21 replies »

1. I lived in Amsterdam from 1 June. 1972 till 8 Jan. 2009, I now live in Uppsala, Sweden. I shall cut-and-paste an article that I wrote and published, describing the disappointment that ended my stay there.
   DUTCH HEALTHCARE IS A DANGEROUS ‘ANOMALY IN EUROPE’
   George Berger (PhD), Uppsala, Sweden
   21 April 2009
   The Netherlands is often thought to have a system of public healthcare whose generosity and effectiveness approaches those of the Scandinavian countries. Such notions no longer reflect reality. The country once had a mixed, public-private system that guaranteed access to everyone, provided excellent service, and was financed by private policies and taxes. One’s source of coverage (private insurer or government schemes) depended on one’s income and employment situation. It worked reasonably well. I was proud to enter it when I left America to work in the Netherlands in 1972. I had attained an academic position in a society that was far more rationally and decently organized than was the USA.
   Although there were forebodings my enthusiasm ended abruptly in 2007, when my Dutch wife became seriously ill. She was 72, I was 64. Misdiagnoses, 7 appointments cancelled without explanation or apology, and an outright lie straight in her face by the head specialist of a hospital division ruined her health for good. I was furious at what I thought were the failures of individuals: the usual story of uncaring personnel and inefficient bureaucracy familiar to users of the NHS.
   I was wrong. In January of 2006 control over the Dutch medical system (except for a tax-funded system for difficultly insurable expenditures, the AWBZ) was transferred from the State to the private insurance firms by government decrees and legislation. Funding of facilities and staff was divided between tax revenues and premiums. The government guarantees everyone a ‘basic package’ provided by the insurers, but the latter determine the size, quality, and cost of the many remaining care provisions and facilities. State-supervised competition among insurers—called Regulated Competition in the USA—was the officially voiced mantra. Profit maximization, free market deregulation, and future privatization were and are the true motives. The public, whose inordinate respect for any authority has been ingrained in them since the 80 Years War by Calvin’s local henchmen, the Dutch Protestant priests, were easily fooled into thinking that this new system would work to their advantage. I am not of Dutch descent and was not deceived. My study of these changes since the onset of my wife’s illness led me to strongly suspect that her neglect was mandated by rules set by insurers and politicians acting in collusion. I decided that we were dealing with institutionalized age discrimination. I informed people but could do little except describe what had happened and voice my suspicions. Few Dutch persons believed me. My impression was and is that few wanted to believe me.
   Last December I was diagnosed as having aggressive prostate cancer and applied for treatment at the (Calvinist) Free University Medical Center in my city of residence, Amsterdam. The treatment offered seemed to be minimal, and my initial attempts to secure definite dates for tests were disregarded. A highly placed medical friend employed by a leading hospital in Manhattan confirmed the minimalism. I flew in secret to Sweden, for a second opinion and treatment plan at Uppsala Care, a division of the prestigious Academic Hospital (Akademiska Sjukhuset) of the great University of Uppsala. Two highly regarded specialists spoke with me and examined the tests results that I had brought with me. One decided that my condition was so serious that action within six weeks was necessary. They proposed a treatment plan that was far more extensive than the two proposed by ‘my’ Free University urologist, Dr R.J.A. van Moorselaar (I am now undergoing the first component of the plan’s finalized version.)
   I confronted Dr. van Moorselaar and asked him why his plans omitted a certain procedure that the Uppsala specialists said was an important part of their treatment. I did not tell him about my visit abroad. He gave me no medical reason but mentioned a Dutch ‘directive’ governing treatment. It is now official policy. I was shocked when I found that directive’s PDF and saw that its archival name (here translated without abbreviations) was ‘65+ prostate carcinoma 2007.’ Dr. van Moorselaar was one of its writers. (After I voiced my suspicions the archival name was changed. The ‘65+’ is no longer mentioned.) I was 66 and suspected government-sanctioned age discrimination motivated by the cost-cutting superprofit plans of the insurers. I moved quickly to Uppsala, after fruitlessly attempting to publicize this in the Dutch press, and sought proof for my surmise. My fear was and is that such insurer-dominated deadly practices, if now active in the Netherlands, would be adopted by other EU countries. For their politicians could succumb to the influence of national and multinational insurance conglomerates such as AIG, whose corporate connections with my and other Dutch insurers ought to be more widely known and might be the source of the shabby options offered me by Dr van Moorselaar. The EU would lose a major component of its humanitarianism. (The state of Massachusetts has adopted a version of the Dutch system, and an influential American healthcare economist, Professor Alain Enthoven of Stanford University, has been urging its use throughout the USA.).
   Late in March I obtained the needed proof. My source is a medical specialist employed by a hospital in the Netherlands (where most specialists work exclusively for public hospitals). This person is not of Dutch birth. This source told a reliable acquaintance of mine that a secret system of prioritization indeed exists in the Netherlands. It regulates the granting and withholding of treatment, or parts of internationally standard treatments. It is based on at least three factors: age, cost, and relevant statistics. Given my personal experience, research, and discovery of the PDF, I now maintain that this system was inspired by the insurers, developed in secret by government committees set up to study these issues, and then adopted as official but unannounced policy whose ultimate aim is twofold: (1) cost-cutting that increases profits and saves the government money, and (2) consequent service inefficiencies, so that the possibly complicit directors of medical institutions will beg for privatization as an attractive alternative that will have the support of a public desperate for decent healthcare. Something like this has already occurred in one Amsterdam hospital, Slotervaart, which is now owned by big business.
   I hold that this hitherto unknown arrangement was set in motion right after the transfer of power in January 2006. Whatever the details might be, in no other EU country do the insurance companies have such extensive decision-making freedom that national law prevents its government from interfering with most of their activities. (This differentiates the secretive Dutch system from the UK’s, in which NICE [National Institute of Clinical Excellence] does the dirty work but can be publically called to account.) For this reason EU civil servants have called the Netherlands an ‘anomaly in Europe.’ Are elderly persons considered—even in the higher echelons of the EU—economically unproductive and hence financial burdens rather than sources of pride? And who bears these ‘burdens’ in the Netherlands? Not the taxpayer, but the government and insurers, who try to prevent any increase in their expenditures. Dutch citizens and legal residents pay their premiums and healthcare taxes every month, or are granted the basic package, in the expectation of receiving adequate and expert medical attention when necessary. Although many are vaguely aware that something is wrong, few know that and how they are being cruelly deceived. Does the reader want this dangerous anomaly to become the rule in the EU? The danger is real.

