Healthcare Insurer Premium Increases: Understanding the Reasons and Solutions

The premium increase for the basic insurance policies of the four largest health insurers was lower than expected, but policyholders did pay more on their premiums for the fourth year in a row. CZ increases the premium monthly by 7.60 euros, Zilveren Kruis by 8.50 euros, Menzis by 5.50 euros and VGZ by 5 euros. They announced this on Thursday and Friday.

The cabinet predicted an increase of 12 euros per month on Budget Day, which the insurers managed to limit. The monthly costs for insured people with ‘the big four’ amount to 145.85 euros (CZ), 146.95 euros (VGZ), 147.45 euros (Zilveren Kruis) and 146.75 euros (Menzis). Just like last year, an aging population, inflation and higher personnel costs (partly due to higher salaries) are the main reasons for the premium increases.

Previously, health insurer DSW – traditionally the first – announced that the premium will increase by 11.50 euros per month, the largest increase since the introduction of regulated market forces in the health care system in 2006. The reserves have shrunk to such an extent in recent years that DSW has could not use it at first to limit the premium increase, said chairman Aad de Groot.

Menzis (1.9 million policyholders) is using 10 million euros in reserves – considerably less than last year, when it allocated 50 million euros to dampen the premium increase. To keep the premium lower than expected, the insurer had to “take a critical look at what care we purchase and how much we pay for it,” says financial director Dirk Jan Sloots.

Many ‘transformation plans’ healthcare providers

CZ (4.1 million policyholders), like DSW, will not use any reserves this year. According to director Joep de Groot, this was not necessary because CZ could sufficiently limit the premium increase with “competitive purchasing”. In addition, CZ wants to keep reserves for investments that must be made in the coming year with healthcare providers to innovate and digitize.

Last year, health insurers warned that the situation in healthcare is unsustainable due to ever-increasing costs and major staff shortages. This year they repeat that call, although they see that the transition needed in healthcare has started in the past year. “Now it is important to accelerate,” said Joep de Groot, chairman of health insurer CZ.

According to insurers, the transition in healthcare has started

What that transition should look like was laid down last year in the Integrated Care Agreement (IZA), an agreement between the Ministry of Health, Welfare and Sport (VWS) and parties from the healthcare sector (such as health insurers and healthcare providers). The agreement was mainly reached out of the need to curb the sharply rising healthcare costs and relieve the pressure on personnel. Major themes of the agreement are digitalization and ‘appropriate care’: remote care, via a video consultation with the GP, for example, and a stricter focus on who needs which treatment.

De Groot from CZ thinks it is logical that the message from health insurers has remained unchanged this year despite these agreements. “My spokesperson also asked: can’t you tell that in a nicer way, otherwise you’ll be telling the same story again. Very cool agreements have been made with the IZA. But it is a long-term story. Every major transition takes time.” He does see that the “realization” that change is necessary has sunk in. “We see many transformation plans coming in from healthcare providers.” The cabinet made 2.8 billion euros in ‘transformation funds’ available for IZA investments, for which healthcare parties can submit applications through insurers and VWS.

For example, the Elisabeth-TweeSteden Hospital in Tilburg is implementing a digitalization plan in collaboration with CZ and VGZ: patients can schedule appointments online and a ‘self-measurement square’ has been set up where patients can measure their blood pressure and heart rate themselves. This should reduce administrative burdens for healthcare providers.

There is also more cooperation between health insurers and healthcare providers, says Georgette Fijneman of Zilveren Kruis (4.9 million insured people), and more regional organization is taking place. This means that the largest health insurers in a region make agreements with healthcare providers about certain forms of care, and that the other insurers follow those agreements. “Equal contracting,” Marjo Vissers, chairman of VGZ, calls it. “The largest insurers in the region know what the biggest challenge is there – for example digitalization in hospitals – and we are all focusing on that.”

Low fees

In addition to Menzis and CZ, VGZ and Zilveren Kruis also mention competitive healthcare purchasing as a way to limit premium increases. Health insurers purchase care from healthcare providers. This is preceded by negotiations about rates and volume. Purchasing less care and at low reimbursements saves costs for the insurer, and therefore for the premium payer, but can worsen the financial situation of providers and therefore result in longer waiting lists and lower quality care. During contract negotiations between healthcare institutions and health insurers at the end of last year, healthcare institutions warned that the reimbursements offered by insurers were insufficient.

Sloots from Menzis also sees that healthcare providers are under pressure. “But on the other hand, we feel the pressure from society and politics that we cannot spend an infinite amount of money on care.” De Groot of CZ says that it is “unavoidable” that healthcare providers encounter so-called turnover ceilings, meaning that the purchased care is not enough for them. But purchasing more causes costs to rise too quickly. “It remains a challenge every time to keep healthcare good and affordable.”

Purchasing care is not only about rates, says Vissers from VGZ – “although we are always keen on that” – but also about “smarter organization of care” where people can do more themselves and care staff are relieved, as agreed in the IZA. She mentions ‘eye drop glasses’ as an example: those glasses with holes for eye drops make it easier for people to put drops in their own eyes. “On average, the community nurse spends four hours a week on this per drip patient. We can now use this for clients who need it more.”

According to Sloots, the IZA is an effective tool for achieving the transition in healthcare, but it does not solve everything. “We will also have to adjust our expectations about when we will or will not be treated, and when we will or will not receive expensive medicines. What care we receive in a nursing home, and what needs to come from the family. We are used to good care being widely available. But that is a luxury when money and labor become scarce.”

2023-11-10 19:54:33
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