Universal health insurance (UHI) on the Dutch model as promised by the Coalition would lead to a marked increase in healthcare costs, according to an internal document prepared in the Department of Health.

According to the document, which examined the experiences of countries that have introduced universal healthcare insurance, the impact in the Netherlands was to increase unit price costs, the volume and the net expenditure on healthcare.

The document, entitled “Experiences in a selection of universal health insurance countries with multi-payer competition”, was released to a Fianna Fáil deputy in response to a Dáil question.

The report was drafted in June 2013 by a special UHI unit in the department while James Reilly was still minister for health.

Doubts about feasibility

He was replaced a year later by Leo Varadkar, who has expressed doubts about the feasibility of UHI as originally planned.

The report found that total health expenditure in the Netherlands in 2011 was €37.5 billion. This represented a 12 per cent increase in costs compared to 2008.

“The overall increase of 12 per cent occurred over a period when the number of insured people increased by only 1.5 per cent. The vast majority (78 per cent) of the increase in costs is accounted for by hospitals. The cost of care by medical specialists accounted for €3.09 billion of the €3.9 billion increase,” it added.

The report also said competition between competing insurers increased the cost of regulation, monitoring and transaction fees and it was claimed the Dutch revenue commissioners had to hire an extra 500 people to deal with the system.

Transparency infrastructure

“Dutch healthcare has witnessed the creation of a whole new infrastructure to create transparency in healthcare with regulators, insurers and patient organisations collecting data on the performance of healthcare providers, public and private organisations publishing data to support consumer choice of insurer and provider alike. Thousands of people now work in the transparency business,” the report said.

It added that there were also a number of question marks over the extent to which the model, as currently designed, would control overall costs and expenditure.

“The total costs of healthcare have risen. The rise in expenditure has not slackened since the Health Insurance Act was enacted. In fact, a substantial increase is apparent since that time in public expenditure on healthcare per employed person.

“This represents a distinct change in trend with costs continuing to rise in 2006 and thereafter but at a higher level. The increase was caused by the introduction of the mandatory basic insurance package in 2006; healthcare costs of policy holders who had previously been privately insured were now treated as public expenditure,” according to one authority quoted in the report.

Another authority said: “Demand for most health services increased dramatically and in part may have been driven by providers of care.”

OECD figures show health expenditure in the Netherlands as a percentage of GDP climbed from 9.7 per cent in 2006 to 12 per cent in 2011.