A new NHS for a new age: let’s go Dutch
Many people are critical of the NHS at present. But few have put forward any workable suggestions to improve it.
The Netherlands has arguably one of the best healthcare systems in the world. So it useful to look at it (and other similar systems) to find out why it works so well. If a business is not working, its normal to look at businesses that do work.
So, in this article we will look at the excellent Dutch healthcare system, and see how it could be applied to the UK.
The argument for change
The NHS is currently performing very poorly. We know it. The public knows it. The government and both main parties know it.
The NHS’s poor performance is nothing to do with COVID-19 (though that did not help). All the major markers of NHS performance went past the Tipping Point in 2017. There are over 7.6 million people waiting for surgery (or similar) at present.
NHS England’s recent response is to refashion cancer targets, which is unlikely to lead to any improvement in cancer performance which is also poor. The costs of the NHS continue to spiral out of control, with funding at record levels, and healthcare taking an increasing proportion of GDP to do so. More money is not the answer.
In this article, a new NHS for the new age is proposed. This will be a universal social insurance system modelled on the Dutch system. This is a socialised healthcare system like ours, but works quite differently. In fact, many other developed countries (Switzerland, France, Germany, Australia, and Israel) have something similar – and have significantly better outcomes to the NHS, with a similar proportion of GDP spent on healthcare (10%).
Healthcare in the Netherlands
The Netherlands has a universal social health insurance system that has merged public and private insurance, and medicine. It is financed through a combination of mandatory medical insurance, income-related health contributions (see below), and a smaller central government contribution. It provides a high standard of medical care to all residents, no matter their income.
The Ministry of Health, Welfare, and Sport is responsible for healthcare in the Netherlands, offering guidance through their department National Institute for Public Health and the Environment (Rijksinstituut voor Volksgezondheid en Milieu, RIVM).
It is noteworthy that the Ministry of ‘Health’ is part of a construct that oversees welfare and sport, perhaps indicating a more co-ordinated approach to preventative medicine in the Netherlands, which is not a focus of the NHS. Also, the Netherlands bats above their weight in many sports, including football (and now cricket!). Every year, the Dutch government re-evaluates the healthcare needs of the Dutch population, to determine what will be covered by the system and what is not.
Politics and healthcare
Thus, in contrast to many other European systems (including the UK), the Dutch government is responsible for the accessibility and quality of the healthcare system, but is not in charge of its management. This separation has advantages. For example, healthcare is nearly apolitical. Thus it is used less as a political football, with the healthcare system constantly being reorganised by new governments.
The rationale for this is that the insurers are more successful at negotiating with providers than government (i.e. NHS England in England); thus reducing overall cost more than would be achievable by setting government mandated tariffs.
So what is the role of government? The national government has overall responsibility for: setting health care priorities; introducing legislative changes when necessary; and monitoring access, quality, and costs in a market-based system.
History of healthcare
The country began its national health insurance programme in 1941. Initially the system was based on the German Bismarck model of public and private health insurers. Under this, employers and employees were responsible for funding their health insurance system through ‘sickness funds’ deducted from payrolls. But anyone earning above a certain amount was required to buy private health insurance rather than accessing the public system. Costs became an issue.
So, in 2006, the Health Insurance Act (Zorgverzekeringswet, ZVW) combined the traditional public and private insurance markets into one universal social health insurance system – underpinned by mandatory basic medical insurance, and optional additional health insurance.
Netherlands health insurance has two components:
- The ZVW (Zorgverzekeringswet) requires all residents in the Netherlands to purchase a basic national medical insurance. Residents pay a monthly fee, which can be subsidised by government assistance for low-income applicants. A key feature of the Dutch system is that premiums do not be relate to health status or age. So health insurers are not allowed to refuse anyone, for example, if they high risk individuals – as they do in the USA and New Zealand
- The second element, the WLZ (Wet langdurige Zorg) system covers long-term nursing care (e.g. for people with dementia) and other long-term mental and physical problems (e.g. crutches, which are returned after a broken leg). Dutch residents aged 18 years and older pay for this through a monetary contribution from taxable income. This system was laid down in the Wet langdurige zorg (‘General Law on Longterm Healthcare’), which first came into effect in 1968 under the name of Algemene Wet Bijzondere Ziektekosten (AWBZ).
