The long road to managed competition? Sickness funds and the changes in the Dutch health insurance system, 1941-2006

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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 of health
insurance, VUmc, dept. Metamedica Waver, 22 June
2010
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Structure
Centre for the history of health insurance, dept.
Medical Humanities

• Centre for the history of health insurance
• changes in the system of health insurance,
  1941-2006
• the role of sickness funds

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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.)

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Centre for the history of health insurance
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

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A.S. Talma, Minister of Labour (1908-1913)
Centre for the history of health insurance, dept.
Medical Humanities

• 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

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Sickness funds Decree, 1941
Centre for the history of health insurance, dept.
Medical Humanities

• - 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

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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

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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

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Changes and Additions, 1950-1970
Centre for the history of health insurance, dept.
Medical Humanities

• 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

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SHI scheme for the elderly
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
Government contributions
General fund compulsory scheme
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Centre for the history of health insurance, dept.
Medical Humanities
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Elderly and voluntary social health insurance,
1970-1980
Centre for the history of health insurance, dept.
Medical Humanities

• - 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

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J.P. van der Reijden, State Secretary of Health
(1982-1986)
Centre for the history of health insurance, dept.
Medical Humanities

• - 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

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The WTZ and reform of the elderly social health
insurance scheme, 1982-1986
Centre for the history of health insurance, dept.
Medical Humanities

• - 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
  )

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

• 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
• - 1990s Dekker-plan deemed too revolutionary
  and consequently mothballed

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Minister of Health, J.F. Hoogervorst(2003-2007)
State secretary of Health, H.J. Simons
(1989-1994)
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Zorgverzekeringswet 2006
Centre for the history of health insurance, dept.
Medical Humanities

• 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)

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Changing role of sickness funds?
Centre for the history of health insurance, dept.
Medical Humanities

• - 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

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Adaptability 1941
Centre for the history of health insurance, dept.
Medical Humanities

• 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

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Bovenbouw-insurance
Centre for the history of health insurance, dept.
Medical Humanities
Private Health Insurance

• acquisition
• administration
• board

Income threshold
Social Health Insurance
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Centre for the history of health insurance, dept.
Medical Humanities
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Market share of health insurance carriers in
percentages, 1950-1986
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.
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Centre for the history of health insurance, dept.
Medical Humanities
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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.

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Sickness funds and Bovenbouw-insurance
Centre for the history of health insurance, dept.
Medical Humanities

• 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)

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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 gt bovenbouw
• financial responsibility from 1990 onwards

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Thank you, for your attention