2. > Tom I was thinking the diabetes center
   > would be capitated by the individual.
   That’s fine, so long as the patient actually writes the check (so to speak). I think it’d help compliance to have a monthly payment (amateur psych) but you know you take what you can get.
   t

3. Matthew again i must disagree. Many more people maybe, many many more people is hyperbole.
   ***not intended to be read by anyone working for a pharmasutical company*****
   We have a program where any clients within a couple hundred percent of the federal poverty rate get carved out of the companies drug plan and put into pharmasutical assistance programs for all their brand drugs at no cost or $95 a month.
   A person diagnosied with a chronic disease that is following proper care guidelines will usually cost less if the plan eliminates cost sharing, removing any impedments to adequate care. The issue is you usually have to offer the non compliant person the same benefit which kills any overall cost savings. Giving a non compliant person free drugs or care is wasting money. ya government regualtion!
   ***Ok for blood sucking pharma reps to read again****
   Tom I was thinking the diabetes center would be capitated by the individual. Each year of the individual liked the care they would sign up for another and pay a capitated rate monthly for their care.
   Eliminate the insurance company from the arrangement alltogether. Since it is a known event no reason to insure it.
   Private charity is also a much better judge of need then a bureaucrat, much harder to defraud in most cases as well.

4. Nate, much as I love you I’m not reading a 24 pge academic paper on bankruptcy formulas in Germany–especially as it wasn’t the country Cohn referred to.
   However, as the bankruptcy data includes lots of confounding factors, let me change the loose line to the tighter one of “many many more people in the US have trouble paying their medical bills” which is validated by the many Commonwealth studies http://tiny.pl/hhhng
   By the way, in the UK, the BMA just suggested abolishing the 7.50 GBP charge per Rx, saying that people with multiple prescriptions were having trouble paying–similar to Pitney Bowes which has abolished drug copys for chronically ill

5. Oh, it doesn’t put my e-mail address automatically on the posts any more. Just as well, I suppose. Here you go: trl at masterpractice dottt com.
   t

