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News - Il futuro dei sistemi sanitari: una prospettiva europea

Nel corso del working group sulla riforma dei servizi pubblici di EIN (L’Aia, 2 maggio 2007) Evert Jan van Asselt dell’Istituto di Ricerca del CDA, ha tenuto un discorso sulla sanità descrivendo il sistema dei Paesi Bassi nel quadro delle regole europee.

Ladies and gentlemen,

The subject of this meeting, Healthcare, has not been chosen without a reason. A year ago a new healthcare system has been introduced in the Netherlands. It was preceded by 25 years of discussion. In the past, reform proposals came to grief in parliament on the last moment. Since then discussions about healthcare reform have become an ideological battlefield between Social Democrats and Christian Democrats, and sometimes also between wings within parties. But, the government of Jan Peter Balkenende managed to implement a radically new system. The reason why the reform was a success this time, was because of a clear and coherent vision about the future of the health care system, and because of the support of the coalition partners and, not unimportant, social partners.

The Dutch reforms are not finished. We are halfway. But the most important part lies behind us. The political sensitive part, the health insurance, has been reformed. But there is more. The coming years the other part has to be deregulated, the organisation of the provision of healthcare. Only when both reforms are implemented, the Netherlands will fully reap the fruits of the efforts, because of the interaction between the health insurance and the provision of healthcare.

What will the healthcare sector look like in 2025? Will there be 27 different healthcare systems in Europe? Or will there be convergence towards one European model? Will there be one internal market for healthcare providers and health insurance companies? Or will the integration not come about? At this moment we see patients who receive there healthcare abroad. We also see chains of hospitals, even with a stock-exchange notation. Some of them are operating in several countries as multinationals. On the other hand, foreign investment in healthcare is still very small. And multinational health insurance companies are absent, as far as I know. Will this picture look different in 2025? I think so.

Firstly, patient will look for the best healthcare they can get, and will be prepared to travel for it. Internet is a great help in this case. It gives information about hospitals and doctors else where. The mayor hindrances for an internal market of healthcare is the way hospitals and doctors are financed. As long as the national of local governments bears the burden of capital investments of hospitals, the internal market will not easily develop. For only when hospitals will receive prices for their products on an all inclusive basis, an internal market has a real chance. When hospitals use integral cost-prices, the nationality of the patient or the way he is insured doesn’t matter. Especially in border regions a more integrated approach is obvious. What about the internal market for healthcare provision? Investors will look for opportunities to invest in hospitals and other healthcare providers. The healthcare sector is a rapidly and continuously growing sector in an ageing Europe. These investors won’t restrict themselves to one country, but will build Europe-wide empires, and will try to influence European policymakers. Another possibility are international mergers of hospitals. Thirdly, the health insurance market. Perhaps there will be a European health insurance market, but this seems not so likely because of the national differences in financing healthcare, and also because health insurers are not only insurance companies but also purchasers of healthcare services on behalf of their insured. So synergy on an European level is not so easy to obtain for multinationals. Although it would be very interesting to have international health insurers, because they can throw a fresh light on national political taboos. For instance, in the Netherlands it is politically very risky to propose that people should pay a part of the treatment costs themselves, although this is a very normal practice in Europe. It reflects the Dutch risk averse culture; we want to insure our risks for 100%. It also reflects our fear of not solidarizing with people with a low income. International health insurance companies would also take care of a rapid dissemination of new practices. The same holds true for international chains of hospitals.

