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Dutch Treat: Will Massachusetts Be the Next Netherlands?

Dutch Treat: Will Massachusetts Be the Next Netherlands?

June 28, 2006

In Seattle over the weekend at the annual AcademyHealth Conference (nirvana for health policy wonks), I’m drawn to a session on health system reform in Western Europe. Can you feel the excitement?! Well, it was fabulous. Some takeaways:

• Every health system feels the heat and faces a two part challenge: 1. increasing efficiency and cost containment; and 2. maintaining solidarity and social cohesion.
• Every health system shows some degree of entrepreneurial behavior. It’s always too much for system supporters and too little for economists.
• Everywhere “health policy is a political system that absorbs and reflects national developments, traditions, and cultures…”

The best part was a presentation on the health system in the Netherlands (16.5 million people, 0.4% of US land size, tulips, wooden shoes, dikes, windmills, coffee shops). The Dutch have an open economy and a healthy respect for economic incentives, along with a keen sense of social solidarity and a pragmatic approach to things. They don’t have socialized medicine or socialized insurance. They have private insurance, and heavy government influence on prices and service volume. Some key elements:

• Individual mandate to buy insurance
• Private insurance
• No risk selection
• Government defined basic package
• Subsidies for low income folks
• Government supervision of quality and competition
• Nominal premiums
• Optional deductibles
• Yearly free choice
• Competition among insurers drives price negotiation with providers
• Transparency

Results: Netherlands system is #13 most costly among industrialized nations (lower than Canada and US), lower premiums, and very few uninsured. So I have to ask the speaker: what’s the penalty for violating the individual mandate? Answer – half the cost of an annual premium (get it? Same as MA's individual mandate in the new health reform law) .

Here’s a suggestion: some local think tank/policy group should organize a forum and invite speakers from Switzerland and Netherlands, the two nations with individual mandates. Let’s lift up the hood of this vehicle and take a closer look.

We can even go Dutch...