Market Health Care Reforms in Europe
While the U.S. seems to continue its slow slide towards socialized health care, patients currently suffering under such systems around the world are clamoring for more options. Johnny Munkhammar writes in the Washington Examiner about market-oriented reforms in the Netherlands. People must purchase health insurance, but the government relies on private competition rather than public bureaucracy for the provision of care.
Most Europeans have followed the American presidential campaign with interest, particularly when it comes to the groundswell of support for comprehensive healthcare reform. It seems likely that the U.S. will attempt to introduce an old European model, accepting heavy government involvement in the delivery of and payment for healthcare services in exchange for universal coverage.
Considering that several European countries are moving away from this paradigm and instead giving the private sector a more robust role, this trend is ironic.
The Netherlands is the best example of Europe’s move toward market-oriented reform. Before U.S. officials devote even more taxpayer dollars to health care, they should take a long look at how the Dutch have improved their health care system by reducing the government’s role in it.
Health insurance has been mandatory for all Dutch citizens since 1941. During the sixties, the Dutch government gradually took over the entire healthcare industry. This crescendoed in 1971 when a national bureaucracy was established to plan everything from funding to staffing and pricing.
Unsurprisingly, the Netherlands’ healthcare costs spiraled out of control, far outpacing overall growth in prices and incomes. The government tried to limit price hikes by rationing care, resulting in fewer choices, waiting lists, and staff shortages.
But such rationing did little to rein in costs. So Dutch leaders turned to the private sector.
Today, every Dutch citizen is required to have basic insurance coverage for major areas like medical treatments, long-term care, and dental and maternity care. Citizens and noncitizens alike in the Netherlands choose from among 14 private insurers. Supplemental insurance for vision or dental care is available; about 90 percent of the population has such coverage.
To enforce the mandate, the government imposes a fine on anyone who doesn’t purchase basic insurance. The fine is steep — thirty percent more than the cost of insurance for the period they weren’t covered.
For citizens who cannot afford insurance on their own, there are government subsidies.
Private insurers can’t deny coverage to high-risk individuals, and are prohibited from charging people different prices based on age, gender, or risk of illness.
The Dutch spend less on health care as a percentage of GDP than Americans do. The government keeps costs low through intelligent subsidies.