The long road to managed competition? Sickness funds and the changes in the Dutch health insurance system, 1941-2006 drs. R.A.A. Vonk Centre for the history.

The long road to managed competition?

Sickness funds and the changes in the Dutch health insurance system, 1941-

2006

drs. R.A.A. VonkCentre for the history of health

insurance,VUmc, dept. Metamedica

Waver, 22 June 2010

Structure

- Centre for the history of health

insurance

- changes in the system of health

insurance, 1941-2006

- the role of sickness funds

Centre for the history of health insurance, dept. Medical Humanities

Centre for the history of health insurance,

funded by:- Ministry of Health, Welfare and Sports- Zorgverzekeraars Nederland- Innovatiefonds Zorgverzekeraars

Main objectives:- research to the history of health insurance, social

security and the welfare state in the Netherlands and elsewhere

- provide information and expand knowledge of (the history of) health insurance, social security and the welfare state

- collect and preserve relevant historical archives (sickness funds, private health insurers, sector organizations, etc.)

Centre for the history of health insurance, dept. Medical Humanities

- Archives: ca. 500 m.

- Documentation: ca. 8000 titles- Health insurance- Health care- Law- Policy- Ethics

Centre for the history of health

insurance

Centre for the history of health insurance, dept. Medical Humanities

A.S. Talma, Minister of Labour (1908-1913)

1913: Sickness Benefits Act passed

1929: Sickness Benefits Act effectuated

Insurance scheme for wage-earners covering the risk of loss of income due to illness

Carried by ‘Raden van Arbeid’ (labour councils)

Sickness funds did not offer ‘sick-pay’ insurance

Centre for the history of health insurance, dept. Medical Humanities

Sickness funds Decree, 1941- German occupying authorities impose a tripartite system:

• compulsory social health insurance for wage earners and their dependants

• voluntary social health insurance for non-wage earners their dependants

• private health insurance

- social health insurance schemes and private health insurance separated by an income threshold

Centre for the history of health insurance, dept. Medical Humanities

The compulsory social health insurance scheme

Centre for the history of health insurance, dept. Medical Humanities

- compulsory enrolment (ins)

- obligatory acceptance (sf)

- income related premiums (ins)

- employer pays half of the premium

- retrospective reimbursement (sf)

- gov. det. package of service benefits

Voluntary social health insurance scheme

Centre for the history of health insurance, dept. Medical Humanities

- open enrolment (ins)

- obligatory acceptance (sf)

- community rated premiums (sf)

- no retrospective reimbursement

- gov. det. package of service benefits

Changes and Additions, 1950-

1970- 1951: DGVP/IZA public insurance for civil

servants

- 1957: SHI scheme for the elderly (65+)

- 1968: AWBZ (Exceptional Medical Expenses Act)- National insurance against:

- long term care (including nursing home care),- psychiatric care- care for the mentally and physically disabled

Centre for the history of health insurance, dept. Medical Humanities

SHI scheme for the

elderly

General fund compulsory scheme

Government contributions

Centre for the history of health insurance, dept. Medical Humanities

- open enrolment

- obligatory acceptance

- age-limit: 65 or older

- income threshold linked with state-pension plan

- premiums covered ¼ and ½ of the estimated expenses

- premium shortfall replenished by government and General Fund.

- dependants insured free of charge

Centre for the history of health insurance, dept. Medical Humanities

Share of the Dutch population covered by various healht insurance schemes, ca. 1965

Social Health Insurance; 63%

Uninsured; 2%

Private Health Insurance; 30%

Public Insurance; 5%

Elderly and voluntary social health insurance, 1970-1980

- a worsening economic crisis forces the Den Uyl (1973-1977) government to invest heavily in premium reduction schemes for the elderly

- low risks leave voluntary health insurance scheme in great numbers (risk skimming, crowding in)

- voluntary social health insurance scheme failed due to weak financial basis

Centre for the history of health insurance, dept. Medical Humanities

J.P. van der Reijden, State Secretary of Health (1982-1986)

- WTZ (Health Insurance Access Act)

- MOOZ (Act on the Co-funding Over-representation Elderly Sickness fund Insured)

- Strict separation Social Health Insurance and Private Health Insurance

- meant as a ‘temporary measure’

Centre for the history of health insurance, dept. Medical Humanities

The WTZ and reform of the elderly social health insurance scheme, 1982-1986- Both elderly- and voluntary social health

insurance were dissolved

- The membership base of the elderly social health insurance scheme was transferred to the compulsory social health insurance scheme

- Regulating the private health insurance sector- Standard private health insurance policy- Obligation to accept everyone for this policy

- Act on the Co-funding Over-representation Elderly Sickness Fund Insured (cross-subsidization)

Centre for the history of health insurance, dept. Medical Humanities

Managed competition?

