Commissioning Health Care under the Health Insurance act

1. Commissioning health care under the Health insurance act
West North West Hospital group conference, October 9th, Westport
Johan van Manen
Netherlands Health care authority

2. 2
Distribution of hospital services in the Netherlands
• 131 hospital locations
• 106 locations with facilities for outpatients

3. 3
Number of
providers
2013
General hospitals 82
UMC 8
Independent Focus
clinics
268
Annual spending
on hospital care
2014
Hospitals 18.300 mln. €
Specialists’ fees 2.200 mln. €

4. Health insurance companies
4
Total: 9 health care insurance groups, 26 labels

5. Health care
providers
Health
insurance
Financing HIA
Risk
adjustment
fund
State
budget/Tax
Office
Households
Health
authority
1 2
3
4
5
6
7
8
9
10
1 income dependent premiums
2 subsidies
3 nominal premiums + deductible
4 payments into risk adjustment fund
5 risk equalisation health insurers
6 payments for contract / health care services
7 directives for services of general economic interest
8 compensations for services of general economic interest through
Health Care institute
9 charges for exceeding MoH budget
10 health care services delivered to patients

6. Responsibilities in health care act

7. Basic characteristics
1. Health insurance:
- After 2006, HI no longer required to contract all providers
- diminishing ex post compensations in risk adjustment scheme HI
- In theory unlimited care on individual level (within basic coverage)
1. Regulatory changes:
- Gradual price liberalization since 2005, hospital budgeting system
abolished in 2013
- Hospital care has over 70% free pricing
- Decentralization of investment planning
- Providers bear risk on exploitation of infrastructure
- Influence of HI on capacity and distribution
- In 2012, introduction of services of general (economic) interest in
health care
- Fundamental changes in tariff system (DBC) in 2012
- Collective bargaining (HI) banned under competition law

8. Recent changes in commissioning
1. In commissioning care HI apply minimum requirements as to number of
procedures performed, number of patients treated etc.
2. Small hospitals face problems meeting requirements, forcing them to
close down services, or seek cooperation with other providers.
- Full service small hospitals will probably not survive as independent
providers
- Tendency towards mergers and / or larger hospital organisations
1. Standards are not imposed by MoH, HI can use self developed standards
- Exception: emergency service must be accessible within 45 minutes for
every inhabitant
1. HI plans to reduce number of emergency services shelved by order of
the competition authority (ACM)
2. Commitment to finish annual contracting cycle (t+1) in november (t)
8

9. Financial issues and MoH intervention
1. In 2011, MOH reached agreement with national health care associations
to limit growth in expenditure (2012-2017). Annual growth 1%
- Legislation enabling across the board cuts in revenue
1. Immediate effect on commissioning and contract negotiations
- Agreement serves as guideline
1. Reduction in both growth in expenditure and HI premiums
9

10. Expected changes in near future
1. For 2015 a number of changes are expected:
- Hospitals will be allowed to change into ‘for profit’organisations
- A rise in premiums + deductible
- Change in Health insurance act: consumers loose right to
reimbursement for care by non- contract provider
- Further extension of covered package
- Formerly long term care brought under HIA
1. VGZ announces changes in commissioning policy, hospitals with below
average performance will loose contracts
10

11. Lessons learned (1)
1. Rising premiums and rising HI’s profits are a sensitive issue with public
and politicians alike
2. Nominal premiums are kept in check by competition so far
- But: we don’t know if without the MoH intervention, rise in
expenditure would have been curbed
1. Little discussion about the system as such but HI premiums are means
of income policy and often cause for political debate
2. In hospital care, ‘selective contracting’ still only in infant stage
3. Although HI claim to emphasize quality aspects in commissioning,
hospitals complain that across the board price cuts and lumpsum
contracting are standard practice
4. 2012 changes in tariff system, combined with other changes in system
proved too complex to handle
11

12. Lessons learned (2)
1. There is some concern about the growing power and influence of the
health insurers.
- Monopsony in some regions?
1. Both sellers and buyers show tendency towards concentration
- In some regions, (very) limited choice in providers
- Cause for concern: hospitals and insurers becoming ‘too big too
fail’
- Threat to stability of the system
1. Discussion and compromise on right to choose one’s provider/
physician:
- Restrictive contracting will not apply to GPs
1. Signs of strain:
- Re-occurrence of waiting lists:
- 1 highly specialised provider put new patients on waiting list
- 2 hospitals limited access for HI’s clients, due to contract
issues
12

13. Overall conclusions on commissioning
1. Lack of long term MoH view on capacity and / or regional distribution
- Only minimum standards and broad/global standards on
commissioning / required level of care
1. Maintaining adequate level of services by HI could be problematic in
some areas
2. At the same time, MoH intervenes at every level imaginable, only by way
of informal procedures and agreements
3. Agreements on national level are counterproductive to ‘real’
competition
4. Concentration in the market leads to mutual dependency of HI and
hospitals: both try to avoid risk / loosing market share
5. Disappearance of small providers causes lack of choice
- Little distinction between HI
13

14. 14
Thank you for your attention!
Contact:
Johan van Manen
NZa
Postbus (Po box) 3017
3502 GA Utrecht (NL)
E: jmanen@nza.nl