03 November 2008

The Dutch Health Care Model

Johnny Munkhammar, a European free market advocate, argues in the Rocky today, in an op-ed column not available on line, that the Dutch model for universal health care is one for the U.S. to follow. Basically, he is arguing that universal health care is good, but that private insurers are better than a single payer system.

In the Netherlands, every Dutch citizen is required to have basic health insurance coverage for medical treatments, long-term care and dental and maternity care. They choose from fourteen private insurers. Supplemental vision and dental care is available and about 90% of the population has it. There is a fine on those who don't get covered equal to about 130% of the cost of getting coverage. There are subsidies for those who can't afford care based on income that two-thirds of people are eligible to receive. Rating based on age, sex or risk of illness is prohibited. There is a 7.2% salary deduction up to $3,300 to fund an insurance fund that equalizes risk.

In short, the Dutch plan looks rather similar to plans proposed by Hillary Clinton and Barack Obama during the campaign, although, of course, neither plan is identical. The Dutch plan is closer to Clinton's than Obama's, because Clinton's plan had a mandate to buy health insurance that Obama and McCain's plans both lack. But, no one in the U.S. debate is proposing mandatory long-term care or dental care plans.

Before the current Dutch health care regime was in place, about 70% of the Dutch (those with incomes under $49,000 a year) had the equivalent of a U.S. Medicare style system, financed with an 8.2% payroll tax. The reforms have purportedly helped keep down health care costs which are much lower in the Netherlands than they are in the U.S.


Michael Malak said...

Without looking at the details -- but guess, what? I more or less agree, with the following caveats:

1. In the U.S., any healthcare regulation should be at the state rather than federal level.

2. It is imperative to stick to a definition of "basic" healthcare. One bright line for me is name-brand medicine. With patents lasting 20 years at the most, and about 5 years in practice for prescription medication (due to FDA delays), people cannot claim a human right to medical technology that's been available for less than five years. The Medicare prescription plan is egregious in this regard.

But the number one problem with healthcare in the U.S. is the tie to employment. Putting aside the issue of grandfathering for the moment, this is what should really happen:

At the moment a future mother is expecting, the family purchases lifetime non-cancelable rate-guaranteed health insurance for her baby. It's like other major baby investments, college, braces, extra bedroom, etc. A lot of people like myself already do something similar on a much smaller scale: banking cord blood for the stem cells. It's a lifetime investment in the child's health.

For those young people who turn 18 without health insurance while carrying significant pre-existing conditions (and thus cannot get lifetime health insurance for a reasonable price), something like the Dutch system should serve as a safety net for basic medical care.

For those of us who are older and with pre-existing conditions clinging on to group health insurance and HIPAA, other states should imitate Cover Colorado, whereby if your employer doesn't offer group health insurance you can join a statewide group (that covers more than just basic medical care).

Andrew Oh-Willeke said...

I suspect that "basic" in the Dutch assessment, would be "deluxe" by American standards.