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Chapter 8 | The impact of the crisis on the health system and health in the Netherlands 253 Overspending was also recorded in the area of specialist care; overspending in this area was much greater (in both absolute and percentage terms) compared with GP care. One of the reasons for overspending in the area of specialist care was that the tariffs of medical specialists had been, since the introduction of a system based on DRGs, known as diagnosis and treatment combinations (diagnose behandel combinaties; DBCs), in 2005, based on normative times assigned to treatments. These appeared to have been incorrectly calculated. 2 However, it was initially (2008) compensated from additional government revenue recorded in that year and no measures to reduce it were implemented, pending research into the causes of the overspending (Ministry of Health, 2008). In later years, overspending in specialist care was addressed by implementing tariff cuts (see section 3.1). In the area of pharmaceuticals, a so-called clawback mechanism had been in place since 1998. Pharmacies received price reductions from the pharmaceutical industry when buying pharmaceuticals; to redistribute this profit from pharmacies to consumers, a fixed percentage of the reductions was taken back by the government (i.e. clawed back) (Schäfer et al., 2010). This percentage was set at 6.28% and up to a maximum of €6.80 per prescribed medicine, with some temporary increases in 2007 and 2009–2010 (for administrative reasons rather than because of the financial crisis). 3 The clawback was abolished in 2012, when free prices for pharmaceutical care were introduced (Foundation for Pharmaceutical Statistics, 2012). According to Boonen et al. (2010), the government's attempts to claw back part of the discounts offered to pharmacies were only marginally successful. This was because suppliers increased the prices of pharmaceuticals to compensate pharmacies for the clawback – this was possible as long as the prices were set below the legally set maximum prices. Overspending in the area of pharmaceuticals in 2007 and 2008 was modest (Table 8.2) mainly because of the preferred pharmaceuticals policy. Since 2005, health insurers were allowed to identify preferred pharmaceuticals for the three most frequently used active substances: omeprazole, simvastatin and pravastatin. From these categories of pharmaceuticals, reimbursement occurs only for those that are at the same price level as the cheapest pharmaceutical (mostly a generic) plus 5%, assuming that active ingredients, concentration and mode of administration are similar. This means that if a patient chooses a non-preferred drug, the extra cost of this drug compared with the preferred drug is no longer 2 Overspending in the area of specialist care may also be the result of the relatively low number of specialists: the number of specialists has been traditionally restricted to limit supplier-induced demand; however, restricting the number of specialists is no longer a solution in a more market-oriented system as it may reinforce their bargaining position and hence their ability to influence prices upwards (Schut, Sorbe & Høj, 2013). 3 The 2007 increase was introduced because certain financial targets agreed between the pharmaceutical industry, the Ministry of Health and the Association of Health Insurers were not met. The 2009–2010 increase was imposed because part of the 2008 clawback was actually not clawed back as there was a court ruling against it. After this was overruled in an appeal, the Dutch Health Care Authority (Nederlandse Zorgautoriteit) decided to have the shortage in clawback amount compensated via an increase in the clawback percentage.
254 Economic crisis, health systems and health in Europe: country experience reimbursed by the insurer. 4 The list of preferred pharmaceuticals is revised every six months. Health insurers were initially required to set the list of preferred pharmaceuticals collectively, but since July 2008 they have been allowed to do so individually. In 2008, four of the largest five insurers started to experiment with preferred pharmaceuticals, selecting preferred drugs through tenders among suppliers of several high-volume generic drugs. As a result, list prices of the 10 biggest-selling generic drugs fell between 76% and 93%, leading to an estimate saving of €346 million in 2008 (Schut & van de Ven, 2011). To put this saving into perspective, total expenditure on pharmaceuticals for acute care (care under the Health Insurance Act (Zorgverzekeringswet)) was €6019 million in 2007 (National Institute for Public Health and the Environment, 2014). In 2009, the use of preferred pharmaceuticals was extended to more generic drugs and adopted by more health insurers (Schut & van de Ven, 2011). The total savings in the area of pharmaceuticals can be seen in Table 8.2 (savings have been realized since 2009). The savings are remarkable given that between 2008 and 2012 the total volume of pharmaceutical prescriptions issued to patients increased by 21% (GIP Databank, 2014). Rapid growth in expenditure was also noted in the area of long-term care, particularly in the growth of the personal budget scheme whereby users can opt for cash payments and pay providers directly. Since the introduction of the Exceptional Medical Expenses Act (Algemene Wet Bijzondere Ziektekosten) in 1968, its coverage has been extended from institutional care to many types of care, including home care, mental health care, counselling and aids for people with disabilities. This resulted in a rapid growth in expenditure (see Fig. 8.1 for 2005–2012), threatening affordability and necessitating a reform. To put a halt to this, starting in 2007, several types of home care (home-help, counselling) were transferred to the municipalities while at the same time their long-term care budgets were been effectively frozen (2014). 5 It was assumed that municipalities would be able to provide care more efficiently and tailor it better to the needs of recipients since they are closer to citizens and, more importantly, since this meant that the rights-based approach of the Exceptional Medical Expenses Act would be replaced with a compensation-based approach under the Social Support Act (Wet Maatschappelijke Ondersteuning) for services shifted to the municipalities (section 3.2 has more discussion of the compensation-based approach). This transfer has had far-reaching consequences for health care users since municipalities, which were charged with the implementation of the Social Support Act, have much discretion in the way they implement it. The 4 The regulation concerns homogeneous products without quality differences and, as such, the regulation should not have negative effects on the quality of pharmaceutical care. If a physician decides that for medical reasons a patient should receive a non-preferred pharmaceutical, it can be indicated in the prescription. The non-preferred pharmaceutical will then be fully reimbursed to the patient (Schäfer et al., 2010). 5 Although there have been some increases in the budget, every year the planned budgets for consecutive years have been equal to or lower than the budget for the next year (budgets are planned for several, usually five, consecutive years).
