Update 12 October 2017
Welcome to the newest update on private healthcare in the Netherlands. In this newsletter we cover the following news and issues:
- Coalition manifesto from new government is presented giving mixed messages for the Dutch healthcare sector. What does it mean for potential international entrants?
- One of the most interesting financing forms in the long-term care in the Netherlands are Personal Budgets (PGB). How does this work?
- In our snapshot we give an overview of NoviCare, an organization that provides medical care to the patients of Dutch elderly care operators.
Coalition manifesto gives mixed messages to healthcare sector
The new Dutch coalition government consists of four parties (VVD, CDA, D66, ChristenUnie) with a razor-thin majority. After months of negotiations the four parties have finally agreed on the key issues for their government. Tuesday this week the coalition manifesto was published. The manifesto gives an overview of the key issues that the new government will work on and provides a first insight into key policy decisions that new government wants to implement. Healthcare played a prominent part, covering six of the 68 pages.
The key health-related message is that the government is not planning any major reforms of the healthcare system, but rather wants to focus on incremental improvements. The reactions from the sector have been mixed. Hospitals and home care organizations are unhappy concerning suggested savings, while insurance companies are positive because of statements about moving activities from hospitals to primary care.
For international organizations interested in the Dutch market the key statements in the manifesto are:
- Confirmation that €2.1 billion extra will be made available for elderly care
- The setting of a goal for savings totaling €1.9 billion in the curative sector
- A goal to strengthen the difference between contracted and non-contracted care (which could make it more difficult for startups without contracts with the insurance companies)
- A halving of the effect of assets on the determination of the level of co-payments for long-term care (making the use of commercial elderly care locations slightly less attractive)
- Personal Budgets are to be kept as an integral part of all payment forms (see next news item)
How do Personal Budgets (PGBs) work?
In the standard process for getting care-related services in the Netherlands, it is first decided what kind of care the client needs (the indication and the associated budgets). This is done either by the central indication organization or the municipality. The second step is that the insurance company or the municipality gives the client a limited choice of service providers. These are service providers that have a contract and have spare capacity.
Alternatively, the client can choose for a Personal Budget (in Dutch “Persoongebonden Budget” or a PGB). Choosing for a PGB means that the client (or representative) takes the responsibility for organizing his / her own care. To be allowed to do this there are several requirements:
- Proven ability from client (or representative) to handle responsibilities and administration
- Clear plan for the long-term care to be provided
- An acceptable contract with the service provider that clearly states the services to be provided
After being accepted the client gets an annual budget which is managed by the Social Insurance Bank (SVB), an organization that manages the payments of various government pensions, subsidies, etc. The service provider sends a monthly invoice to the client, who signs-off on the invoice and sends this to the SVB. The SVB then pays the service provider.
The key reason that many new providers choose for a PGB-approach is that following this route does not require a contract with insurance companies or municipalities. Getting such a contract is a time-consuming and difficult process with a relatively low success rate for new providers. Working with PGBs allows a new organization to market directly to clients. Although the payments via a PGB typically are 5-10% less than with a contract, and payments via the SVB can be slow, this allows a “flying start” for the new operation. When a new provider reaches a certain size, it is often in the interest of the insurance company and/or municipality to give the operator a contract. This is currently happening with some of the larger commercial elderly-care providers.
Snapshot of a Dutch private sector healthcare operator: NoviCare
NoviCare was established in 2008 by Hettie Suurd, who had worked for many years as a doctor in the elderly care. Her goal in establishing NoviCare was to provide better care to elderly patients with multiple chronic diseases. Currently, the main business of NoviCare is providing nursing homes the opportunity to outsource their (para)medical staff. NoviCare also offers services to elderly people living at home (under the label VitaalThuis). NoviCare also offers training courses, interim management and consultancy services.
NoviCare gives its employees maximum freedom in defining working hours, etc. Employees typically work at several client locations in varying multi-functional teams. NoviCare is focused on developing its employees and offers financial bonuses related to reaching quality targets.
NoviCare is owned by Hettie Suurd (still the CEO) and Gilde Healthcare.