Nov19

Update 19 November 2024

Update 19 November 2024

Winter is coming! It is cold and grey outside, and the central heating is working hard. Welcome back to another update on the Dutch healthcare market. This update covers the following news items:

  • Physiotherapists want minimum tariffs. How are tariffs currently set?
  • Comparison of the Dutch elderly care market to other countries. What can the Netherlands do differently?
  • In a snapshot we give an overview of CumuluZ, an organization focusing on improved data connectivity between Dutch healthcare providers

Physiotherapists want minimum tariffs

In the Netherlands, the standard system for setting tariffs for healthcare related activities is that the Dutch Healthcare Authority (NZA) sets a maximum tariff based on the average costs to provide the service. In most cases, where contracts are made between healthcare service providers and insurance companies the actual tariff paid will depend on the negotiation process and will always be lower (3-8%) than the max tariff set by the NZA. Dental healthcare is not covered by compulsory healthcare insurance (but typically by additional insurance). As the dental care providers typically do not have contracts with the insurance companies, the max tariff calculated by the NZA is used by most dentists as their commercial tariff.

Physiotherapy is also not covered by the Dutch compulsory healthcare insurance scheme. Physiotherapy is viewed as a commercial service and the NZA does not provide a maximum tariff, leaving pricing up to the individual organizations providing these services and negotiations with the insurance companies (for those clients paying physiotherapy through additional insurance). Physiotherapy covered by additional insurance is a large part of the overall market, and their tariffs set by insurance companies are key for the overall economics of the physiotherapy sector. Costs of physiotherapy are also a large part of the expenditure of insurance companies on their additional insurance packages.

Insurance companies face pressure to keep their tariffs for additional healthcare insurance as low as possible and have therefore minimized increases in physiotherapy tariffs. The national organization for physiotherapists (KNGF) has recently sent a letter to the NZA and Parliament explaining that current tariff levels do not cover costs and that this leads to an outflow of physiotherapists due to low salaries. The KNGF claims that the low tariffs are due to “market failure” and must be addressed by the NZA by setting a minimum tariff. Parliament has agreed, and the NZA will conduct an analysis and come with recommendations in 2025.

The physiotherapy sector is becoming increasingly important as it reduces the workload of other primary care providers such as GPs, and helps control costs as physiotherapy is often a lower-cost option than hospitals and medical specialists. The sector is also going through a consolidation process with the appearance of larger chains and professional owners (including private equity). It will be interesting to see what the consequences of the NZA analysis will be on the overall attractiveness of the sector.

Comparison of Dutch elderly care market to other countries

CBRE has recently published (in Dutch) a report comparing Dutch elderly care to that in other countries. Although some of their recommendations are probably not 100% neutral their analysis and conclusions are interesting.

  • CBRE have analyzed the relationship between the share of population older than 75 in a country and spending on long term care as percentage of GDP. The worrying conclusion is that the Netherlands currently has a relatively low share of elderly people compared to countries such as Finland, Germany, Italy, etc. but has a much higher spend on long term care
  • Another interesting point made by CBRE is that the Netherlands spends a much larger share of total spend on intramural care, while other countries in the comparison focus much more of their total spend on home care. In the Netherlands spend on homecare has also grown much slower (7% since 2016) than intramural care (28% since 2016).

Finland is seen as the example for the Netherlands to follow. Finland spends a smaller share of GDP on long-term care, and almost 85% of the spend is for home care. Through the focus on homecare, prevention, and development of senior / assisted living solutions long term care costs have actually declined by 3% in the last four years.

The CBRE analytics are worrying because they highlight the financial challenges that the Netherlands will have as the growth of the elderly population fully kicks in. Comparisons to other countries are often difficult due to differences in culture, financing models, regulations, etc., but the analysis does highlight that a move towards more prevention and improved alternative living solutions for the elderly (clustered retirement communities, etc.) are an important part of the solution.

Snapshot of a Dutch healthcare organization: CumuluZ

The CumuluZ Coalition was started by two umbrella organizations for Dutch hospitals and some independent hospitals with the goal of improving the availability of client / patient data. They believe that this should be a public responsibility and have been focused on developing data hubs and a country-wide data network. In 2023 the coalition conducted two regional pilots and these will be expanded in 2024 and 2025. The overall goal is to connect all healthcare providers and to move from a focus on transfer of data to a focus on data availability. This involves client / patient information being directly available to participating organizations according to agreed standards and formats. Recently, the organization has been transformed into a foundation and umbrella organizations from other healthcare sectors have agreed to join the effort to develop a cross-sector data transfer solution.

Improving data availability for patients and between healthcare providers is clearly an area that needs improvement. One of the challenges will be how to coordinate between different providers of data services, especially when many of them are commercial organizations such as ZorgDomein.