Health insurer DSW is increasing the health premium by 8 percent this year, meaning that policyholders will pay 149 euros monthly on the basic premium next year. That is an increase of 11.50 euros per month – the largest increase since 2006, when the current Health Insurance Act came into effect. DSW is traditionally the first to announce the new premium every year, other health insurers have until November 12 to do the same.
The cabinet already predicted an increase of 12 euros per month on Budget Day. Last year the government expected a similar increase, but it ultimately turned out lower. The fact that there has been no increase this year is because the reserves have now shrunk considerably, says DSW chairman Aad de Groot. In recent years, the reserves have been used to limit premium increases. “It is the first time that this is not possible.”
By law, health insurers must have approximately 500 euros in cash per insured person. DSW has a little more left than that, says De Groot. This gives the company a buffer for new policyholders.
Rising healthcare costs
The main reasons for the premium increase are higher wage costs for healthcare staff, the increasing demand for healthcare due to an aging population and new technological developments. The latter is “great” for the quality of care, says De Groot, but also causes costs to rise. “Glucose meters for diabetes patients, for example, are a major improvement over the test strips that patients used to use. But they are very expensive.”
The premium increase is based on the expectation of rising healthcare costs next year. Later this year, negotiations between health insurers and healthcare providers will begin on the contracts that determine how much a provider will be reimbursed for a specific treatment. On average, these reimbursements, like the premium, will increase by just over 8 percent, says De Groot, but not in every sector.
For example, general practitioners receive a little more, because it has been agreed in the Integrated Care Agreement that there should be more time for the patient. But district nursing will receive less, because its supply cannot grow due to staff shortages. “So then costs will rise less rapidly.”
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De Groot advocates a number of “fundamental changes” in the current organization of healthcare. This means: less market forces and competition. “The competition that exists now is not always aimed at improving care.” Insurers now spend millions every year on advertising to get a few thousand “young, cheap insured people” to switch – money that could be better spent on healthcare, De Groot believes. And during contract negotiations, “we go rolling on the street with healthcare organizations.” “I doubt whether that contributes to healthcare in the Netherlands.”
Reducing the ‘Health Gap’
As a DSW, De Groot no longer wants to spend money on extra advertising during the transition period and, more importantly, wants to organize contracts with healthcare providers regionally instead of nationally. This would mean that the preferred health insurers – the market leaders – make agreements with healthcare providers in an area and that the other insurers follow those agreements. “The market leaders know best what is going on in their region.” Such an adjustment requires mutual trust and partly removes market forces, says De Groot. “If we cannot achieve this together, the government can still play a role.”
Organizing healthcare – and health insurance – regionally can, according to De Groot, “reduce the health gap” in the Netherlands. The largest health insurers have a better view of who is in a vulnerable situation than the rest. “You know that there is a greater chance that they will avoid care if healthcare costs rise.”
DSW, which has most customers in Delfland, Schieland and Westland in South Holland, saw that many children in the region did not go to the dentist. “Parents thought they had to pay for this, but the dentist is included in the basic insurance for children. We have written to those families, and half of the children involved now go to the dentist.”