Update 4 May 2021

Update 4 May 2021

This has been the coldest April in 35 years here in the Netherlands. Hopefully, May will bring spring and the opportunity to enjoy the outdoor cafes that have now been allowed to open. In this update we cover:

  • Buyers of healthcare insurance more risk averse. Is this a permanent change?
  • General hospital stops provision of psychiatric care. Is this another step in the ongoing portfolio rationalization in the healthcare sector?
  • In our snapshot we give  an overview of DC Klinieken, a chain of specialized medical clinics

Buyers of healthcare insurance are more risk averse

In the Netherlands we have a system of compulsory healthcare insurance as the main financing method for cure-related healthcare activities (primary care, hospitals, medicine, psychiatric care, etc.).Everybody living in the Netherlands must have an insurance policy costing approximately €120/month. In combination with financing from employers, this covers almost all medical expenses. The system is administrated by five large and a limited number of smaller insurance companies who collect premiums and purchase healthcare services from providers.  At the end of every year, we must decide which company to buy the insurance from, how much own risk we wish to take on ( from a minimum of €385 per year to a maximum of €885 per year) and whether we wish to buy supplemental insurance covering dentistry, physiotherapy, and other additional services.

At the end of every year the insurance companies spend a large amount of money to try to convince people to switch provider. The share of people switching is limited (typically between 6.0 – 7.5%). However, for 2021 there was a clear growth in the (already high) share of people taking supplemental insurance (from 83.2% in 2020 to 84.9% in 2021). For own risk there was a movement in the opposite direction with a decline in the (already low) share of people taking on additional risk from 13.3% in 2020 to 13.1% in 2021.

The most probable cause for these changes is corona. On the one hand people are more aware of the probability of getting seriously ill leading to more supplemental insurance. On the other hand, economic uncertainty (loss of jobs, etc.) leads to people taking fewer financial risks. It will be interesting to see whether these indicators change back when times becomes more normal.


Hospital stops providing psychiatric care

The Antonius Hospital is located in the province of Friesland (in the northern part of the country). Antonius was one of the few remaining general hospitals providing psychiatric care, but it has announced that no new patients will be accepted as of 1 May. This can be seen as another step in the ongoing portfolio rationalization of Dutch healthcare in general and hospitals specifically.

General hospitals are facing increasing pressure from insurance companies to stop more specialized activities where their  volumes are low and to focus on emergency care and more general activities. Psychiatric care is certainly an activity that can better be provided by more specialized organizations and stopping this activity at Antonius therefore makes sense. What will be the next activities to be taken away from general hospitals and moved either to specialized clinics or primary care? How will the general hospitals restructure themselves for this new reality?

Snapshot of a private Dutch healthcare operator : DC Klinieken

DC Klinieken was started by Loek Winter in 1995. In addition to DC Klinieken, Loek Winter is the owner of Thomashuizen, De Herbergier and De Seizonen (long-term disabled care). He was also the owner of the Ijsselmeer and Slotervaart Hospitals, both of which went bankrupt in 2018.

DC Klinieken are a chain of 13 locations (plus HQ) that employs 600 healthcare professionals and has revenues of €50-60 million. The chain provides a broad range of plannable specialized medical care but has a focus on radiology, pain treatment, gastrointestinal care, and skin / allergy care. In addition to Loek Winter, Rabo Private Equity is an investor in the company since 2012.