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Chapter 8 | The impact of the <strong>crisis</strong> on the <strong>health</strong> system <strong>and</strong> <strong>health</strong> in the Netherl<strong>and</strong>s<br />
253<br />
Overspending was also recorded in the area of specialist care; overspending in<br />
this area was much greater (in both absolute <strong>and</strong> percentage terms) compared<br />
with GP care. One of the reasons for overspending in the area of specialist care<br />
was that the tariffs of medical specialists had been, since the introduction of<br />
a system based on DRGs, known as diagnosis <strong>and</strong> treatment combinations<br />
(diagnose beh<strong>and</strong>el combinaties; DBCs), in 2005, based on normative times<br />
assigned to treatments. These appeared to have been incorrectly calculated. 2<br />
However, it was initially (2008) compensated from additional government<br />
revenue recorded in that year <strong>and</strong> no measures to reduce it were implemented,<br />
pending research into the causes of the overspending (Ministry of Health, 2008).<br />
In later years, overspending in specialist care was addressed by implementing<br />
tariff cuts (see section 3.1).<br />
In the area of pharmaceuticals, a so-called clawback mechanism had been in<br />
place since 1998. Pharmacies received price reductions from the pharmaceutical<br />
industry when buying pharmaceuticals; to redistribute this profit from<br />
pharmacies to consumers, a fixed percentage of the reductions was taken back<br />
by the government (i.e. clawed back) (Schäfer et al., 2010). This percentage<br />
was set at 6.28% <strong>and</strong> up to a maximum of €6.80 per prescribed medicine, with<br />
some temporary increases in 2007 <strong>and</strong> 2009–2010 (for administrative reasons<br />
rather than because of the financial <strong>crisis</strong>). 3 The clawback was abolished in<br />
2012, when free prices for pharmaceutical care were introduced (Foundation<br />
for Pharmaceutical Statistics, 2012). According to Boonen et al. (2010), the<br />
government's attempts to claw back part of the discounts offered to pharmacies<br />
were only marginally successful. This was because suppliers increased the prices<br />
of pharmaceuticals to compensate pharmacies for the clawback – this was<br />
possible as long as the prices were set below the legally set maximum prices.<br />
Overspending in the area of pharmaceuticals in 2007 <strong>and</strong> 2008 was modest<br />
(Table 8.2) mainly because of the preferred pharmaceuticals policy. Since 2005,<br />
<strong>health</strong> insurers were allowed to identify preferred pharmaceuticals for the three<br />
most frequently used active substances: omeprazole, simvastatin <strong>and</strong> pravastatin.<br />
From these categories of pharmaceuticals, reimbursement occurs only for<br />
those that are at the same price level as the cheapest pharmaceutical (mostly a<br />
generic) plus 5%, assuming that active ingredients, concentration <strong>and</strong> mode of<br />
administration are similar. This means that if a patient chooses a non-preferred<br />
drug, the extra cost of this drug compared with the preferred drug is no longer<br />
2 Overspending in the area of specialist care may also be the result of the relatively low number of specialists: the number<br />
of specialists has been traditionally restricted to limit supplier-induced dem<strong>and</strong>; however, restricting the number of<br />
specialists is no longer a solution in a more market-oriented system as it may reinforce their bargaining position <strong>and</strong><br />
hence their ability to influence prices upwards (Schut, Sorbe & Høj, 2013).<br />
3 The 2007 increase was introduced because certain financial targets agreed between the pharmaceutical industry, the<br />
Ministry of Health <strong>and</strong> the Association of Health Insurers were not met. The 2009–2010 increase was imposed because<br />
part of the 2008 clawback was actually not clawed back as there was a court ruling against it. After this was overruled<br />
in an appeal, the Dutch Health Care Authority (Nederl<strong>and</strong>se Zorgautoriteit) decided to have the shortage in clawback<br />
amount compensated via an increase in the clawback percentage.