The long road to managed competition Sickness funds

The long road to managed competition? Sickness funds and the changes in the Dutch health insurance system, 1941 -2006 drs. R. A. A. Vonk Centre for the history of health insurance, VUmc, dept. Metamedica Waver, 22 June 2010

Centre for the history of health insurance, dept. Medical Humanities Structure - Centre for the history of health insurance - changes in the system of health insurance, 19412006 - the role of sickness funds

Centre for the history of health insurance, dept. Medical Humanities Centre for the history of health insurance, funded by: - Ministry of Health, Welfare and Sports - Zorgverzekeraars Nederland - Innovatiefonds Zorgverzekeraars Main objectives: - research to the history of health insurance, social security and the welfare state in the Netherlands and elsewhere - provide information and expand knowledge of (the history of) health insurance, social security and the welfare state - collect and preserve relevant historical archives (sickness funds, private health insurers, sector organizations, etc. )

Centre for the history of health insurance, dept. Medical Humanities Centre for the history of health insurance - Archives: ca. 500 m. - Documentation: ca. 8000 titles - Health insurance Health care Law Policy Ethics

Centre for the history of health insurance, dept. Medical Humanities 1913: Sickness Benefits Act passed 1929: Sickness Benefits Act effectuated Insurance scheme for wage-earners covering the risk of loss of income due to illness Carried by ‘Raden van Arbeid’ (labour councils) A. S. Talma, Minister of Labour (1908 -1913) Sickness funds did not offer ‘sick-pay’ insurance

Centre for the history of health insurance, dept. Medical Humanities Sickness funds Decree, 1941 - German occupying authorities impose a tripartite system: • compulsory social health insurance for wage earners and their dependants • voluntary social health insurance for non-wage earners their dependants • private health insurance - social health insurance schemes and private health insurance separated by an income threshold

Centre for the history of health insurance, dept. Medical Humanities The compulsory social health insurance scheme - compulsory enrolment (ins) - obligatory acceptance (sf) General Fund - income related premiums (ins) - employer pays half of the premium Sickness funds Insured & Employer - retrospective reimbursement (sf) - gov. det. package of service benefits Care provider

Centre for the history of health insurance, dept. Medical Humanities Voluntary social health insurance scheme - open enrolment (ins) - obligatory acceptance (sf) Sickness fund - community rated premiums (sf) - no retrospective reimbursement - gov. det. package of service benefits Insured Care provider

Centre for the history of health insurance, dept. Medical Humanities Changes and Additions, 1950 -1970 - 1951: DGVP/IZA public insurance for civil servants - 1957: SHI scheme for the elderly (65+) - 1968: AWBZ (Exceptional Medical Expenses Act) - National insurance against: - long term care (including nursing home care), - psychiatric care - care for the mentally and physically disabled

Centre for the history of health insurance, dept. Medical Humanities SHI scheme for the elderly - open enrolment Government contributions - obligatory acceptance Central Elderly Fund General fund compulsory scheme - age-limit: 65 or older - income threshold linked with state-pension plan Sickness fund Insured - premiums covered ¼ and ½ of the estimated expenses - premium shortfall replenished by government and General Fund. Care provider - dependants insured free of charge

Centre for the history of health insurance, dept. Medical Humanities

Centre for the history of health insurance, dept. Medical Humanities Elderly and voluntary social health insurance, 1970 -1980 - a worsening economic crisis forces the Den Uyl (19731977) government to invest heavily in premium reduction schemes for the elderly - low risks leave voluntary health insurance scheme in great numbers (risk skimming, crowding in) - voluntary social health insurance scheme failed due to weak financial basis

Centre for the history of health insurance, dept. Medical Humanities - WTZ (Health Insurance Access Act) - MOOZ (Act on the Co-funding Overrepresentation Elderly Sickness fund Insured) - Strict separation Social Health Insurance and Private Health Insurance - meant as a ‘temporary measure’ J. P. van der Reijden, State Secretary of Health (1982 -1986)

Centre for the history of health insurance, dept. Medical Humanities The WTZ and reform of the elderly social health insurance scheme, 1982 -1986 - Both elderly- and voluntary social health insurance were dissolved - The membership base of the elderly social health insurance scheme was transferred to the compulsory social health insurance scheme - Regulating the private health insurance sector - Standard private health insurance policy Obligation to accept everyone for this policy - Act on the Co-funding Over-representation Elderly Sickness Fund Insured (cross-subsidization)

Centre for the history of health insurance, dept. Medical Humanities Managed competition? - 1987: Dekker Committee - ‘Willingness to change’ - One national insurance scheme Fixed basic insurance (85% Sickness funds/AWBZ) Supplementary insurance Competing risk bearing insurance carriers Mixed system of income related and nominal premiums - 1990’s: Dekker-plan deemed ‘too revolutionary’ and consequently mothballed

Minister of Health, J. F. Hoogervorst (2003 -2007) State secretary of Health, H. J. Simons (1989 -1994)

Centre for the history of health insurance, dept. Medical Humanities Zorgverzekeringswet 2006 - basic insurance (90% SHI) + suppl. ins. - legal obligation to buy insurance/ accept appl. - fixed max. premium and compensation - ban on premium-differentiation - no income limit - competing risk bearing carriers - risk-equalization scheme (retrospective)

Centre for the history of health insurance, dept. Medical Humanities Changing role of sickness funds? - Sickness funds have shown an impressive ability to adapt to changing situations - Sickness funds were the driving force behind market-oriented changes in the health insurance system

Centre for the history of health insurance, dept. Medical Humanities Adaptability: 1941 Sickness funds faced a sudden loss autonomy - 1941: maintain voluntary insurance scheme - 1942: successful introduction of supplementary ins. - 1947: sickness funds start penetrate private health insurance through bovenbouw-insurance - 1947: sickness funds gain strong foothold in Sickness Fund Council

Centre for the history of health insurance, dept. Medical Humanities Bovenbouw-insurance Private Health Insurance - acquisition Bovenbouwinsurance - administration - board Income threshold Sickness fund A Sickness fund B Social Health Insurance Sickness fund C

Centre for the history of health insurance, dept. Medical Humanities

Market share of health insurance carriers in percentages, 1950 -1986 Type / Year 1950 1955 1959 1960 1965 1970 1975 1980 1985 1986 Commercial 57 43 35 42 40 36 36 33 29 25 Mutual 35 29 25 26 25 25 25 27 33 32 8 28 40 32 35 39 39 40 38 43 100 100 100 Bovenbouw Total Source: F. T. Schut, Competition in the Dutch health care sector (1995) 139.

Centre for the history of health insurance, dept. Medical Humanities

Centre for the history of health insurance, dept. Medical Humanities H. J. Anbeek (1918) - 1945: Sickness fund ANOZ - 1962: secretary KLOZ - 1980: Chairman Vereniging van Nederlandse Ziekenfondsen - 1980: Treasurer V. G. C. N.

Centre for the history of health insurance, dept. Medical Humanities Sickness funds and Bovenbouw-insurance - Strong alliance with private health insurers against ‘Nationalization’ (1955, 1968, 1977, 1986, 1992) - Market-oriented proposals (1950 – 1971 – 1984) - ‘socializing’ private health insurance - 1992: merging of sickness funds and bovenbouw resulting in large conglomerates (Achmea, CZ, Menzis, Univé, VGZ)

Centre for the history of health insurance, dept. Medical Humanities 2006: clean sheet? - basic insurance = sickness fund insurance - strong position supplementary insurance schemes - market orientation => bovenbouw - financial responsibility from 1990 onwards

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