- 1987: Dekker Committee - ‘Willingness to change’

- One national insurance scheme - Fixed basic insurance (85% Sickness

funds/AWBZ) - Supplementary insurance- Competing risk bearing insurance carriers- Mixed system of income related and nominal

premiums

- 1990’s: Dekker-plan deemed ‘too revolutionary’ and consequently mothballed

Centre for the history of health insurance, dept. Medical Humanities

State secretary of Health, H.J. Simons (1989-1994)

Minister of Health, J.F.

Hoogervorst(2003-2007)

Zorgverzekeringswet 2006

- basic insurance (90% SHI) + suppl. ins.

- legal obligation to buy insurance/ accept

appl.

- fixed max. premium and compensation

- ban on premium-differentiation

- no income limit

- competing risk bearing carriers

- risk-equalization scheme (retrospective)

Centre for the history of health insurance, dept. Medical Humanities

Changing role of sickness

funds?- Sickness funds have shown an impressive ability to adapt to changing situations

- Sickness funds were the driving force behind market-oriented changes in the health insurance system

Centre for the history of health insurance, dept. Medical Humanities

Adaptability: 1941 Sickness funds faced a sudden loss

autonomy

- 1941: maintain voluntary insurance scheme

- 1942: successful introduction of supplementary ins.

- 1947: sickness funds start penetrate private health insurance through bovenbouw-insurance

- 1947: sickness funds gain strong foothold in Sickness Fund Council

Centre for the history of health insurance, dept. Medical Humanities

Bovenbouw-insurance

Centre for the history of health insurance, dept. Medical Humanities

Bovenbouw-insurance

Sickness fund A Sickness fund B Sickness fund C

Private Health Insurance

Social Health Insurance

Income threshold

- acquisition

- administration

- board

Centre for the history of health insurance, dept. Medical Humanities

Type / Year 1950 1955 1959 1960 1965 1970 1975 1980 1985 1986

Commercial 57 43 35 42 40 36 36 33 29 25

Mutual 35 29 25 26 25 25 25 27 33 32

Bovenbouw 8 28 40 32 35 39 39 40 38 43

Total 100 100 100 100 100 100 100 100 100 100

Source: F.T. Schut, Competition in the Dutch health care sector (1995) 139.

Market share of health insurance carriers in percentages, 1950-1986

Percentage of the Dutch population covered by various health insurance schemes, ca. 1980

Bovenbouw Insurance; 13%

Social Health Insurance; 63%

Private Health Insurance; 19%

Public Health Insurance; 5%

Centre for the history of health insurance, dept. Medical Humanities

H.J. Anbeek (1918)

- 1945: Sickness fund ANOZ

- 1962: secretary KLOZ

- 1980: Chairman Vereniging van

Nederlandse Ziekenfondsen

- 1980: Treasurer V.G.C.N.

Centre for the history of health insurance, dept. Medical Humanities

Sickness funds and Bovenbouw-

insurance - Strong alliance with private health insurers against

‘Nationalization’ (1955, 1968, 1977, 1986, 1992)

- Market-oriented proposals (1950 – 1971 – 1984)

- ‘socializing’ private health insurance

- 1992: merging of sickness funds and bovenbouw

resulting in large conglomerates (Achmea, CZ, Menzis,

Univé, VGZ)

Centre for the history of health insurance, dept. Medical Humanities

2006: clean sheet?

Centre for the history of health insurance, dept. Medical Humanities

- basic insurance = sickness fund insurance

- strong position supplementary insurance schemes

- market orientation => bovenbouw

- financial responsibility from 1990 onwards

Thank you, for your attention