Healthcare outcomes in the Netherlands
According to the nonprofit think tank Foundation for Research on Equal Opportunity (FREOPP), the Dutch healthcare system is ranked third best in the world (2020). The high quality and effectiveness of the system is perhaps why the Netherlands was named the eighth healthiest country in the world (2021). The overall life expectancy is 81.5 years old, almost one year higher than the EU average of 80.6 years.
Cost of Dutch healthcare compared to other European countries
In 2019, the Netherlands spent €97 billion on healthcare (or over €5,600 per inhabitant). This is around 10.2% of the GDP, which is slightly above the EU average of 9.9%. This is similar to the cost of healthcare in the UK.
Mandatory medical insurance
All residents who are 18 years or over, who live in the Netherlands, must have mandatory medical insurance (ziektenkostenverzekering). This covers the cost of any medical care, should they need it. Adults choose their policy as individuals, there is no family coverage.
Children under the age of 18 are covered by the insurance policy of their parent or guardian. Moreover, basic dentistry (i.e. not orthodontics) is free for minors, regardless of their parent’s policy.
The government annually readjusts the coverage package, but it includes visits to the GP, hospital visits and specialist care, medication, medical devices, and mental healthcare.
However, there are some exceptions to these rules. For example, members of the Netherlands’ armed forces do not have to pay mandatory insurance as their contributions are paid by the Ministry of Defence.
Cost of Dutch health insurance per person
In 2023, the average cost of ZVW medical insurance is €1,661.40 per year (or €138.45 per month).
Another healthcare cost for people in the Netherlands is a deductible excess (eigen risico) which is the maximum amount paid by the policyholder before health insurance kicks in. The standard deductible excess in 2022 was €385 per year.
The government subsidises the monthly ZVW fee in people with lower incomes. If your joint yearly income is under €25k, you get a monthly benefit of €265 per couple, or €154 per individual. Between a yearly income of €25-48k, this benefit is reduced linearly to €0. €48k per year is the average income in the Netherlands.
The WLZ (Wet langdurige Zorg) system is paid for by contributions from employer and employee. The maximum employer’s WLZ contribution is 6.7% of the employee’s salary (for an income up to €66,956 per year, with a maximum of €4,473). The employee pays a healthcare contribution of 5.4% out of their salary, which is deducted at source by the employer, who pays both to the Dutch tax authorities.
Furthermore, for freelancers and self-employed people, the contribution of 5.4% also applies. This is then payable through filing of the Dutch personal income tax return.
Additional health insurance
Although additional health insurance is optional, it is very common to have in the Netherlands. In fact, in 2022, 83.7% of the population had a supplementary insurance policy. Depending on the insurer, these add-ons cover medical costs such as dentistry, long-term physiotherapy, optometry, menopause care, additional post-natal care (e.g. breastfeeding or lactation consultant) and in some cases, alternative medicine.
Depending on the extra coverage, additional health insurance costs an extra €120-960 per year (or €10-80 per month).
General practice
As in the UK, you must be registered with a local primary care doctor (general practitioner, called a huisarts). This doctor is first point of contact for nearly all non-emergency-related medical services, including getting a prescription (voorschrift). They operate from a general practice (huisartsenpraktijk) and are located across every city.
The practice is usually staffed by one or more doctors, as well as doctor’s assistants and practice nurses (praktijkondersteuner huisartsenzorg, POH). POHs take care of a wide range of things, including basic mental healthcare and cervical smear tests (uitstrijkje).
You can schedule an appointment by phone, or on their website. There are no longer any walk-in appointments (as in the UK). Although some allow you to book a meeting with a specific doctor, you may not see the same person each time you visit.
Opening hours are usually 08.00-17.30 Monday to Friday, and are closed on the weekends.
Also, the Netherlands has a network of about 160 primary care walk-in centres (huisartsenpost), open 24 hours a day, 7 days a week – making an open clinic within easy reach. However, these often charge extra fees. GPs are required to provide at least 50 hours of this out-of-hours care annually to maintain their registration.
Hospitals in the Netherlands
If people have an emergency and need an ambulance, they need to call the pan-European emergency number (112). For non-life-threatening emergencies (e.g. heavily sprained ankle), the public can contact their GP who will refer them to the nearest emergency care service (spoedeisende hulp), located inside a local hospital (ziekenhuis).