To the extent that the healthcare sector in Europe will look different in 2025, depends for a great deal on the deregulation of the health care sector by national EU-members. But there is another driving force, and that is the nature of healthcare itself. The care for aged and handicapped will in the future still be organised on a regional level, and more and more in small communities. This will not change fundamentally. Although a regional level doesn’t mean that a Dutchman will only receive care in the Netherlands. A lot of Dutchmen already use their health care voucher to receive their care in Spain. And not only their care but also there pension benefits. For the healthcare aimed at curing someone from a disease, the tendency will be towards differentiation. The driving force behind this differentiation is standardisation. Due to new technology and new medical knowledge, health care changes. What was difficult operations ten years ago, can be a standard treatment now. For example an art hip. This standardisation offers opportunities for small healthcare providers who are specialized in one special treatment. And not necessary only on a national level. Some kinds of healthcare lend themselves very well for an European scale, because of their economies of scale. A patient with a very rare disease wants a specialist who knows everything about his or her disease. For most people it won’t be a problem if the doctor is a foreigner. If the disease is life threatening; people are prepared to take a plane to fly to that specific doctor. So there is a market on European level for specialized doctors, when economies of scale are decisive. This offers an opportunity to Europe. Here the internal market has clear added value for the patient. Specialized centres on an European level, with a low volume, but clarity of the outcome of the treatment, should be stimulated. For example specialized cancer centres, or eye centres. Smaller countries will gain by an open market because the can profit from European centres in other countries, which reduces costs. Bigger countries can export their healthcare in this way. Also internet offers possibilities for a more integrated healthcare market. Specialist from abroad can be consulted by internet. Photo’s can be sent by email. Even operating at a distance is already possible. But only when there is an system of reimbursement that makes this possible, these opportunities will be available for all citizens, and not only the rich. To conclude, the nature of health care provision itself, will stimulate the internal market. It depends on the regulation, how quick this processes will go.

As I said, the Netherlands set a first step in introducing more market force in the health care system. We introduced a total new insurance system. The new system is a combination of two parts of the old systems. In the old situation there was a compulsory health insurance for everybody with an income less than 32.000 euro, and a voluntary private insurance for everyone with a higher income.

In the new situation every Dutchman has the obligation to insure himself against a basic insurance package. The minimum package is specified by law. The premium for this basic coverage is about 1000 euro and is the same for everyone who is insured by the same insurance company. Between insurance companies the premiums can differ. The premium is independent of ones health or income. And, health insurance companies are obliged to accept everybody who wants to insure him or herself. A fund, filled with income dependent premiums paid by employers, takes care of the risk equalisation. That means that insurance companies are compensated for bad risks, in such a way that there portfolio is risk neutral. The insurance companies can be for profit or not for profit.

Crucial for the new system is that the two components of solidarity are separated. The solidarity between healthy and sick is not mixed up with the solidarity between rich and poor people. The former solidarity is typical a task of insurance companies. They insure people with different risks of health. The losses they are forces to take, because of the obligation to accept switching patients, are compensated by a system of risk adjustment. The solidarity between rich and poor on the other hand, has nothing to do with healthcare as such. It has to do with income politics. Therefore we have separated both solidarities and placed income solidarity in the tax system and risk solidarity in the insurance system. People with a lower income receive an income dependent tax credit, related tot the healthcare premium they have to pay. So, everybody can afford a health insurance. This guarantees income solidarity. The advantage is that insurance companies are no longer hampered by income politics of the governments and can fully concentrate on concluding purchasing contracts with health providers and on the service they want to offer their insured. This system of tax credits has been implemented by Balkenende on a broader scale. Subsidies for renting a house and for child care are also transformed from a subsidy into a tax credit. Income politics in the Netherlands is therefore concentrated in the fiscal system, which is a very good thing. It offers transparency and make the system more just.

The Netherlands have been innovative on the insurance market. But on the supply side of healthcare we have a lot to do. In a lot of countries the situation is reversed. The insurance market is strictly regulated by the government and the healthcare market is fairly free. Even in Great Britain with its National Health Service, there are commercial healthcare providers. The Netherlands, have so far, only very reluctantly set steps towards more market forces in the provision of healthcare. The social democrats are opposed to more market force, while the CDA is in very much in favour of it, if it can be combined with solidarity. Progress is only possible step by step in the coalition of CDA, Labour party and Christian Union. The CDA want hospitals to be societal enterprises, which invest their profit into the healthcare sector and use it to improve their own service level instead of paying dividend it to shareholders. The societal enterprise has in common with a commercial enterprise that it is exposed to market forces. It has in common with a societal organisation that it is independent of the government and has a social mission. In case of a hospital that social mission is the goal to provide good healthcare to the patients. Profit is only relevant in so far it helps to improve the quality of the service provided.

In the current systems, the real costs hospitals make are calculated afterwards, and compensated the next year. A hospital that doesn’t function well, won’t get easily into financial problems. The other side of the picture is that a good performing hospital is not rewarded. Of course this system doesn’t stimulate the dissemination of innovation. New better treatments are not or later implemented because the stimulus to change is absent. Therefore hospitals should be bearing the costs of capital themselves and budget guarantees should be abolished. The number of patients should become decisive for the income of hospitals and not the number of available hospital beds in the hospital, as it is now. I expect that the new minister of Health, the former director of the Research Institute for the CDA, will change this. We need to change the system in a way that it provokes innovation and entrance of new healthcare providers.

