Deficiencies in preoperative process of Dutch hospitals

February 28th, 2007

The IGZ Netherlands Health Care Inspectorate concludes that there are serious deficiencies in the preoperative procedures in Dutch hospitals, caused by shortcomings in the communication between care providers, the composition of patient files and the transfer of patient data. As a consequence, an arm, leg or toe is wrongfully amputed every week. The IGZ calls for standardisation of processes, an electronic patient file system, main responsibility for a patient by only one of the caregivers, and improvement of cooperation between caregivers by writing down and implementing individual responsibilities. This conclusion is based on a survey which they conducted amongst all 94 Dutch hospitals, a study of patient files and interviews held at IGZ visits in 23 randomly selected hospitals. See the IGZ report here (pdf document in Dutch).

The NVZ Dutch Hospitals Association says they already know about the problems and they are in discussion with the IGZ about this topic for a longer time. Therefore, the NVZ is surprised to see that the IGZ brings the news with such strong words. It certainly is not the case that by definition a patient who is operated on will be in danger, in most cases an operation goes well. The NVZ takes the lead to achieve standardization of the preoperative process in Dutch hospitals. See the NVZ reaction here (in Dutch).

The OMS Society of Medical Specialists judges the IGZ news as too far reaching. Problems with paperwork are compensated for by the surgeons in practice who know what they are doing as they know their patients well. The OMS claims that the IGZ report does create fear amongst patients which is not justified and the publication also puts downward pressure on the enthusiasm with which medical specialists want to implement improvements. See the OMS reaction here (in Dutch).

Dutch risk equalization still needs improvement

January 16th, 2007

Current ex-post cost compensations in Dutch risk equalization for health care insurers cannot be built down, the ex-ante risk equalization formula must be improved first. This message is put forward (in Dutch) by the Dutch Patients and Consumers Federation (NPCF) based on the research report “Risk equalization in health insurance: an evaluation and routes to improvement” (available for download in Dutch here). The research has been conducted by the Institute of Health Policy and Management of the Erasmus University Rotterdam (NPCF). The authors of this report are Drs. P.J.A. Stam and Prof.Dr. W.P.M.M. van de Ven, the latter being a leading international authority on risk equalization and managed competition in health care.

In this research the ex-ante risk equalization formula in 2006 is evaluated. For the first time, calculations are based on actual expenditures of a group of 18,000 insured people. A more realistic picture is thus created than on the basis of expectations, as happened in earlier studies.

Risk equalization is one of the pillars under the Health Insurance Act 2006, under which all Dutch citizens are mandatory insured for basic health care. A good system of risk equalization prevents indirect risk selection of certain subgroups of insured people and stimulates insurers to contract desired care for people with a chronic disorder. When the system works not well and insurers are insufficiently compensated, then insurers have an incentive to keep out predictably loss-making customers. Such customers are also not interesting enough for collective contracts. Relevant data in this respect, such as hospitalisations in the last five years and a rank list of insured people who made costs, can easily be obtained by insurers from their own claims administrations.

The researchers conclude that, for specific subgroups of insured people, insurers still lose strong predictable losses of hundreds of euro’s per person per year. At the top of the list, there are insured people who both visisted a medical specialist and took prescribed medecines a year before. They are followed by the subgroup of insured people who visited a medical specialist last year. On the third place, there comes the quarter of insured people who had the highest medical expenses for five consecutive years. Many people with a chronic disorder satisfy one or more of these selection criteria. On the other hand, there are also subgroups of insured people who are predictably profitable. That holds especially for people who never belonged to the quarter of insured people with highest medical expenses in the past five years and for those who were never hospitalized in the past five years.

Although the Netherlands have the most sophisticated ex-ante risk equalization formula in the world, improvement remains necessary. Dutch government does its best to refine the risk equalization formula, but there is still a long way to go. Risk equalization such that all chronically patients are sufficiently compensated will certainly last many years to come.

Because the ex-ante risk equalization formula is still insufficient, Dutch insurers already receive specific ex-post cost compensations based on their actual expenditures. These compensate for approximately half of their losses. However, the Dutch Minister of Health quickly wants to abolish these ex-post reimbursements. Under this scenario, chronically ill patients will become less attractive as insured.

The NPCF urgently appeals to the Dutch Minister of Health not to abolish the ex-post compensation mechanisms before the ex-ante risk equalization formula is adequate. “Do not turn chronic patients into undesirable customers!”, according to the NPCF.


Dutch insurers partner with Goldman Sachs

January 5th, 2007

The Dutch health insurer called CZ contracts out 700 million euro to be managed by Goldman Sachs as a fiduciary, 55% of which is currently invested in obligations. This story can be read in the Dutch Financial Times, the FD. The motivations for this decision are more stringent legal rules, diversification and hopes for better investment results.

The 700 million euro amounts to almost half of total CZ capital reserves. The CZ money is meant to cover unexpected losses in public health insurance, i.e. insurance for basic health care coverage which is mandatory for all Dutch citizens under the 2006 Dutch Health Insurance Act.

CZ is the third largest Dutch insurer with a national market share of 16%. CZ follows in the footsteps of another Dutch insurer, called VGZ, which already partners with Goldman Sachs since 2001. The VGZ conglomerate is the largest health insurance company with a national market share of 21%. Recently, the Dutch SBZ pension fund for health insurers (2.3 mld euro capital money) also announced a partnership with Goldman Sachs.


German health insurers against reforms

January 5th, 2007

German sickness funds ask their government not to implement the health insurance reforms planned at April 1, 2007. They expect that the proposed reforms will only lead to new problems, cost increases and quality decreases without solving the underlying problems of the German health insurance system. In their press release specific actions for the stabilization of public health insurance are recommended.


European Court of Justice decides on new Dutch health insurance system

May 24th, 2006

The Dutch Financial Daily newspaper wrote (in DUtch, only available for paid subscribers) that an insurance company operating in The Hague called Azivo has taken legal actions against the risk equalization scheme claiming a case of unlawful state aid. Yesterday, you say? Isn’t that old news? Yes, indeed that’s old news as this action was already brought to the European Court of Justice on 13 March 2006 (see pdf file here).

If you read the Official Journal of the European Union more closely, Azivo appears to refer to “the provisions of the new healthcare scheme relating to the prohibition of premium differentials, the duty of acceptance and the risk equalization system”. It should be noted that Azivo does not seem to be against the risk equalization system as such, but contends that in its current form it does not generate appropriate compensation for the big cities of The Hague and Amsterdam. Today, the same Dutch Financial Daily newspaper wrote (in Dutch, only available for paid subscribers) that Azivo does not want to bring the health care reforms down, and is willing to stop the legal actions if the Ministry of Health comes up with additional compensation for the bigger cities.

Tricky detail of all this fuzz: although the Dutch health care reform plans have been discussed with the European Commission (EC) before the transformation at January 2006 took place, there has never been a formal investigation procedure initiated by the EC with regard to the question whether open enrollment and premium rate restrictions in the Dutch private health insurance market are in accordance with EC law. Some scholars claim that these public policy restrictions are unnecessary, not proportional and undesirable to the pursuit of the general good.


Managed care options not favorable in Switzerland

May 21st, 2006

In Switzerland 55% of the people choose a voluntary deductible in order to keep their premiums down, however, still only a slight minority of 10% chooses a managed care option for this reason. This results from a study conducted by the Swiss organisation of health insurers, Santé Suisse. Amongst the two most favorable managed care options, the gatekeeper model with an uncapitated general practitioner is preferred over the HMO capitation model.