Since the early 1990s the Dutch health-care system has been in transition from supply-side governmentregulation towards managed competition (Schut and Van de Ven, 2005; Van de Ven and Schut, 2008). Competing insurers are supposed to be(come) the prudent buyers of care on behalf of their insured. In 2006 a major step was taken with the implementation of the Health Insurance Act: a mandate for every citizen to buy a basic benefits package from a private health insurer combined with open enrolment and community rating. Uninsured people are liable to a penalty of 130% of the premium over the period of not being insured. Individual consumers have an annual choice among private insurers, who can selectively contract or integrate with health-care providers. Subsidies make health insurance affordable for everyone, and a risk equalization fund compensates insurers for enrolees with predictably high medical expenses.
The introduction of the Health Insurance Act created a strong price competition among health insurers. Many insurers tried to attract customers by offering low-priced contracts, in particular by discounts on group contracts (on an average of about 7% cheaper). In 2006, 18% of the population switched to another insurer. As a result of the vigorous price competition in 2006 and 2007 health insurers incurred annual losses of about 2% of total premium revenue on the offering of basic health insurance (DNB, 2008). In 2006 and 2007, the annual increase in per capita total health expenses was around 4%. Since 2007 insurers started to cut operating costs, premiums converged and switching rates dropped to about 4% (NZa, 2008a). The ultimate goal of the reform, however, is not to increase the efficiency of providing health insurance, but to encourage health insurers to increase the efficiency of the health-care provision by becoming prudent buyers of health services on behalf of their customers.
Gradually, the insurers have started to develop their new role. Some insurers have set up their own pharmacies, some have set up their own primary-care centres and others experiment with bonus payments for general practitioners. For physical therapy, prices have been made freely negotiable since 2005. Since then variation in contract prices and other conditions increased as well as the average price level (which was quite low at the start). Since 2008 one insurer offers a preferred provider plan with financial incentives to use preferred GPs, a preferred internet pharmacy and 13 preferred hospitals. From 2009 several health insurers are waiving the mandatory deductible (h155 per year) for hospital treatment of a number of common diseases if their enrollees choose one of the preferred hospital that have the best performance in treating that disease. So far, the strongest impact of the reform has been on the price of outpatient prescription drugs. In June 2008, four large health insurers each completed a tender among producers of generics, which resulted in price discounts between 40 and 90%. These successful purchasing activities by insurers are more remarkable as government has made many unsuccessful attempts in the last decade to lower the prices of these drugs.
Even though insurers are increasingly behaving as critical purchasers of care, they have been quite reluctant to selectively contract with health-care providers and to offer preferred provider contracts to their customers. There are several reasons for this.
First, supply and prices of health services are still heavily regulated, leaving limited room for health insurers to manage care. For example, in the hospital sector, most prices are still derived from a fixed Copyright r 2009 John Wiley & Sons, Ltd.