Thomas White Global Investing
Netherlands
Netherlands Stamp
April 24, 2009
A Postcard from Europe
Netherlands: Healthcare System Inspires the U.S. and Others

The Netherlands has one of the best healthcare systems in the world

The Netherlands was voted as having the best healthcare system in Europe in the Euro Health Consumer Index in 2008. Despite the amount spent on health care in America, a 2008 report by the Commonwealth Fund ranked the U.S. last in the quality of healthcare among 19 countries.

The Netherlands is probably better known for its tulips and windmills, but there is a new facet of this tiny nation that is grabbing attention. Healthcare policies underwent a major overhaul when the Health Insurance Act of 2006 was introduced in the Netherlands after years of formulation and thought. Garnering plaudits, it is now attracting policy makers all over the world, especially in the U.S. The Netherlands has managed to do what has eluded most countries- it has found a way to control costs, and at the same time, provide healthcare to all without compromising on quality.

But the Netherlands was not always on top in terms of healthcare. During the sixties, the Dutch government ended up taking charge of the entire healthcare industry, and in 1971 a special section was established to plan everything from funding to staffing to pricing. But soon, the healthcare system was reduced to shambles as the government tried to curb price hikes by doling out care in small measures. This resulted in staff shortages and huge waiting lists. Wringing their hands in desperation, the Dutch leaders turned to the private sector to bail them out. Today, the Netherlands combines private insurance with universal coverage.

Since 2006, it is mandatory for Dutch citizens to purchase basic private health insurance at a cost of around $130 a month. Additional insurance can be added per individual choice, but a steep fine is enforced if the basic insurance is not purchased. The results have been miraculous. While previously, people were directly insured by the government through an 8.2% tax on workers’ salaries, with the new system, taxes have been slightly lowered. Now, 7.2% is deducted from every worker’s salary and the amount goes to a central Health Insurance Fund that equalizes risk. Households avail of a subsidy through the fund to purchase private insurance, with the size of the subsidy varying according to income level.

The Dutch government proudly points out that the change in system and funding made all the difference. Waiting lists are non-existent now and hospital expenses are well under control. The government even ensures that the basic packages are affordable for everyone, by subsidizing the premium payments for the seven million lower income people who live in this nation of 16 million. In contrast, the current overall health spending in the Netherlands is about 10% of the GDP compared to more than 16% of the GDP in the U.S, which spent an estimated $2.26 trillion in healthcare in 2007. The U.S. has the dubious distinction of having the highest per capita total health expenditures of any country in the OECD.

According to a Commonwealth Fund study, the healthcare policies that are followed in the Netherlands and Switzerland can achieve near-universal coverage at low costs in the U.S., where the restructuring of the current health system is under debate. In fact, of the top 20 healthcare systems in the world, 17 are European, according to the findings of the Canadian Medical Association. All of these top performers follow a public and private partnership model, similar to the Dutch.

It’s not that the Dutch healthcare system is without its share of challenges. A small percentage of people still remain uninsured. Additionally, an estimated 1.5% of the population cannot make their payments and the government has promised to clear these debts through taxes. The biggest hurdle is promising the same standard and quality of care on a consistent basis. To meet this challenge, the government has said that by 2012 it will publish standards to be followed for all hospital treatments. But quality control is not an easy task, especially when medical professionals and institutions are responsible for developing their own quality systems.

However, the benefits of the system far outweigh its deficiencies, if any. The Dutch were able to learn from their past mistakes in universal healthcare and retool their system into a well-oiled machine. What remains to be seen is whether other nations can learn from these same mistakes, and develop systems that actually work.

 

Postcards from Around the World

Israel: Can the “100-day Team” Turn Israel’s Economy Around?

Learn More 

Philippines: OECD Delivers Wake-Up Call

Learn More 

Denmark: Government Woos Foreign Workers

Learn More 





Subscribe to get our global publications by email.



Use of this site signifies that you have read Terms & Conditions
© Thomas White International, Ltd. 2018