Can the Dutch Lead us to Sensible Healthcare Reform?

A thought provoking piece appeared in this morning’s LA Times written by David Lazarus and urging healthcare reform efforts should begin without preconditions. “The employer-based system isn’t our only choice,” he writes, “and we should be open to alternatives (while ensuring that whatever’s taken away from workers in terms of an insurance benefit is returned in the form of extra pay or tax credits to cover new expenses).”

Mr. Lazarus does not swing all the way in the other direction either. Though he admits he would like to, he does not advocate for a single payer system. What he does do is search for some middle ground where employers are relieved of the burden of providing health care, everyone receives medical coverage, and insurance carriers are encouraged to compete for market share by keeping prices low.

A pipe dream? Can’t do it? Mr. Lazarus suggests that it can be done and has been done in the Netherlands, another country which previous had an employer-based system. He explains that until 2006, the Dutch combined employer-based coverage with individual policies as well as a government-administered insurance program. This became unwieldy and inefficient.

The Dutch introduced a system two years ago that did away with employer-based plans and government insurance, replacing them with a mandate that everyone buy individual policies.

At the same time, the government said it would play a more active role in keeping prices competitive and thus prevent individual policies from soaring in cost.

Lazarus quotes Pauline Rosenau, a health professor at the University of Texas, who says the U.S. should be looking to the Netherlands for guidance — about what to do and what not to do.

Rosenau is quoted as saying, “We can avoid their mistakes. We need to create a system that allows insurers enough freedom to operate, but at the same time regulates them so they compete on price, not on being able to avoid the very sick.”

“What’s clear,” Mr. Lazarus writes, “is that our own reform efforts should begin without preconditions. The employer-based system isn’t our only choice, and we should be open to alternatives (while ensuring that whatever’s taken away from workers in terms of an insurance benefit is returned in the form of extra pay or tax credits to cover new expenses).”

Health Plan Innovation Take: Mr. Lazarus is right. We should not take the employer-based health care system off the table just because the 180 million people who currently receive coverage from employers seem to be content. This discussion should be about improving access and quality of care while lowering costs. If there are better models that utilize the private sector, and are proven to work, we should be taking a good hard look at them.

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