Sarah Kliff of the Washington Post posted an article based on the Commonwealth Fund’s recent international comparison on health spending. In it, she points out that the Netherlands (a nation whose entire population is the size of the United States’ non-group private market), spends $4,914 per capita on health while the US spends $7,960. By moving to a Netherland-style health system could the United States save $705 billion as Kliff claims?
Regardless of the answer, the United States is already making the transition to a Netherlands-style health system as a result of the It’s core elements are extremely similar to the Dutch Health Insurance Act of 2005 which applied an individual mandate to all Dutch citizens and residents paying payroll taxes. Sound familiar?
The Dutch fund their system based on personal premiums (over $1,000 Euro per year) and a 6.5% payroll tax (up to an additional $2,233 Euros). They even offer low-income subsidies to purchase insurance, just like the Affordable Care Act.
So how did the Dutch system fare for cost increases? Initially costs continued to rise after the reforms; not surprisingly, public opinion sagged. More recent research showed that Only about 1 percent of the population is uninsured by recent estimates.
However, the insurance market has become more concentrated; five large insurance conglomerates cover 80 percent of the population. That could lead to a potential inability to control costs as competition is limited.
On the provider side, the Netherlands have successfully incorporated prospective payment (like and capitation) into a fee-for-service structure. The US lags far behind in that effort. If experiments like bundled payment and can reign in significant savings, maybe the Affordable Care Act can emulate the Netherlands’ health reforms.
Even if those payment reforms flop, the changes to the health insurance marketplace at least offer equity, enlarge the risk pool, and provide the best politically-realistic choice to achieve (near) universal health care in the United States.