 8. 1980s: why did we need reforms? <ul><li>Problems with equity </li></ul><ul><ul><li>Bifurcated health insurance system </li></ul></ul><ul><li>Problems with efficiency </li></ul><ul><ul><ul><li>Fragmented finance structure / no incentives </li></ul></ul></ul><ul><li>Problem with responsiveness </li></ul><ul><ul><li>Little or no choice for enrollees / citizens </li></ul></ul><ul><li>Problems with cost containment </li></ul><ul><li>Dekker Committee (1987): Willingness to Change </li></ul>
  9. 9. Key elements of the Dekker proposals (1987) <ul><li>A new standard insurance for all, provided by social and private health insurers </li></ul><ul><ul><li>Basic package and supplementary insurance packages </li></ul></ul><ul><ul><li>Health insurance fund: in order to compensate health insurers for their high risks in the basic package </li></ul></ul><ul><ul><li>Nominal flat rate premiums with compensation for people on low incomes through individual health care allowance </li></ul></ul><ul><li>Consumer choice? </li></ul><ul><ul><li>Citizens can change insurer every year </li></ul></ul><ul><ul><li>Collective contracts allowed </li></ul></ul><ul><li>Competition? </li></ul><ul><ul><li>Insurers compete for the business of the insured </li></ul></ul><ul><ul><li>Selective contracting: competition in the providers market </li></ul></ul>
  10. 10. Incremental gradual reforms <ul><li>We came from a bifurcated system of sickness funds and private health insurers </li></ul><ul><li>We introduced very incrementally a system of regulated competition together with the introduction of a basic health insurance for all </li></ul><ul><li>Because of sophisticated risk equalisation subsidies to health insurers, equity is ensured </li></ul><ul><li>Ending up in a full convergence of sickness funds and private health insurers </li></ul><ul><li>It took more than twenty years to accomplish this </li></ul>
  11. 11. Central Health Insurance Fund employer State (Ministry of Public Health, Well-being and Sports) citizen Health care allowance State contribution (5%) Income-dependent contribution (50%) Health insurer Health care provider Nominal premium (45%) Reimbursement of costs -/- personal excess Payment of health care bills The Dutch Health Insurance System Income solidarity Income solidarity Risk-adjustment subsidies Risk Solidarity Selective contracting: A /B segment Monitoring & Supervision: Inspectorate for Health Care / Dutch Competion Authority / Dutch Health Care Authority HEALTH CARE INSURANCE BOARD
  12. 12. Key actor: the health insurer <ul><li>Full convergence of sickness funds and private health insurers </li></ul><ul><li>All 28 health insurers are private entities </li></ul><ul><ul><li>Organised in 14 large insurance holdings </li></ul></ul><ul><ul><li>4 largest companies hold 90% of the insurance market </li></ul></ul><ul><ul><li>Offering a wide variety of insurance plans </li></ul></ul><ul><ul><li>Collective contract with employers </li></ul></ul><ul><li>Selective contracting in the medical curative sector is still a marginal phenomenon </li></ul><ul><li>Health insurers are also involved in the development of performance indicators </li></ul><ul><li>Gradual transition from ex-post to ex-ante risk equalisation </li></ul><ul><li>PbR: in 2012, 70% of all hospital care will be negotiable on price </li></ul>
  13. 13. Gradual institutional change “ Detailed descriptions of types of incremental meandering would also be interesting; perhaps this would more clearly differentiate between a sequence that lead to reform and another that leads to revolution.” (Hirschman en Lindblom, 1962: 221). Detailed descriptions of types of incremental meandering would also be interesting; perhaps this would more clearly differentiate between a sequence that leads to reform and another that leads to revolution.” (Hirschman en Lindblom, 1962: 221) Time: 2006 Displacement New Health Insurance Act 1987 BLUEPRINT The Dekker Plan Conversion 1986 Layering Access to Health Insurance Act Gradual improvement of risk equalisation Gradual introduction of competition Gradual convergene of health insurers 1980 Drift Little reformist change (passive political agency) Large reformist change (active political agency) Figure 1. The extent of institutional change and associated ‘levels’ of agency
  14. 14. Learning by Monitoring <ul><li>Actors must learn how to (co-) operate in a market </li></ul><ul><ul><ul><li>Exit – Voice & Loyalty </li></ul></ul></ul><ul><li>Reforms ask for consistency and continuity, but also for carefully monitoring their (unintended) consequences. </li></ul>Trust Reputation Reciprocity Increasing levels of co-operation Net benefits (Elinor Ostrom, 1998, A Behavioral Approach the Rational Choice Theory of Collective Action. American Political Science Review, Vol. 92, No.1,pp.1-22) Integrated care Innovations Prevention
  15. 15. Reflections on England <ul><li>Stop and Go Reforms </li></ul><ul><ul><li>1989 Working for Patients / 1991 Internal Market > GP Fundholding </li></ul></ul><ul><ul><li>1997 the New NHS > third way / 2000 the NHS plan > performance targets / 2002 Delivering the NHS plan: provider competition / patient choice / 2004 The NHS improvement plan / 2008 NHS next stage review </li></ul></ul><ul><li>2010 Liberating the NHS: </li></ul><ul><ul><li>From NHS trusts to foundation Trusts </li></ul></ul><ul><ul><li>An economic regulator: Monitor </li></ul></ul><ul><ul><li>Strengthen the role of local authorities: integration of health and social care </li></ul></ul><ul><li>Commissioning: </li></ul><ul><ul><li>Abolition of SHAs and PCTs </li></ul></ul><ul><ul><li>GP-led commissioning by GP-consortia </li></ul></ul><ul><ul><li>Independent NHS Commissioning Board </li></ul></ul>? <ul><li>Requires being capable of: </li></ul><ul><li>Assess needs </li></ul><ul><li>Develop data to analyse utilisation </li></ul><ul><li>Predict risk </li></ul><ul><li>Managing financial and insurance risks </li></ul><ul><li>Monitoring performance of providers </li></ul><ul><li>Size of the regional offices? </li></ul>
  16. 16. Thank you for your attention