Problems with Europe The biggest problem the Dutch government had when it wanted to introduce the new health insurance was not the support for the reform of the public. Of course there were pessimists who said the system would be a disaster. The real problem was Europe. More specifically, the European law, or the interpretation of that law, or better the uncertainty about the interpretation.

Paradoxally, the problems arose because of the wish to introduce more market forces into the healthcare sector. As a result, the Netherlands clashed with the rules of the internal market! We wanted more market, but Europe was an obstacle. When health insurance companies perform economic activity they are regarded as enterprises. And then, foreign companies should have entrance to the Dutch health insurance market. The supervision on foreign insurance companies is not a task of the Dutch governance, but of the government of the homeland of the insurance company. Every private insurance company which is recognized anywhere in the European Union, is allowed to offer services in the whole union. The Dutch government may not hinder that insurance company to offer its services on the Dutch market, unless she has very good reasons for it. The general interest of a country can justify such restrictions. But the hindrances have to be proportional.

What were these restrictions on the Dutch insurance market. An important one is that an insurance company may only offer a insurance policy with a standard coverage, as is defined in the Dutch law. Another one is that risk selection is not allowed. So, there are a few essential restrictions for insurance companies. These restrictions contradict with the rules of the internal market. But these restrictions can be justified because of the general interest, which is: solidarity between sick and healthy people and a good health insurance for all Dutchman. And, these restrictions do not go further than necessary. But there was another question that had to be answered before. The question arose whether the health insurance market wasn’t already harmonised by a Directive. The problem for the Netherlands was that the interpretations of the relevant Directive, in this case the Third Non-Life Insurance Directive, differed a lot, and case law was missing. The question whether this Directive harmonised the health insurance market was not easy to answer. One could say that the Netherlands took a risk by implementing the law. There was indeed a letter of the Dutch Eurocommisioner Bolkenstein, which said that the Commission saw no problems with the Dutch interpretation, but it also said the last word was to the Court of Justice. Still the Dutch health insurance, in particular its risk equation, runs a risk, all be it a small one.

So, the Netherlands had problems with the European law. In which way can the European law be improved? I will concentrate on the insurance market, and make a general point.

Regarding the insurance market it is desirable that there will be more clarity towards the interpretation of the Third Non-life Directive. That would take away a lot of obscurity for governments. It also would diminish the possibility for antagonists to sow doubts. Our own research showed that the even the old Dutch health insurance system was not Europe proof! When it is allowed to interpret the Third Non-life Directive as the Netherlands did, the conclusion is that the insurance market is not harmonized by the Third Non-life Directive on important aspect which are relevant for organizing solidarity. Governments may restrict the free movement of services when the general interest is at stake, and in so far these restrictions are proportional. But that still leaves unanswered the question which restrictions are allowed. It is therefore desirable that the exceptions are clarified. This can be done by a adaptation of the Directive, or the Commission can do an interpretive communication. Soft law would help a lot.

But, which instrument will be chosen, it is clear that Europe has to define more clearly than now, how member state can combine solidarity with the internal market. How much restrictions are accepted in order to guarantee solidarity. We need clarification on how economic activities and the general interest relate to each other. To often, the decision of the Court of Justice are dependent on occasional solutions and on attentive public servants who signal problems with the European law. We need that clarity. Only when we can make the combination of market forces and solidarity, we are able to keep our health care affordable for everybody.

How does the Dutch system relates to more market forces. In the long run I expect that that the Dutch healthcare system will be totally ready for the internal market. For insurance companies this is already the case; every insurance company who is admitted in its homeland can offer a health insurance in the Netherlands, if the conditions of new health insurance law are met. For hospitals I think we will be much further within five years. When the capital costs are integrated in the prices and when the prices are not dictated anymore by a state led authority, but are free for the bulk of the products, and when hospitals can decide themselves whether to build a new building or not, nothing will prevent a foreign hospital to enter the Dutch market then. The direction in which the healthcare system in the Netherlands goes, is good, I think. The system is open towards Europe on the one hand, and offers sufficient guarantees for quality and affordability of healthcare on the other hand. It will be much more innovative, and therefore in the end cheaper, and perhaps it will even provide services to other European citizens.

Thank you for your attention.

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