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september 2009
Marc Berg,
Partner
Since the introduction of the basic health care insurance policy on 1 January 2006, health care insurers have been through a tumultuous period of development. To attract customers insurance companies have attempted to differentiate themselves from their competitors.
As a first step, the battle was focussed on the issue of pricing, particularly discounts for collective insurance schemes (that are offered to specific groups of patients). Alongside this, health care insurers have streamlined their administrative processes, such as policy and claim processing and the call centre, resulting in a higher level of service to customers (as can be seen from an annual customer satisfaction study). The costs of these processes have also decreased. This is a good example of focus on higher quality leading to lower costs.
Increasing emphasis is now being placed on differentiation through health care purchasing. We are gradually seeing a shift from routinely contracting with all health care providers to preferential contracting with certain care providers, or what we call ‘new style’ health care purchasing.
New style health care purchasing
The transition from old health care purchasing to ‘new style’ health care purchasing can be described with reference to four trends that are increasingly evident at the moment:
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From institutional budgeting to product financing: It is increasingly rare for institutions to be given a fixed annual budget. Instead, they are paid on the basis of the number and type of services they deliver. This can be seen in hospitals in the shift from the A-segment (fixed) to the B-segment (negotiable) diagnosis-treatment combinations or within the context of the Exceptional Medical Expenses Act with the introduction of packages specifying the level of care required by individual patients (Zorg Zwaarte Pakketten or ZZPs). This increases the business risk to which the institutions are exposed. Health care insurers are also exposed to increasing levels of risk as the existing system of year-end risk equalization is being phased out.
- From efforts to results: Increasingly, agreements are being entered into with health care providers about the quality of care actually delivered. The provider is remunerated on this basis. For example, in hospital care the hospital is paid per diagnosis treatment combination per patient, regardless of the number of nursing days or outpatient clinic visits actually delivered for a specific patient. Agreements are also increasingly being made on the basis of specific quality indicators for each condition, for example the percentage of repeat operations due to infections.
- From routine contracting to differentiated health care purchasing: In terms of contracting, health care insurers are increasingly distinguishing between types of care provision: the types of agreements entered into with general practitioners differ materially from those entered into for, for example, medical devices. In the case of GPs, contracts are entered into with almost every GP, whereas for medical devices selective purchasing really does take place. In addition, within one type of care provision different contracts are entered into with different types of care providers. For example, a physiotherapist is paid a higher rate for his services than a colleague if they satisfy certain criteria (including quality criteria) and their colleagues do not.
- From specific care provision to integrated multidisciplinary care: Lastly, a trend can be observed where the different types of care provision are no longer approached in isolation. Alongside purchasing policy for GPs, purchasing policies are also being created for diabetes care and for work-related care. In other words, policy is being created for specific target groups. Functional funding of primary care, in which contract parties receive a fixed amount for the management of patients with a number of chronic conditions such as diabetes and COPD, is a good example of this development.
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