-
01 January 2023 | Country Update
Developments and changes in health care financing in 2023 -
21 February 2017 | Country Update
Court of Audit: Sector agreements appear to be successful in containing healthcare expenditure
3.1. Health expenditure
Table3.1 shows trends in health expenditure in the Netherlands between 1995 and 2013. In 2013 health spending amounted to 12.9% of GDP in the Netherlands (see Table3.1 and Fig3.1), the highest in the EU (World Health Organization, 2015). Between 1990 and 2003 health care expenditure as a share of GDP was consistently on, or slightly below, the EU15 average, but since 2003 health care expenditure in the Netherlands rose more quickly. This increase is mainly due to the high and increasing expenditure for the long-term care sector. For hospital care and ambulatory care, the Dutch expenditure is about average (OECD, 2015). Since the beginning of the global financial crisis, average health care expenditure as a share of GDP has been falling in the EU. In the Netherlands, however, this share has continued to increase, a development also visible in neighbouring Belgium (see Fig3.2). In terms of per capita expenditure (in US$ PPP), health care in the Netherlands was among the most expensive in Europe in 2013 and only surpassed by Luxembourg, Norway, Switzerland and Monaco (see Fig3.3). In the same year, health expenditure from public sources in the Netherlands (79.9%) was above the average in the EU15 (77.1%) (see Fig3.4).
| Table3.1 | Fig3.1 |
 |  |
| Fig3.2 | Fig3.3 |
 |  |
Fig3.4
As a result of the financial crisis, in 2009 the government’s revenue from taxes and premiums fell by about 23% (around €18 billion). Since health care expenditure kept increasing at a steep rate, and accounts for a large and increasing share of the total public expenditure (20% in 2010 compared to 13% in 2000 (van den Berg et al., 2014a)), the pressure to contain health care costs, already apparent before the crisis, became even stronger. The breach of the Stability and Growth Pact criteria in 2010 reinforced the government’s view that more effective public spending control was needed. The political aim of the government to reduce debt to below 3% of the national budget led to significant budget reductions. The ensuing cuts applied to the health care sector were somewhat less compared to other public sectors such as social welfare, defence or education. The share of health care expenditure increased to 25.5% of total public expenditure in 2012 (Ministry of Finance, 2012) and the loss of jobs that affected other sectors during the economic crisis was not felt in health care, except for domestic care.
Between 2011 and 2013 the Minister of Health agreed with stakeholders (associations of health care providers, health insurers and patients) that yearly public expenditure growth could not exceed 2.5% for mental care between 2013 and 2014, 2.5% for medical specialized care between 2012 and 2015, and 2.5% for primary care between 2014 and 2017 (plus wage and price developments). Nevertheless, government health spending was €77.8 billion in 2014 or 29% of the total public budget, up from 25.5% in 2012 (National Government, 2014), which corresponds with an average growth of 7% per year. Investments in education of health care personnel have been protected from the budget cuts until 2014 in order to ensure quality of care. In 2014, however, a budget cut was implemented in the area of education of medical specialists – the length of education was shortened and the number of new specialists was reduced (Broersen & Visser, 2013). Table3.2 shows total health expenditure by service programme in the Netherlands in 2014.
Table3.2
The measures that have been implemented since 2009 can be grouped into four categories:
- shifting costs from public to private sources;
- shifting costs between various statutory sources (for example, transfer of long-term care from the centralized AWBZ to the municipalities), mostly in combination with major cuts in the budgets;
- substituting institutional care with home care and secondary care with primary care; and
- increasing the focus on improving efficiency and eliminating fraud.
Initially, from 2009, the measures were mainly targeted at reducing overspending, shifting costs from public to private sources by limiting the basic benefit package and increasing the compulsory deductible, and efforts to prevent inappropriate health care utilization. From 2011 onwards the measures increasingly focused on structural changes in acute care, with the government seeking consensus with the stakeholders to agree on further cost-containment, and in long-term care, where there has been a shift towards more decentralization of care in combination with major budget cuts (Batenburg, Kroneman & Sagan, 2015). Despite this, since 2009 expenditure has only fallen in the area of pharmaceutical care and aids, primarily due to the use of preferred medicines policy (see section 3.7.2) and effective tendering by the insurers. Expenditure on all other types of care kept increasing (Batenburg, Kroneman & Sagan, 2015).
- 3. This section is based on Batenburg, Kroneman & Sagan, 2015. ↰
In the Netherlands, health care consumers aged 18 and older must pay an annual mandatory deductible for all services and goods except GP-care, maternity care, and care for children under the age of 18. For the seventh consecutive year, since 2016, this deductible has been stable at €385 per year. Additionally, the personal contribution for prescribed medicines not fully reimbursed continues to be €250 maximum. The maximum annual health care allowance, which compensates for undesired income effects from health care costs in lower-income groups, has seen increases for both for single-person and family households, from €1336 to €1850 and from €2553 to €3166, respectively. These increases are more than the estimated average increase in insurance premiums and are considered a compensation for purchasing power. The income limit for health care allowances has also been raised, expanding eligibility. The maximum yearly income to be charged is €66,952. Meanwhile, the income-dependent contribution for health insurance under the Health Insurance Act has decreased from 6.75% to 6.68% for employees and those on social support. For entrepreneurs and pensioners, this contribution decreased from 5.50% to 5.43%.
Other important developments include that the average annual estimated community-rated premium for 2023 is €1649 and that the income-dependent premium for long-term care remains the same as the previous three years, at 9.65%. Lastly, insurers may no longer offer a discount (maximum 5.0%) on the basic insurance premiums for collective contracts, though collective discount on the voluntary insurance is still permitted.
In the period 2012-2015, the Minister of Health, health insurers, healthcare providers and patient organisations have concluded agreements in order to reduce the growth in curative care expenditure (comprising about 37% of all healthcare expenditure). These sector agreements consist of both financial agreements as well as care-related arrangements. The national Court of Audit audited the impact of these agreements and concluded that the financial agreements probably have been successful, since growth in expenditure was lowered considerably. However, there is also a decrease in healthcare demand in these years and it is difficult to establish the relative impact of each effect. The care-related agreements probably did not contribute to the saving. These agreements - regarding the efficient use of prescriptions, the implementation of a quality and efficiency program and the shift of hospital care to primary care - had limited effect on health care expenditure. For instance, substitution of care led to saving of €60 million, but also required an investment of €60 million to achieve the savings.