6. Thanks for the pointer to the Cochrane paper, John. I’m finally reading Michael Cannon’s “Healthy Competition” and microeconomics has been a hobby of mine for a long time, so I guess it is not too surprising I’d think of something like “health status insurance”. Great minds and all that. I’ll have to read it (haven’t yet, but I found it. For the interested: http://www.cato.org/pubs/pas/pa-633.pdf)
   And yep, if “medical status insurance” can be treated like life insurance, the complication of an HSA isn’t really necessary.
   Nate, at least once upon a time it was OK to have a disability policy that said “if you lose one eye we pay $5K but if you lose both we pay $50K.” Stuff like this. I don’t think there’d be any “equal treatment under the law” issues at all to pay off differently for lung cancer versus GERD, but I had the idea it might be illegal to even market a product like this and call it medical insurance. It would figure.
   What I was thinking of with the “global reimbursement” is to set the payout at something that reasonably takes care of you if you do what pretty much you’re told. And I didn’t want the $PMPM to go directly to the diabetes care center, I want the patient to choose the one in his area with the best reputation and convenience for himself. The center only “knows” it is going to get its bucks if it keeps its patients happy and maintains its reputation. This is a fairly “pure” sort of CDHC along with a pure insurance scheme. And a patient could always skip the center and roll his own with his family doc. Or he could skip his doc and use Google. Or he could send his kid to college so the kid could use Google. Or maybe he could buy “diabetes care insurance” with his $250K and pass the risk to a specialty insurer. The point is it is up to him.
   > I worry about people living up to it,
   > if they blow their 250K will we let them die?
   Well, in a word, yes. With very good hospice care. Unless of course the “non-compliant or simply unlucky diabetic charity foundation” steps in on his behalf. There will always be a need for private charity. I have said in the past that public policy is just too blunt an instrument to deal with individual cases. It is one thing to construct a framework in which resources will be provided; it is quite another to specify in detail what exactly those resources ought to be. Hayek’s “Fatal Conceit” is to think anyone’s smart enough to do that.
   There are many other problems with CDHC that have been well-discussed here on THCB over the years. You yourself have agreed that patients need access to provider contracts to get decent pricing, they can’t be simply cast adrift in a fee for service malestorm (although I think direct payment by the patient would drive transparency right quick, especially for disease management programs). There are individual problems too: some people simply don’t understand medical instructions (I can point to family members, it isn’t just “them” in the other tribe). Another is that many of these behavior-oriented maladies are very deep-seated in the psyche and it seems cruel simply to stop treating the consequences of a disease they haven’t the strength to overcome. And people can’t very well determine what is or is not good quality care. On the other hand, seeing the limits of the resources that will be devoted to your care might just provide some clarity about what’s important. If that’s chocolate cake or booze, well then blindness and kidney failure are in your future and there will be no dialysis, it is that simple. But we will all die of something — maybe the chocoholic dies happier that the broccoli-eating-compliant, which is the point of the libertarian commentators on this topic — the only way to find out what medical services are really worth is to give people money and see what they do with it.
   Politically I don’t think this has a ghost of a chance, but it seems like it might be a good idea if CDHP is really going to be that. Not that it is. But if it was, this is a way to decouple “insurance” from directing the spending.
   Yes, other structural changes will be needed, I don’t need lectures about that.
   Nate, if you’ve got some time to talk contact me at my e-mail address.
   t

7. lol wonder if i pulled one out of the liberal playbook book and called capitation “global reimbursement” instead if the regulators would let me get away with it

8. Tom that is a very interesting proposal. And Timely as I have a couple employers I am trying to help now that have problems with diabetics. It can be done but it effects the remaining benefits. Carriers now sell catastrophic illness policies that do just that, you get diagnosied with this we give you $20,000. Where you get in trouble is with HIPAA and ADA. People don’t realizie how much those two laws increased the cost of insurance. If you paid out 250,000 for diabetes you could not pay out more I don’t think for another illness. This would be discriminaing against a person disabeled with diabetes. You couldn’t limit other benefits becuase of this pay out.
   What you could do is cap all benefits at 50,000 or some amount then have additional disease specific benefits payable upon the diagnosis. You can reward people up to 20% over base but you can not punish them.
   I was about to say you can’t deposit it into their HSA becuase you would exceed the annual contribution limit….but….if the HSA bought the critical illness policy and payment under the policy went to the HSA you might be able to call it an investment and accomplish the same goal.
   I do love the theory and the insurance aspect of it, it really is the essence of insurance. I worry about people living up to it, if they blow their 250K will we let them die?
   Your comment just made me think of capitated speciality providers. Imagine the quality of care a dedicated diabetes clinic could deliver if they knew they would be receiving $x per year per “member” to manage their diabetes. All treatment would be covered by the center who would be responsbile for managing that condition.
   Just got back from a meeting in WV where I was discussing capitating providers outside HMOs with the employer. Something that really needs discussed more, providers with certain safe guards should be allowed to accept capitation.

