No ‘big bang’

We agree with Maarse and Paulus that reform of the provider market is an incremental process. A major reason for this is that a number of the necessary conditions – such as good performance indicators, transparent product classification and adequate risk equalization – have not yet been put in place and it is taking many years to do this. We stress that meeting these conditions is crucial to the effectiveness of the reforms. We do not argue, as stated by Maarse and Paulus, that further development of the reform is merely a technical issue, and that these ‘technical’ conditions are sufficient for the success of the reforms.

However, we disagree with their view of the health insurance reform as a ‘big bang’ reform that fundamentally differed from incremental reform of the provider market. Health insurance reform had already begun in the early 1990s. During the 1990s, several crucial reforms were gradually implemented in the then sickness fund system, such as a risk equalization scheme and a flat-rate premium (neither of which had previously existed), free choice of sickness fund (until 1992 each sickness fund had had a regional monopoly), the abolition of the sickness funds’ obligation to contract with independent health-care professionals, and the introduction of some scope for price negotiations (fixed prices were replaced by maximum prices).

The incremental character of these reforms is nicely illustrated by the gradual improvement of the risk equalization scheme and the concurrent reduction in the share of the ex-post cost-based payments from 97% in 1995 to 47% in 2006 and 25% in 2010. As with reform of the provider market, realization of the conditions necessary for successful reform of health insurance is a slow process. The Health Insurance Act can be seen as an important step in this process, but it was certainly not a ‘big bang’.

Political context

Maarse and Paulus are right to note that several political parties and interest groups have expressed doubts about the continuation of market reforms in health care. Such opinions are not new, however, but have been expressed for the last two decades. For example, after radically reforming the Sickness Fund Act in 1992, the then Health Minister Hans Simons left the government in 1994, a few months before the new elections, because he was confronted with significant opposition to further reform. Nevertheless, while subsequent governments strengthened supply and price regulation, the institutional and technical conditions for managed competition were slowly but surely being realized. Eventually these changes paved the way for the 2006 reform. Elsewhere, we have argued that an important explanation for this was the nature of the Dutch political system, which is characterized by multiparty coalition governments and a corporatist decision-making structure (Helderman et al., Reference Helderman, Schut, van der Grinten and van de Ven2005).

What matters is not so much daily variations in political opinion, but the underlying political mainstream. In the long term the general consensus, including a large majority in parliament, seems to support – with certain provisos – some further (small) steps towards managed competition in health care (CPB, 2010).Footnote 1 Although political parties disagree significantly about the pace at which they want to implement further market reforms, no alternative has been proposed so far. This raises the crucial question of whether there is a realistic alternative that would be acceptable to a political majority.

Any realistic alternative?

There are two plausible alternatives to the managed competition model. One would be to return to the model of social health insurance with central price and supply regulation, which was the dominant model from 1980 to 2000. The other would be a transformation into a tax-financed single payer model with public providers (National Health Service). Creating a Dutch NHS is supported by the Socialist Party alone (with 10% of votes) and, apart from being alien to the Dutch corporatist policy model, would clearly involve huge transition costs.

Whether a return to the policy model of the 1990s is feasible is also doubtful. While this model was effective in controlling overall spending on health, central rationing resulted in public dissatisfaction and long waiting times, which were successfully challenged in Dutch courts and at the European Court of Justice (Schut and Van de Ven, Reference Schut and van de Ven2005). The courts’ decisions stipulated that patients with social health insurance were entitled to prompt treatment, either in the Netherlands or abroad, which meant that strict rationing policies were no longer possible in the context of social health insurance. This provided an additional rationale for the 2006 reforms.

Maarse and Paulus conclude that there are good reasons to argue that the future of the market reform is uncertain. However, they do not appear to recognize that there is no politically viable alternative.