The following is a response to recent questions about the new health care legislation’s potential benefits. Mad As Hell Doctor Sam Metz provides a brilliant comparison when presented with this query: ”Because the Netherlands and the U.S. have an individual mandate and use for-profit insurance companies to finance health care, can Americans expect to enjoy the same cost-effective results as do the Dutch?”
Almost every industrialized country providing universal cost-effective health care follows three rules:
1. All citizens are in a single risk pool with a single schedule of benefits.
2. Cost sharing to patients is minimal.
3. Financing is provided by regulated, not-for-profit agencies.
There are three exceptions among industrialized nations. The US violates all rules. Consequently, we rank last on almost every measure of public health while spending twice as much as our average industrialized colleague.
The Netherlands (and Switzerland) comply with 2 ¾ of these rules. All citizens are in a single risk pool with a single schedule of benefits. Cost sharing is minimal. Financing is provided by regulated agencies. However, for-profit companies are allowed to compete with not-for-profit companies.
But the other two rules still apply in the Netherlands, making this brand of competition repellant to American insurance companies.
- Insurers must sell at the same price to all applicants, regardless of age, sex, or health.
- Just to be sure there is no cherry picking, the Dutch government taxes companies with healthier patients and subsidizes those with sicker patients.
- All policies must include a comprehensive schedule of benefits at a regulated price. Companies compete on service only.
- All policies have low deductibles and minimal out of pocket costs.
- Administrative costs are low, 5%, compared to the US costs of 15% to 20%
It is not only the Dutch insurance companies that operate differently, consumers do as well.
- All residents must buy insurance. No excuses.
- Failure to pay the required premium may precipitate a tax on the offender’s salary, disability benefits, or retirement income.
- Specialty care can be obtained only through primary care referrals.
What does this ostensibly competitive market look like? The top five plans in the Netherlands have 82% of the market. Most insurers still operate at a loss in hopes of gaining market share later. And 75% of health care is funded via the government. In the US, the figure is 45% and there is outcry about “socialized medicine” and “government rationing.”
It is quite the imaginative stretch to say our new health care bill puts us on par with the Dutch system.
Remember the three rules. The US has a long way to go before we can claim to be “going Dutch.”
References:
