FROM F ACT TO FOCUS Annual Statement of the Dutch Healthcare System FROM FACT TO FOCUS 2013 Annual Statement of the Dutch Healthcare System 2013

Transcription

1 FROM FACT TO FOCUS Annual Statement of the Dutch Healthcare System 2013

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3 FROM FACT TO FOCUS Annual Statement of the Dutch Healthcare System 2013

4 1The Dutch healthcare system in Challenges for Facts and figures DUTCH HEALTHCARE AUTHORITY 2

5 Content The Dutch healthcare system in Visible changes 6 Top 5 questions in Health insurance premiums dropped for the first time in Expenditure on health care Statement of the Dutch healthcare system in Improvements in funding 20 Standard income 21 Expenditure on long-term care in figures 23 Supervision in long-term care in Curative healthcare 32 Challenges for Challenges for Challenges for long-term care 50 Challenges for curative healthcare 50 Challenges for the health insurers and healthcare administration offices 51 Challenges for the legislators 51 Challenges for the NZa 52 Challenges for the consumer 52 Facts and figures 55 The state of the curative healthcare market 56 The health insurance market 58 Medical specialist healthcare 60 Curative mental healthcare 63 Primary care 65 The state of the long-term healthcare market 67 International comparisons 69 Legislative changes in Research papers of the Dutch Healthcare Authority 72 Introduction Every year the Dutch Healthcare Authority (NZa) publishes the Annual Statement of the Dutch Healthcare System, an overview of the developments in health care. Once again, we will be presenting an overview of the facts in this edition for What is the status of the public interests of affordability, accessibility and transparent information in long-term and curative healthcare? We will be focusing on a number of key developments. What do the figures say? What barriers do we see in current legislation and regulations to keeping health care affordable, accessible, of high quality and transparent? Additionally, we will focus on a number of personal situations. What do the developments in health care mean for Mrs Janssen, who is 89 years old and recently moved to a care home? And how do Mr Wouters, who is waiting for a knee operation, and Mr Van Dijk, who has COPD and diabetes, choose the right healthcare provider and the right health insurance? In this edition we will portray various people and provide an answer to their issues. We asked healthcare experts for their response to the developments and the meaning of the figures. And naturally we will zoom in on next year: what focus is needed in the healthcare sector in 2014? Based on the actual developments, we will present an overview of the key challenges for the consumer, the health insurers, the healthcare providers, the legislators and for ourselves as supervisor and regulator for health care. DUTCH HEALTHCARE AUTHORITY 3

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7 1The Dutch healthcare system in 2013

8 Visible changes In 2013, the effects of the changes in health care, which were envisaged in 2006 when the system was changed, became tangible for healthcare providers and policyholders. Health insurers have been subject to greater financial risks since last year. This affects healthcare procurement because health insurers no longer buy all treatments everywhere, but rather employ selective contracting to determine which healthcare providers they use for certain treatments. The effect of this selective contracting policy can mainly be seen in the primary care sectors with deregulated rates and/or deregulated services: physiotherapy, remedial therapy, dietary advice, pharmacy and primary psychological care. The insurers are responsible for the costs in these areas either falling or remaining unchanged, while patient satisfaction remains high and access to health care remains good. Health insurers are not yet or hardly providing their policyholders with information about how they distinguish between providers when buying health care. This process should be more transparent in order to help consumers choose a healthcare provider and choose the healthcare policy that suits their wishes best. Health insurers are also making more of a distinction between healthcare providers already in curative mental healthcare, General Practitioner (GP) care and medical specialist healthcare. In 2012 and 2013, the agreements between the trade organisations and the Minister of Health, Welfare and Sport (VWS) have mainly been decisive in healthcare procurement in these sectors. In long-term care, initial steps have been taken in 2013 to control the huge growth in healthcare costs. Last year, we showed in the Annual Statement of the Dutch Healthcare System that the costs for long-term care are growing much faster in the Netherlands than in neighbouring countries. In 2013, initial steps were taken to return the Exceptional Medical Expenses Act (AWBZ: long-term care) to the core for which it was once intended: a national health insurance for vulnerable people who require long-term care. Cost-awareness of policyholders is increasing It has been evident in 2013 that the cost awareness of policyholders is increasing: at the end of 2012, there were once again more people than in previous years who switched to another health insurer. One factor is that patients have had to pay more directly themselves, not least because of the increased deductible: this ensures that policyholders realise that health care is not free. The NZa has been receiving an increasing number of questions from consumers about their healthcare invoices. Figures from the NZa also indicate that consumers are trying to save on their health insurance. More and more people are opting for a voluntary deductible. Furthermore, the number of supplementary insurance policies sold dropped in 2013: just over 85% of all policyholders now have supplementary health insurance and only 9% of policyholders still opt for the more expensive reimbursement policy. In every care sector, with the exception of pharmacy and primary psychological care, total expenditure to date has increased every year. Analyses by the NZa show that the cost increase in curative healthcare is not caused by an increase in the number of patients, but by an increase in the number of treatments per patient and by the use of more expensive or more intensive treatment techniques. DUTCH HEALTHCARE AUTHORITY 6

9 The Dutch Healthcare Authority The Dutch Healthcare Authority (NZa) is the regulator for the healthcare market. In its role as regulator, the NZa sets rates, services and budgets where necessary. Wherever it can, however, it avoids imposing regulations in order to allow insurers and healthcare providers themselves to negotiate the content, price, quality and efficiency of the health care to be provided. The NZa advises the Minister of Health, Welfare and sport on the rules needed in the healthcare sector and identifies possible inconsistencies and obstacles. The recommendations of the NZa are based on facts, research data and analysis. As regulator, the NZa monitors the three public interests in health care: Transparent information Clear information on the content of the health care offered, on the quality of the health care and on its price is essential for sound healthcare procurement by insurers and for the selection process where the policyholders are involved. The NZa imposes transparency obligations on insurers and healthcare providers, and can take enforcing action if they fail to meet these obligations. Accessibility Health care must be accessible. This means that people must have access to the right health care within a reasonable travelling distance, a reasonable time and subject to reasonable conditions. Legal standards have been set for some kinds of health care (acute care, for example). The NZa assesses, per sector, whether the accessibility of the health care continues to be adequate and advises the Minister in the event of any problems. Affordability Health care must remain affordable. The premium for the basic insurance must remain affordable and we must keep control of the collective costs. Both now and in the future. Healthcare providers must correctly claim the care provided and health insurers and healthcare administration offices must check these invoices. Clear choices are also required: what care is considered necessary basic care, what is the consumer s own responsibility and how can we ensure that health care not only continues to be of good quality but is also provided as efficiently as possible? DUTCH HEALTHCARE AUTHORITY 7

10 Top 5 questions in 2013 The NZa Information Line/Reporting Centre receives about 18,000 questions each year, half of which come from consumers and the other half from healthcare providers, patient associations, trade organisations and insurers. The NZa processes the answers to these questions on its website. The five subjects on which the NZa received the most questions in 2013 were: 35% Is my healthcare invoice correct? Mental healthcare: the time recorded on the invoice is longer than my actual treatment time. Hospital care: the invoice for my treatment is very high. Dental care: are the codes invoiced by my dentist correct? Pharmacists: is the surcharge for a box of medicine correct in relation to the price? 20% My healthcare invoice The rules What are the rules? How do I file a complaint against my healthcare provider? When can a hospital register a nursing day and when can they register an IC day? What constitutes an outpatient visit and what is day treatment? I received my invoice this year, but my deductible from last year applies to this invoice. Is that correct? How do I become a healthcare provider under the Exceptional Medical Expenses Act (AWBZ: long-term care)? How can I claim a budget? The provision of information by healthcare providers, health insurers and healthcare administration offices to consumers Care under the Exceptional Medical Expenses Act (AWBZ, longterm care): what is a healthcare administration office and how can I contact them? Mental healthcare: I did not know whether my care was primary or secondary - I only saw that on my invoice. Hospital care: the hospital does not want to tell me in advance how much the treatment will cost. Insurers: the insurer does not provide me with enough information about how medicines are purchased and what the prices are. The application of the legally set basic insurance package and deductible excess by the health insurer and healthcare administration offices What care is reimbursed based on the basic insurance and AWBZ (long-term care)? I only now received a invoice for my deductible for previous years ( ). I do not agree with the reimbursement from my insurer or healthcare administration office: can the NZa intervene? I received health care abroad and have now received a different invoice: what are the rules? Other 15% 10% 20% Provision of information Basic insurance package and deductible Other questions When are new rules and/or forms announced? The NZa has conducted a cost price review: what does this mean for the rates and how was the calculation performed? DUTCH HEALTHCARE AUTHORITY 8

11 Health insurance premium dropped for the first time in 2013 In 2013, the average health insurance premium dropped for the first time in years, even though there were various package measures, as a result of which more health care was transferred to the Health Insurance Act 1. Figure 1. Average health insurance premium per insurance year in EUR What reports does the NZa receive? The NZa receives reports about possible abuses from consumers, insurers, healthcare providers, other supervisors and political parties via the contact point at and via the Information Line/Reporting Centre. Figure 2. Number of reports received by the NZa is increasing Source: NZa Health Insurance Market Scan 2013 This drop in the health insurance premium in 2013 by 13 net was made possible by the positive results posted by health insurers, which were partly due to purchasing health care more selectively. The positive results posted by insurers led to an average drop of 117 per policyholder. Due to package changes and increased healthcare expenditure, another 104 was added per policyholder. More freedom of choice If health insurers achieve positive results, for instance by selectively purchasing health care and medicines, they can make a greater distinction between the policies. This gives the consumer more freedom to choose which package of care suits him best. 1 NZa, Health Insurance Market Scan Jan until July In the first six months of 2013, the NZa had already received more reports than in all of The reasons for this may be that more people now know about this contact point and that people are becoming more alert regarding healthcare invoices, due to the increase in people s own payments and the recent debate about suspicions of healthcare fraud. Most reports in 2013 have concerned treatment that may be too expensive or suspicions of incorrect claims in hospitals (401 reports). A lot of reports are also received about mental health care, which often concern excessive invoices. Many reports are also about unclear information, especially regarding hospital treatments, their price or the reimbursement by insurers (115 reports). In 2013, the NZa also received reports about the reimbursements or provision of information by insurers (91 reports) and about dental care (41 reports, plus 50 reports about a specific healthcare provider). The reports help to determine priorities in supervision. Based on the reports about incorrect payment titles and upcoding, the NZa paid extra attention to correct claiming in medical specialist health care, mental health care and home care in This will remain a priority for 2014, in addition to transparency in pharmacy and the provision of information by health insurers. DUTCH HEALTHCARE AUTHORITY 9

12 Eitel Homan: Tackle healthcare fraud systematically. In 2013 the debate on healthcare fraud reached a peak. The NZa too received more than two hundred reports in the spring of 2013 from patients who suspected that their hospital healthcare invoices were incorrect. Eitel Homan, Member of the Executive Board of the Dutch Healthcare Authority Health insurers have a pivotal function in detecting healthcare fraud. Eitel Homan: This may sound strange, but it is a sign that the healthcare system is starting to work. In the past, healthcare providers would receive a bag of money based on the size of the organisation. The care provided for that money could not or could hardly be identified. Now healthcare providers have to invoice the care they actually provided. Because health insurers and patients are checking their invoices more and more thoroughly, it has now been revealed that treatments invoiced are sometimes too expensive, or that treatments are invoiced that have not been provided. We are therefore happy with all the reports we receive on this subject from patients and insurers. Incidentally, most cases do not constitute actual fraud: out of the two hundred reports we received and investigated in the early part of 2013, there are serious suspicions of incorrect invoices in about ten cases where we have contacted the hospitals and insurers involved. The rest of the invoices eventually proved to be in line with the rules but the invoices were not clear enough, or patients themselves believed the invoice was too high, even though it turned out to be correct. The healthcare provider, the health insurer or the healthcare administration office, the NZa, the Public Prosecution Service (OM) and the Fiscal Intelligence and Investigation service (FIOD), the legislators, the patients themselves: everyone can contribute to the identification and prevention of fraud and wasting of healthcare funding. DUTCH HEALTHCARE AUTHORITY 10

13 Healthcare providers must use public resources sensibly and efficiently; must invoice correctly; must inform patients in advance and clearly whether the treatment is insured or not and whether they have a contract with the health insurer; must inform patients in advance and clearly what care they provide and at what price; administrators, internal supervisors and trade organisations have a leading role: they must promote the fact that they will not tolerate incorrect invoices and must provide clear medical guidelines. Health insurers and healthcare administration offices have a pivotal function in the detection of fraud or incorrect invoicing in health care; have a database containing all invoices; should therefore check which healthcare providers perform more or more expensive treatments than average and question them about this; should check whether the care on the invoice has actually been provided; should claim money back from healthcare providers who send incorrect invoices; should systematically tackle the issue by purchasing no care or less care from healthcare providers who invoice incorrectly or invoice too much. The Dutch Healthcare Authority simplifies and tightens the rules if possible and properly informs healthcare providers about what is allowed and what is not allowed when invoicing healthcare costs; supervises health insurers and healthcare administration offices on a structural basis and measures annually whether they are implementing the law correctly and are checking invoices correctly. If this is not the case, the NZa will perform an interim check to see if things have improved; imposes sanctions on insurers if they do not perform checks with sufficient intensity; > in 2012, the Regularity Audit of Health Insurers revealed that certain health insurers should be checking more proactively and more intensely. In 2013, four health insurers are subject to an enforcement process. In 2014, the NZa will start publishing the names of health insurers that do not perform enough audits; imposes sanctions - such as an instruction, incremental penalty payment or a fine - on healthcare providers where abuse occurs on a systematic basis > last year the NZa investigated parts of the accounts at two major hospitals and two mental healthcare organisations, as there were strong suspicions of systematically incorrect invoices. If the investigation of the accounts proves that the suspicions were justified, the NZa will take enforcement measures; collaborates with the Netherlands Authority for the Financial Markets (AFM) to be able to act as well if external auditors fail to properly audit the financial statements of health insurers and healthcare providers; discusses reports of healthcare fraud with the Public Prosecution service (OM) and the FIOD: sometimes criminal prosecution is required instead of proceedings under administrative law; will investigate the overall scale of healthcare fraud in all sectors in 2013 and 2014; investigates the invoicing systems for each healthcare market to check for regulations that are especially susceptible to fraud. Patients can check the correctness of healthcare invoices using the paper overview or their health insurer s website; can ask the healthcare provider and then the health insurer for clarification if anything in the invoice is unclear; can report suspicions of abuse to their health insurer and to the NZa; should ask before a treatment what the treatment costs, whether the care is insured and whether there is a contract with their health insurer. The legislators/healthcare Insurance Board (CVZ) must describe healthcare entitlements as clearly as possible; must eliminate anything that is unclear about the reimbursement of non-contracted care. DUTCH HEALTHCARE AUTHORITY 11

14 Hans Feenstra about the question: How do we improve internal governance at the hospital and ensure that incorrect invoices are not done? An interesting subject. Before I talk about arrangements to improve the situation, it is most important to uncover the cause of alleged large-scale fraud in health care. I am absolutely convinced that one of the most important reasons for invoicing errors is the never-ending flow of changes in recent years. Since 2006, the changes have been arriving one after the other, creating a jungle of administrative rules for practitioners and their supporters which they are having to navigate their way through with a machete. There has not been one year without major changes to funding. All of these changes have been silently absorbed by hospital administrators and by insurers. Policymakers such as the Ministry of Health, Welfare and Sport and also organisations such as the NZa lack insight into the effects of their changes in the field. Furthermore, there is too much room for interpretation for people completing invoice forms. The vast majority of incorrect invoices are the result of this room for interpretation. As the Chairman of the Board of a hospital, I believe that real fraud should be tackled through criminal prosecutions. To me, the ideal situation for reducing the number of incorrect invoices in the future is made up of a number of arrangements: Hans Feenstra, Chairman of the Executive Board of Martini Hospital Invest in a strong grouper and a healthy culture. 1. Further improvement of the grouper. The best thing would be for the grouper to filter out all the incorrect invoices. Now each hospital sets up its own audit system before the invoices go to the grouper. And after the entire invoicing process is complete, an extensive material audit is also performed by the insurer. This means that invoices are audited three times! 2. A healthy culture in an organisation where competent and trustworthy behaviour is the point of departure. I do not believe in the fraud-detection role of the health insurer in the long term. Invest in a strong grouper and a healthy culture! DUTCH HEALTHCARE AUTHORITY 12

15 Dirk Pons about the role of the health insurer in the fight against healthcare fraud Dirk Pons, Director of healthcare, DSW Zorgverzekeraar The Christmas tree of GP funding should be taken down. Health insurers have an important role to play in checking for and fighting to prevent unsuitable use, abuse and fraud. This is also an obligation on the policyholders, because they should be able to assume that their premiums are well spent. DSW therefore performs intensive audits. The link between data analysis and care-specific expertise is important for the specific audits, as well as a general audit of the books. A Special Investigation Department has also been set up. It is managed directly by the Chairman of the Executive Board. Apart from our own efforts, other parties should also take up their responsibilities. The Health Insurance Board (CVZ), for example, must clearly define the entitlements, eliminating any differences of interpretation. The funding method also provides an opportunity for and encourages upcoding and inappropriate use. The Christmas tree of General Practitioner funding should be taken down, but it seems that any plans to do so have little chance of success. Process extension and upcoding will remain possible, even after the introduction of the DOTs for medical specialist health care. New entries to mental health care can start soon after and the easily granted admission under the Care Institutions (Accreditation) Act (WTZi) appears to be a licence to submit an invoice at one s own discretion. Both the time registration categories and partial services with an admission are examples of supply control and encourage upcoding. Clinical treatments are performed when the medical need for them is lacking. Invoicing behaviour is not derived from the seriousness of the demand for care. The use of specialist personnel is often marginal, but there are no standards in this regard. A co-production by the various parties is needed... DUTCH HEALTHCARE AUTHORITY 13

16 Expenditure on health care On average, we are spending 5,087 on collectively insured health care per adult in This is done via the nominal premium under the Health Insurance Act (Zvw), the AWBZ (long-term care) premium, taxes, the income-dependent Zvw contribution and by personal payments 2. In 2012, we spent over EUR 36.2 billion in the Netherlands on curative healthcare, including curative mental healthcare. This is an increase of 0.5% compared to In 2013 we are expected to spend EUR 40.6 billion. Figure 3. Overview of expenditure for curative healthcare (Health Insurance Act) in billions of EUR , Source: Statistics Netherlands (CBS) In 2012, we spent a total of almost EUR 28 billion on long-term care (AWBZ) in the Netherlands. This amount includes the costs for personal budgets ( PGB ). In 2013 we are expected to spend a total of 27.3 billion euros on long-term care. Figure 4. Overview of expenditure for long-term care (AWBZ) in billions of EUR 27, Source: Statistics Netherlands (CBS) 2 Government budget 2014, XVI Health, Welfare and Sport, p DUTCH HEALTHCARE AUTHORITY 14

17 Ostrich Rutger Bregman, historian and columnist A Member of Parliament recently told me: Hardly anyone dares to start a debate. This is disastrous as far as communication is concerned. This comment is followed by a comparison with the integration debate in the 1990s. Whoever starts a real debate about health care is finished! If you ask people in the Netherlands what we should be cutting back on, they say international development and culture first. You can easily cut 20 billion there. The only problem is that that cut is three times the amount we actually spend on those areas. Health care is the only area where there should be no cuts, people continue, because there are so many cutbacks there already. The only problem is that health care is the only public sector that continues to grow, year after year. If cutbacks do have to be made, we believe that there are billions just lying there waiting to be cut, in the form of unnecessary managers and unnecessary health care. As regards the first point, the Bureau for Economic Policy Analysis (CPB) wants to allocate 0.1% of the healthcare budget for that purpose. The second answer is also popular among politicians. There is a rich (American) tradition of consultants who promise huge increases in efficiency, as long as we stop all the pointless care. Former Minister Ab Klink used to talk about 8 billion over three times the amount we spend on culture. This will never do. Dutch healthcare is the second most expensive in the world, without any demonstrable health benefits. Other public sectors, such as education, are being crushed by a sector where there is no such thing as enough. As long as the true healthcare debate from putting a price on an extra year of life to ruthless budgeting is not held openly, the costs will continue to rise. Photo: Keke Keukelaar DUTCH HEALTHCARE AUTHORITY 15

18 Statement of the Dutch Healthcare System in 2013 Figure 5. Characteristics of the Dutch healthcare market The curative healthcare market (Zvw) The long-term healthcare market (AWBZ) Health insurance market: Consumers are required to take out the basic insurance package under the Zvw, making a choice between competing insurers. Primary Curative mental healthcare: healthcare: GP care Outpatient Dental care mental healthcare Physiotherapy and the first 365 Pharmacy days of admission Obstetrics and as part of a course maternity care of treatment Speech therapy Dietary advice Occupational therapy Remedial therapy Primary psychological care Ambulance services Care pathway Medical specialist healthcare: Hospitals Specialised institutions Independent treatment centres Medical specialists No health insurance market: Per region (there are 32 regions in total) a care administration office implements care under the Exceptional Medical Expenses Act (AWBZ) on behalf of all health insurers for all individuals who need long-term care in the region in question. Clients cannot choose from competing insurers. Market for admitted longterm care: Market for outpatient care: personal care, nursing, personal care, nursing, supportive care and treat- supportive care, treatment ment at home for the elderly, in combination with disabled people and people admission to an institution with a psychiatric disorder/ for the elderly, disabled disability people and people with a psychiatric disorder/disability DUTCH HEALTHCARE AUTHORITY 16

19 Figure 6. Statement of the long-term healthcare market (AWBZ) Compulsory national health insurance aimed at care, nursing, support and treatment if there is no chance of recovery. The people needing care are the elderly, the handicapped and people with psychiatric disorders/disabilities. Five entitlements: personal care, nursing, support, treatment and admission. Independent needs indication 3 and in some cases a choice for the client between non-monetary care or personal budget care. The 32 healthcare administration offices run no risk with regard to the long-term care expenditure. The Ministry of Health, Welfare and Sport (VWS) determines the size of the insured package and the annual macro budget: the contracting scope. e. Per region (there are 32 regions in total) a healthcare administration office implements the care under the Exceptional Medical Expenses Act (AWBZ: long-term care) on behalf of all health insurers for all individuals who need long-term care. Market for outpatient long-term (AWBZ) Market characteristics In 2012 around 590,000 people received an indication for outpatient long-term care. This is a reduction compared to previous years. Out of all the people with an indication, 18.8% opted for PGB in The number of people opting for a PGB is decreasing. In 2012, a total of 1,461 healthcare providers were actively providing a form of outpatient s long-term care. For each care administration office region, there was an average of 46 healthcare providers. Fully integrated maximum rates per hour or part of the day have been in effect since Market for admitted long-term care (AWBZ) Market characteristics In 2012, around 263,000 people received an indication for admitted long-term care. This number has remained more or less the same in recent years. Out of all the people with an indication, 4.6% opted for a PGB in The number of clients opting for a PGB is increasing. In 2012, 791 healthcare providers offered admitted long-term care (excluding mental healthcare). The average was 25 healthcare providers per care administration office region. Bandwidth rates per care intensity package apply. State of the market In the years ahead the Exceptional Medical Expenses Act (AWBZ: long-term care) will be reduced to a core AWBZ (long-term care). The number of healthcare providers has increased in recent years. In 2012 an experiment was conducted at two healthcare administration offices to give self-employed persons without staff a contract. As of 1 January 2013, this has been possible at all healthcare administration offices. State of the market In the years ahead the Exceptional Medical Expenses Act (AWBZ: long-term care) will be reduced to a core AWBZ (long-term care). In admitted long-term care (excluding mental healthcare) the concentration level is high and stable. 3 The needs indication is increasingly mandated to the healthcare provider. DUTCH HEALTHCARE AUTHORITY 17

20 Figure 7. The state of the curative healthcare market (Zvw) All Dutch citizens with the exception of conscientious objectors have obligatory insurance under the Health Insurance Act (Zvw). The Minister of Health, Welfare and Sport (VWS) determines the scope of the basic insurance package. Health insurers are required to purchase health care efficiently so that they can compete on the health insurance market. Health insurers have an obligation to accept and are not allowed to refuse people for the basic insurance. This obligation does not apply to group insurance. Health insurance market Market characteristics A concentrated market with 26 risk-bearing health insurers divided across 9 insurance companies in The four largest insurance companies have a combined market share of 90% in A new health insurer is expected to start in Insurance policies are offered on a non-monetary basis (i.e. in kind) and on a reimbursement basis and as a combination of the two. The number of non-monetary policies that are available is increasing. The number of non-monetary policyholders increased in It appears that policyholders do not deliberately choose a certain type of policy; they tend to opt for a low premium. 36% of policyholders do not know what kind of policy they have. Health insurers are allowed to make a distinction between the fees for healthcare providers with and without contracts. The number of policyholders that can claim full compensation when using non-contracted health care has been falling since State of the market More people have switched insurers every year since In 2013, 8.3% of policyholders (about 1.4 million people) switched to another health insurer, compared to 6% in the previous year. The average nominal premium paid (including group discounts) fell from 1,226 in 2012 to 1,213 in Health insurers have been achieving positive operating results for their basic insurance since 2009 (excluding investment results). In 2012, the average operating result per policyholder for basic insurance was approximately 82. Medical specialist healthcare Market characteristics In 2013 there are: 80 general hospitals 2 specialised hospitals 8 university hospitals 65 specialised institutions 255 independent treatment centres There are 26 recognised specialisms. DUTCH HEALTHCARE AUTHORITY 18 Curative mental healthcare Market characteristics In 2010, approximately 924,000 clients used secondary mental healthcare, while 327,000 clients used primary mental healthcare. The overall growth is 16.5%. In 2011, 4,179 psychological care providers worked in primary mental healthcare as wells as 107 other healthcare providers (especially psychiatrists and general remedial educationalists).. Primary healthcare Market characteristics In 2011, 72% of Dutch citizens had contact with their GP at least once. Part of primary care is subject to (maximum) rates, for example, maternity care, obstetrics and speech therapy.

21 (Continued) The State of the Curative Healthcare Market (Zvw) Medical specialist healthcare Curative mental healthcare Market characteristics (continued) Mental healthcare providers with admission based on the WTZi 4. In 2012, there were 178 budgeted institutions 5. For primary psychological care, there are services (consultations) with liberalised prices. The budgeted providers are subject to a transitional model in 2013, after which they will be funded based on DTCs ( diagnosis-treatment combinations ) in The other mental healthcare providers are already funded based on DTCs. Primary care Market characteristics (continued) GP care has maximum rates for consultations and visits, a registration rate per patient and liberalised rates for activities related to modernisation and innovation. Liberalised prices apply for physiotherapy, remedial therapy, dietary advice, care pathway, primary psychological healthcare and pharmacy. As of 2013, regulated rates apply once again in dental care. State of the market The increase in revenue for the A+B segment was 3.4%. This growth is lower than in previous years. Providers have committed themselves to a limited increase in revenue in agreements with the Minister. The contracting of hospitals by health insurers mainly takes place during the year. A significant number of health insurers make maximum revenue and lump sum agreements with hospitals for the B segment. State of the market In 2013, the deductible introduced in 2012 was reversed. Phasing out of risk equalisation began. All compensation based on past performance will be abolished as of 2015 at the latest.. State of the market Competitive and selective healthcare procurement by health insurers is possible but does not happen in dental care and GP care. In dental care and GP care there is hardly any insight into differences in quality. The funding is suitable for competitive healthcare procurement by health insurers.. 4 Only healthcare institutions that have been accredited pursuant to the Care Institutions (Accreditation) Act ( Wet Toelating Zorginstellingen ) are allowed to offer care. 5 Insufficient details are known about 2012 at the moment regarding the number of primary psychological care providers and the number of (independently established) secondary healthcare providers. DUTCH HEALTHCARE AUTHORITY 19

22 Improvements in regulation Improving healthcare regulation is one of the NZa s key tasks. The way in which health care is regulated has a direct impact on the accessibility, the (transparency about) quality and the affordability of health care. The previous overviews show that we keep spending more money each year on health care in the Netherlands, despite all the measures taken. Making regulations more intelligent and less susceptible to fraud To prevent healthcare fraud, one can act in retrospect and increase the chances of catching offenders, but you can also make regulations and funding structures smarter and less susceptible to fraud in the first place. In 2013, for example, the NZa is checking all existing and new policy rules for susceptibility to fraud and issuing recommendations to make it easier to detect fraud. In 2013, the NZa recommended improving the transparency of healthcare costs for the patient, including by improving the information on healthcare invoices. This improves cost awareness among consumers and improves the checking of invoices to see if they are correct. In 2013, the NZa also recommended shortening the period for finishing treatment in hospitals from a maximum of one year to a maximum of 120 days. This gives healthcare providers, health insurers and patients an earlier insight into the healthcare costs. Allow open access to healthcare data To be able to follow healthcare costs, to benchmark them and to detect fraud, it would be a good idea to make the healthcare invoices currently in health insurers systems more widely available, obviously with protection of privacy. This would allow not only research institutions and healthcare providers, but also, for example, patient associations and consumer organisations to see for themselves what is being invoiced and to create overviews from that data. Drive towards efficient health care In curative healthcare, trade organisations and the Minister make arrangements to limit growth with covenants. One disadvantage of these covenants is that setting growth limits (for example, a maximum increase in turnover of 1.5%) does not lead to increased efficiency. These growth agreements are basically a form of budgeting, used to tell the hospitals: you are not allowed to generate more turnover than x euros. But the rates per treatment can then still be too high and unnecessary treatments can still be performed. The NZa is in favour of setting targets for efficient, useful health care. This makes a ceiling an absolute maximum rather than a right. With these kinds of growth agreements, health insurers may still purchase health care in a targeted and efficient manner, even if this is (far) below the ceiling. Why keep indexing the rates every year? Every year the NZa calculates the fees for health care where fixed or maximum fees apply, such as the A-segment in hospitals, longterm care (AWBZ), part of GP care and birth care. What is especially notable here is that the fees and therefore also the salaries in health care are still being indexed every year. Fixed fees based on standard costs Until now, the NZa has been calculating the fees in health care based on cost audits. These audits map out the differences between healthcare providers income and the costs they incur. These are healthcare providers who independently invoice the health insurer or the patient for healthcare expenses. The current audits therefore map out the costs actually incurred and the amounts earned by healthcare providers who invoice independently. If the total income is higher than the set standard income, the fee is reduced. If the professional practices are left with less than their standard income, the fee is increased. This calculation method may seem logical, but it can also increase costs in certain situations. If providers collectively decide in favour of cost-increasing factors (e.g. higher wages under collective labour agreements or set requirements for accommodation and equipment), these additional costs will result in a higher fee, because all providers will incur these costs. As the regulation DUTCH HEALTHCARE AUTHORITY 20

23 method is based on costs actually incurred, the usefulness and need for these collectively incurred costs are never considered. This disadvantage is not linked to working with standard costs to calculate the fees. This system was introduced in basic mental health care in 2013, by setting a standard amount for the number of treatments, with a separate amount for overheads, accommodation and collective labour agreement wages. In the discussion about this standard, the use and need for the costs determined collectively are explicitly addressed. Standard income The standard income for independent healthcare professionals was once set based on a comparison with the salary scales of civil servants working for the government, because these incomes are paid from public resources. When determining the standard incomes in the 1980s, the following comparison was made, which would result in the following salaries in 2013: medical specialist (scale 16-18): 5,357 to 8,541 6 dental specialist/orthodontist (scale 16): 5,357 to 7,311 GP (scale 14 to 15.2): 4,200 to 6,529 physiotherapists and obstetricians (scale 8, plus a fee for substitutions): 2,280 to 3,082 pharmacists (scale 14): 4,200 to 6,138 Over the course of time, the standard incomes of these professionals have started deviating from these salary scales. By now, the relationships have changed as a result, which is a reason to review whether the current standard incomes still match the points of departure on which they were once based. In 2013, the NZa will start investigations to recalibrate the standard incomes of independent healthcare professionals. How much does the annual indexation of the fees rates cost? Each year the regulated rates, for example, in long-term care, hospitals and primary care are increased by 2.5% to 3% per year 7. This indexation leads to increased healthcare costs. For example: due to this indexation, the costs for long-term care have been rising by about 800 million euros per year - with the exception of Due to this indexation, the costs for hospital treatments in the A-segment rose by about 1.2 billion euros per year until In July 2013, the Minister of Health, Welfare and Sport (VWS) agreed on a maximum growth percentage for the years ahead with hospitals, medical specialists, the mental healthcare sector, GPs, health insurers and patients organisations. The healthcare expenses must not rise by more than 1.5% in 2014 and 1% per year from 2015 to 2017 inclusive. These agreements do not include indexation for salary and price adjustments. In other words, it has been agreed that the fees will remain subject to annual indexation. For other sectors, such as education, police and government officials, the zero line has applied for much longer and salaries are not increased to compensate for inflation. The question as to why this does not apply to health care as well is justified, because this sector is also publicly funded, just like those other sectors. Furthermore, increased efficiency is not taken into account by performing the indexation just like that. Because of this zero line we are implicitly imposing a productivity task on those other sectors. We are not doing that in health care, which at least justifies a discussion about why not. Another disadvantage of the automatic indexation of fees is that any gains in productivity are not immediately reflected in the fees. For example, if dentists can work more efficiently by rearranging tasks and using certain equipment, the indexation will result in higher incomes and profits and the patients will not benefit. A new cost investigation will have to be conducted before this increased efficiency is taken into account in the rates and healthcare providers and patients notice anything of this productivity gain. 6 Gross salary scales from the BBRA 1984 as of 1 January With the exception of 2010, when the percentages were between 1 and 2%. See also DUTCH HEALTHCARE AUTHORITY 21

24 Erik Schokkaert about the statement: Standard costs for treatments are better than the classic cost audit, as the latter pushes the costs up. The hard effects of using standard costs instead of costs actually incurred should probably not be exaggerated. After all, in the latter case the average costs are taken into account when the fees are determined, and each individual healthcare provider will only have a negligible effect on that average. Furthermore, standard costs must also be regularly updated and in practice these adjustments will inevitably also include an analysis of the development of the average actual costs. Despite these nuances, there are good reasons to switch to using standard costs, but these reasons are more of a psychological or social nature. Explicitly arguing in terms of standard costs will increase the cost awareness of the healthcare providers. The basic principle of not all costs incurred being automatically justified from a social perspective is presented better as a result and a real discussion can start about the definition of responsible costs. When setting the fees, this may also lead to more room to take into account the population s willingness to pay for the services provided. That principle is just as relevant in health care as it is in other economic sectors. Erik Schokkaert, Health Economist, Catholic University of Leuven Not all costs incurred are justified from a social perspective. DUTCH HEALTHCARE AUTHORITY 22

25 Expenditure on long-term care in numbers 8 Figure 8. What did we spend on nursing home and care home care? in bilions of EUR 8,6 7,7 7,4 8,6 6, What did we spend on disabled care with accommodation? in billions of EUR 5,2 4,6 4,4 4,2 5, What did we spend on home care? in billions of EUR 3,8 3,3 3,4 4,1 4, What did we spend on long-term mental healthcare 9? in billions of EUR 1,8 1,6 1,8 1,4 1, Analysis by the NZa of the causes of the price increases in long-term care, reference date February 2013, NZa Outpatients Long-Term Care Market Scan (December 2012) figures based on wage and material costs, NZa data 9 NZa Mental Healthcare Market Scan March 2013 and Expected Burden of Curative Mental Healthcare 2012 (June 2013) DUTCH HEALTHCARE AUTHORITY 23

26 Causes of increase in admitted healthcare expenditure Long-term mental healthcare: care expenses have risen by 24.4% in 2 years Figure 9. Turnover development of care intensity packages for nursing and care (V&V) and disabled care (GHZ) in (millions of EUR) % number of client effects % intensification care 1,145 57% price effect Source: Analysis by NZa of the causes of the price increases in long-term care, reference date February 2013 In long-term mental healthcare the increase in expenses was significant in 2012, even more than the year before. Revenue increased by about one quarter in two years. One third of the revenue increase in 2012 was caused by more care being provided and two thirds by the fees being temporarily increased in 2012 due to the intensification funds. In 2013, the fees were once again lower. Shift to outpatient care also started in mental healthcare In long-term mental healthcare, care in protected home environments with support (the C-packages) is growing the most. There is also a strong growth in the Full Home Package. Admitted patient care for people with a lower level of demand for care is falling sharply. This shows that mental healthcare institutions are also taking action to separate living and caring. This figure shows that over half of the price increase in admitted patient long-term care is caused by the increased fees. Apart from the annual indexation, the fees for the care intensity packages were increased by over 600 million euros in 2011 due to the intensification funds. No additional clients were treated for that money. This increase was reversed for admitted patient disabled care and long-term mental health care as of The higher fee has been retained for nursing and care. The increase in the number of clients caused 18% of the increased costs. One quarter of the increased costs is caused by intensification: existing clients who are already receiving care are given an indication for more intense care than the year before. In care for the elderly, care intensification is a logical phenomenon in itself: many elderly people require increasingly intensive care in the final years of their lives. The question here is rightly whether the growth in expenses as a result of care intensification is in line with the demographic developments. The number of clients in admitted patient care rose by 3.2% per year over the period The number of men and women older than 85 in the Netherlands rose by an average of 3.5% per year during this period. The care intensification found is more or less in line with the increase in the number of elderly people. Reforms in long-term care (AWBZ) As of January 2013, people with less demand for long-term care (ZZP1 and ZZP2) have no longer been eligible for admitted patient care. They receive this care in their own homes. The planned reforms in long-term care will go even further in the years ahead: only care for the most vulnerable will still be organised in a core AWBZ (long-term care) system, while the other care and support will be decentralised to the municipalities or be covered under the Health Insurance Act. These transfers will be accompanied by budget cuts. The reforms are radical and will have major consequences for the property and running of existing healthcare institutions that currently provide admitted patient care. The expectation is that this will lead to bankruptcies and other transitional problems in the next few years. In addition, there is a chance that healthcare providers will behave strategically because part of the long-term care will remain a national system and part will be provided locally by the municipalities. If the demand for care remains high, the pressure will continue on the budgets that remain available at the national level: in other words, on the core AWBZ (long-term care). DUTCH HEALTHCARE AUTHORITY 24