The Netherlands has over 110 hospitals. These include:
- University hospitals (Universitair Medisch Centrum, UMC)
- General hospitals (algemeen ziekenhuis)
- Children’s hospitals (kinderziekenhuis).
Patients are given a bed in a shared room with up to six beds (mixed gender).
Crucially a per-case payment system exists for hospital, encouraging hospitals (and doctors that work there) to want to be productive. No such system exists in the UK, which may in part be due to the poor productivity of the NHS, and lack of drive to deal with its massive waiting lists.
Electronic patient records (EPRs)
GPs, pharmacies and hospitals, use electronic patient records (EPRs). In hospitals, computerised medication ordering and medical imaging systems (PACS) are widely accepted.
Whereas healthcare institutions continue to upgrade their EPR’s functionality, the national infrastructure is still far from complete (as in the UK). There is a national EPR but it is really a virtual EPR and is a reference server which ‘knows’ in which local EPR and what kind of patient record is stored.
Number of doctors and nurses
The Netherlands has an average/high number of doctors and nurses. In 2021, there were 3.7 doctors and 10.7 nurses per 1,000 inhabitants, compared to the EU average of 3.9 and 8.4 respectively. An above-average proportion of doctors work as GPs; 24% of all doctors are general practitioners compared with the EU average of 21%.
Interestingly, about 2.7% of the doctors are from overseas, as compared with the United Kingdom, where almost 30% are. In other words the Netherlands train approximately the ‘right’ numbers of doctors for their population.
What happens if you refuse to take out medical insurance?
From the age of 18 years, it is mandatory to take out yearly medical insurance.
The uninsured are fined, and their insurance premiums may be levied directly from income (paying 120% of normal costs). But people who conscientiously object to insurance can opt out by making mandatory contributions into a health savings account.
Why is this opt-out available? Specific minority groups in Dutch society, most notably certain branches of orthodox Calvinism and Evangelical Christian groups, refuse to have insurance for religious reasons. To take care of these religious principled objections, the Dutch system provides a special opt-out clause.
The individual can draw from this account for paying medical bills. However if the account is depleted, one has to find the money elsewhere. If the person dies and the account still contains a sum, that sum is included in the inheritance.
The set of rules around the opt-out clauses have been designed in such way that people who do not want to be insured can opt out but not engage in a free ride on the system. However, ultimately health care providers are obliged to provide acute health care irrespective of insurance or financial status.
At the end of 2019, the number of uninsured people in the Netherlands was just under 25,000, less than 0.15% of the population.
Dutch health insurance companies
There are 20 Dutch healthcare companies operating in the Netherlands, as well as a number of international insurance providers. Most health insurance companies in the Netherlands are not-for-profit organisations, where any profits go into the reserves that they are required to maintain, or towards lowering premiums.
Health insurance companies in the Netherlands include:
- Allianz Care
- Cigna Global
- FBTO
- ONVZ
- United Consumers
- Zilveren Kruis.
Whichever is chosen, a person can only change policies once a year from mid-November to December.
Co-payments
These insurance policies only cover healthcare providers that have entered into a contractual arrangement with the insurer’s company. When consumers seek medical services outside their plans’ pre-defined providers, they may have to pay a copayment.
For example, imagine you want to visit a specialist in Manchester, whom everyone you know has recommended, but who is not on your particular insurance plan. You will have to pay a greater part of their fee than you would have had if you had visited a doctor who was on the ‘approved list’ of your healthcare insurer.
This system doesn’t work that well. The premium to get healthcare ‘outside’ your insurer is hefty (up to 50% of monthly contribution). But the larger insurance companies have contracts with most providers.
Arms-length bodies
As in the UK, a number of arm’s-length (independent) agencies are responsible for setting operational priorities.
At the national level, the Health Council advises government on evidence-based medicine, health care, public health, and environmental protection.
The Medicines Evaluation Board oversees the efficacy, safety, and quality of medicines. This is equivalent to the Medicines and Healthcare products Regulatory Agency (MHRA) in the UK.