9. Tom Leith: You wouldn’t even need an HSA. Just structure it like life insurance, for which proceeds are usually not taxable. I doubt that it would be as simple as you describe, but if you read John Cochrane’s paper on health-status insurance (Cato Institute, February 2009) he concludes that all the ailments and co-morbidities would result in a manageable schedule of allowances.
   The primary reason it does not exist today is that the government makes us get our health “benefits” from our employers. So, the insurers compete on an artificial economy of scale, by which they negotiate networks on behalf of employer-based groups. These networks result in opaque prices and high costs. If the government freed us to buy health insurance of our own choice, I suspect it would look a lot like you describe.

10. “Providers, including hospitals and physician groups, show precious little interest in assuming this risk through either capitation, bundled payments or global budgets.”
    Barry, the U.S. system only rewards use/overuse, it does not reward thrift. Universal budgets would solve(force) a change to this mentality and waste.
    “Patients who want to shift to taxpayer financing seem to be saying, in effect: Don’t talk to me about actuarial risk. I want whatever healthcare services my doctor and I think will benefit me and whatever its costs, it costs and taxpayers should pay.”
    Which patients? NOT ME. I’ve always said that single-pay would fail if NOT in conjunction with universal budgets.

11. Cohn’s article is well written, but I don’t see how he can claim that Republicans are against reform. Even John McCain proposed that the government should free Americans to buy health insurance that we chose, instead of forcing us to accept health “benefits” that our employers chose.
    While this would make U.S. health insurance look more “European” in one sense, it wouldn’t put the government in charge.

12. That’s really close Barry — I think it is more like “I want whatever healthcare services I think might have the remotest possibility of helping, somebody else should pay the bill, and I don’t care who else thinks what, no not even my doctor.”
    This is the condition we’re in and the courts have more or less gone along with it. (Contracts are always construed against the more powerful/knowledgable party).
    So Nate: would it be legal to write a medical insurance policy that says something like “if you’re diagnosed with Type II Diabetes you get a lump sum payment of (say) $250K to cover that and all comorbidities for the rest of your life”? It would go straight into your HSA, tax free. From the insurer’s point of view this is real insurance: there’s a calculable risk and payout. There might still be arguments about whether some future problem ought to be seen as secondary to diabetes but we have those all the time anyway.
    If we could do something like this, I think we’d see “diabetes care centers” open up all over the place where for a low, low $500/month you get your insulin, counseling, dieticians, and the rest. We’d find out pretty quick how much the meter you don’t have to code anymore is really worth. I bet the $500/month leaving the patient’s bank account would get his attention right quick — might even help compliance.
    Is this even legal now?
    t

13. “The reasons named are similar to those mentioned in the U.S., with unemployment, divorce, and illness being among the top causes…”
    I guess then Nate what you’re saying is that the further away you get from government run single-pay (Germany, Netherlands) the closer you get to medical bankruptcy.

14. Reform is “hard” solely due to the accretion of vested interests that have more or less gotten their way over the decades primarily from the end of WWII. The issues are solely political. In terms of common-sense, factual evidence everywhere and so on reform is as simple as can be.
    That is the point of Mr. Cohn’s article along with many other similar articles.

