Managed Competition for Medicare? Sobering Lessons from the Netherlands | Health Policy and Reform

Perspective
Managed Competition for Medicare? Sobering Lessons from the NetherlandsNEJM | June 15, 2011 | Topics: International, Medicare and Medicaid
Kieke G.H. Okma, Ph.D., Theodore R. Marmor, Ph.D., and Jonathan Oberlander, Ph.D.

Discussions about U.S. health care reform are often parochial, with scant attention paid to other countries’ experiences. It is thus surprising that in the ongoing debate over Medicare, some U.S. commentators have turned to the Netherlands as a model of regulated competition among private insurance companies.1 The Dutch experience is particularly relevant given the proposal by Congressman Paul Ryan (R-WI) to eliminate traditional Medicare and instead provide beneficiaries with vouchers to purchase private insurance. (The Republican majority in the House passed the Ryan plan as part of the 2012 budget resolution, but it was defeated in the Senate.)

It is easy to understand why Dutch health care — which does rely on regulated private insurance — would appeal to advocates of Medicare vouchers. Indeed, U.S. ideas about managed competition helped to shape health care reform in the Netherlands.2 But careful examination of the Dutch experience shows that insurance competition has not produced the expected benefits and in fact has created new problems, calling into question the merits of this reform model and its suitability for Medicare.

Before 2006, the Netherlands had a mixed health insurance system, with more than 60% of the population covered by mandatory social insurance, administered by nonprofit sick funds. The remaining population had private insurance, voluntarily purchased, and the uninsured rate was about 1.5%.

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Managed Competition for Medicare? Sobering Lessons from the Netherlands | Health Policy and Reform