The National Health Care Institute assesses new technologies for efficacy and cost-effectiveness, and advises the Ministry of Health on whether to include those technologies in the mandatory basic insurance package. This is equivalent to the National Institute for Health and Care Excellence (NICE) in the UK.
The Health Care Inspectorate supervises the quality, safety, and accessibility of care. This is equivalent to the Care Quality Commission (CQC) in the UK. Self-regulation by medical doctors is also an important aspect of the Dutch system.
Health information technology (IT) is not centralised in one body. The Union of Providers for Health Care Communication (Vereniging van Zorgaanbieders voor Zorgcommunicatie) is responsible for the exchange of data via an IT infrastructure. In other words, there is no equivalent to NHS Digital in the Netherlands. But NHS Digital has failed in its primary task to ‘join up’ your healthcare information in the UK.
The Dutch Health Care Authority (Nederlandse Zorgautoriteit) has primary responsibility for ensuring that medical insurance system, health care purchasing, and care delivery markets, all function appropriately.
The Dutch Competition Authority (Autoriteit Consument en Markt) enforces antitrust laws among both insurers and providers.
Conversion of the NHS into a Dutch-style system
In such a system, organisations like NHS England (and its regions), Integrated Care Boards (ICBs) and Primary Care Networks (PCNs) would become redundant. They would need to be disbanded.
ICBs could continue to exist in the short-term, and act as providers of healthcare, until the new system is up and running and healthcare insurers are in place.
Regulatory and other arms-length bodies such as NICE, CQC, GMC and MHRA should continue, partly to make them independent of the new system.
Such a significant transformation would take 2-3 years, and require 3 or more Acts of Parliament. It would not be easy or without ups and downs. There would be resistance from some current stakeholders (especially doctors/BMA who ‘like’ the freedom/power they currently have), and unpredicted challenges. But long-term, the reward of better healthcare for the population could drive it through.
The alternative is to do nothing, or make minor changes to the current NHS (which seems to be the plan of both main political parties). These approaches will lead to no improvement in health outcomes, will not deal with waiting lists or improve longevity (which is falling in the UK). And the cost of the NHS will continue to spiral out of control.
Initiatives could be invited from stakeholders to add to a Dutch-style system, and give it a ‘British-style’. For example, a new public health system could become part of each health insurer, and whose funding is top-spliced from each of them (2% of their income?). This would focus the mind of each insurer on preventative medicine – i.e. as their profits increase, so do funds available to public health. General practice could also have new incentives to focus on preventative medicine – many feel this is not a major priority in the UK.
Good communications and a public education programme would clearly be necessary.
Conclusions
We are proposing that the UK (or England at least) replaces the NHS, whose basic structure has not changed since 1948, with a universal social insurance healthcare system similar to the Dutch model. This will be heavily managed market depoliticised from government.
If we do not change the NHS radically, we believe health outcomes will continue to worsen, and a greater proportion of GDP will be required for healthcare. Education, defence, transport etc will suffer. People with higher incomes will have a private GP and private health insurance. We will slip into a two-tier ‘winner takes all’ system such as in the USA; that consumes 17% of GDP and leaves most people with poor quality basic care.
This is already happening. New (and some very large) private hospitals are being built in the UK now. Most are American, e.g, the Cleveland Clinic, Mayo Clinic and Health Corporation of America (HCA). Private general practice is also spreading rapidly arund the UK
But there is time for the UK to follow a new path, a time to modernise and change. If we want an effective NHS, we all need to pull together and make it happen – public, health professionals and government. And whichever party is elected in the next general election, the new government will need to be bold and show leadership – or explain to the British public five years later why the NHS is still providing healthcare inappropriate for a developed country.
Note. NHS in three nations
The model proposed in this paper is suggested for England. Healthcare is devolved in the UK, with Scotland, Wales and Northern Ireland having their own systems. They could be invited into this new NHS. Alternatively they could choose to stay outside it and be a useful ‘control system’, to compare performance and outcomes in the new NHS model.
Summary
We have described A new NHS for a new age: let’s go Dutch. We hope you have found it interesting.
Other resource
The Healthcare Financial Management Association (HFMA) is the professional body for finance staff working in healthcare in the UK. This is one of their recent papers: Healthcare in the Netherlands: An overview and comparison with the United Kingdom (HFMA, 2022).