15. Jon Cohn writes: “The French spend around 11 percent of their gross domestic product on healthcare, the Dutch around 10. In the US, we spend around 16 percent.”
    I wonder how much more the French and the Dutch would be spending if they paid U.S. prices for hospital care, physician fees, drugs, devices and imaging. I think the spending gap as a percentage of GDP would be much narrower assuming no changes in actual healthcare utilization in any of the three countries.
    When contemplating reform, I think we significantly underestimate the importance of culture in determining what people are prepared to accept. Europe is less litigious than we are, and the loser pays rule that prevails in much of Europe, by itself, ensures that most non-meritorious claims do not go forward. Europeans are also generally more accepting of death than we are in the U.S. As a result, there is much less futile spending on end of life care. Physicians seem willing to work for much less compensation in Europe than here which I think, goes well beyond differences in how medical education is financed. Drug prices are more tightly controlled in Europe than here. Hospital prices and fees for surgery are much lower in Europe.
    I find it interesting that when one travels to Europe for either business or pleasure, the prices of almost everything including hotel rooms, restaurant meals, gasoline, and virtually anything for sale in a department store are much higher in Europe than here. Land and housing costs are more expensive as well, at least in the major cities. For businesses, office rents are higher in European cities than here. Yet, somehow, healthcare, especially hospital charges, surgeons’ fees, drugs, devices, and imaging are all much cheaper.
    The reform discussion in the U.S., especially as it relates to the role of insurers and whether we should shift to taxpayer financing of health insurance or not, is incomplete as it fails to address the important differences in culture and patient expectations in the U.S. vs. elsewhere.
    Historically, the role of insurers was to assume actuarial risk. For a fixed premium, they would cover the cost of a defined set of benefits. As costs increased, premiums would be adjusted accordingly. Providers, including hospitals and physician groups, show precious little interest in assuming this risk through either capitation, bundled payments or global budgets. Patients who want to shift to taxpayer financing seem to be saying, in effect: Don’t talk to me about actuarial risk. I want whatever healthcare services my doctor and I think will benefit me and whatever its costs, it costs and taxpayers should pay. Ideally, I define taxpayers as people or entities other than me. In short: stick someone else with the bill but make it free or very low cost to me. No wonder healthcare and health insurance reform are hard. If it were easy, we would have fixed the system decades ago.

16. Page 33
    Figure 1. Histogram of 5-year Medical Shocks as Fraction of Average Annual Income,
    Germany and USA

17. Matthew,
    sorry to start Monday by correcting your rehetoric but;
    “And of course no one there gets bankrupted by the cost of medical care.”
    not so true. Makes a great sound bite and slogan for reform but highly inaccurate. I did refrain from using the L word though!
    http://www.minneapolisfed.org/research/wp/wp617.pdf
    “The main cause of bankruptcy is unexpected shocks to income and expenses.”
    “There are two primary sources of unexpected expenses: medical expenses and family problems (particularly divorce).”
    “No consumer bankruptcy law existed in Germany prior to 1999.”
    “The reasons named are similar to those mentioned in the U.S., with unemployment, divorce, and illness being among the top causes (Rath (1996))”
    Page 16 even estiamtes the dollar amount of medical claims in Germany that leads to BK, now that they can actually file for BK.
    If you yahoo search Germany BK medical bills you can find reams of proof.

18. Does anybody think that if we get anything like the Dutch system we’ll get the prices that go with it? From what I understand the Dutch pay about $1600/year(u.s.) for coverage with small deductibles. So far the discussions have been about universal coverage and reshuffling the same payment system deck.

19. Good article for the “unwashed” public, but obviously nothing new reported there that has not been know for decades and decades.
    Senator Kyl is one of the more vile members of the Senate in any case – no nonsense is nonsense enough for him to state that even tangentially impinges on his extreme right-wing ideology that of course has no facts supporting it.

20. Sorry Frank, I seem to have missed the political drek you must be referring to, and I’m not sure what point you were tyring to make citing Warren & Himmelstein. Are they creators of political drek or what? I don’t understand what you’re trying to say.
    Speaking of political drek:
    > And, of course, there are NO parasite
    > med-mal lawyers there
    This isn’t true: there are med-mal lawyers but they are kept in check by a loser-pays rule in most of Europe (http://www.pointoflaw.com/loserpays/overview.php, http://www.manhattan-institute.org/html/cjr_11.htm) and by other mechanisms like arbitration-first schemes (found in the UK, Poland, Canada, and some few states here, Indiana for example). All Europe is struggling with this issue (http://www.hope.be/05eventsandpublications/docpublications/71_malpractice/71_malpracticereport_2004.pdf, http://www.sppnn.org.pl/index2.html, http://www.chsrf.ca/mythbusters/html/myth21_e.php, http://www.mcandl.com/indiana.html).
    It looks to me like Cohn’s written a fine article at an appropriate level for the non-geek on the point about the timeliness and quality of medical services found in Europe.
    t

21. “And of course no one there gets bankrupted by the cost of medical care.”
    And, of course, there are NO parasite med-mal lawyers there. Which MESSIAH won’t stop.
    BTW: do they also “bankrupt” studies done by POLITICIANS???
    http://www.law.harvard.edu/faculty/directory/index.html?id=82
    http://www.harvardscience.harvard.edu/directory/researchers/david-himmelstein
    Only Democrats could be blinded by such political dreck.