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The Dutch Health Care System

by Joost Wammes, Patrick Jeurissen, Gert Westert, and Marit Tanke, Radboud University Medical Center

What is the role of government?

In the Netherlands, the national government has overall responsibility for setting health care priorities, introducing legislative changes when necessary, and monitoring access, quality, and costs. It also partly finances social health insurance (a comprehensive system with universal coverage) for the basic benefit package (through subsidies from general taxation and reallocation of payroll levies among insurers via a risk adjustment system) and the compulsory social health insurance system for long-term care. Prevention and social support are not part of social health insurance but are financed through general taxation. Municipalities and health insurers are responsible for most outpatient long-term services and all youth care under a provision-based approach (with a high level of freedom at the local level).

Who is covered and how is insurance financed?

Publicly financed health insurance: In 2015, the Netherlands spent 10.8 percent of GDP on health care, and 77 percent (2014 estimate) of curative health care services were publicly financed. All residents (and nonresidents who pay Dutch income tax) are mandated to purchase statutory health insurance from private insurers. At the end of 2014, 30,000 people (less than 0.2% of the population) were uninsured. People who conscientiously object to insurance, as well as active members of the armed forces (who are covered by the ministry of defense), are exempt. Insurers are required to accept all applicants, and enrollees have the right to change their insurer each year.

Apart from acute care, long-term care, and obstetric care, undocumented immigrants have to pay for most health care themselves (they cannot take out health insurance). However, some mechanisms are in place to reimburse costs that undocumented immigrants are unable to pay. For asylum seekers, a separate set of policies has been developed. Permanent residents (for more than three months) are obliged to purchase private insurance coverage. Visitors are required to purchase insurance for the duration of their visit if they are not covered through their home country.

Statutory health insurance is financed under the Health Insurance Act, through a nationally defined, income-related contribution, a government grant for the insured below age 18, and community-rated premiums set by each insurer (everyone with the same insurer pays the same premium, regardless of age or health status). Contributions are collected centrally and issued among insurers in accordance with a risk-adjusted capitation formula that considers age, gender, labor force status, region, and health risk (based mostly on past drug and hospital utilization).

Insurers are expected to engage in strategic purchasing, and contracted providers are expected to compete on both quality and cost. The insurance market is dominated by the four largest insurance conglomerates, which account for 90 percent of all enrollees. Currently, there is a ban on the distribution of profits to shareholders.

Private (voluntary) health insurance: In addition to statutory coverage, most of the population (84%) purchases a mixture of complementary voluntary insurance covering benefits such as dental care, alternative medicine, physiotherapy, eyeglasses and lenses, contraceptives, and the full cost of copayments for medicines (excess costs above the limit for equivalent drugs—an incentive for using generics). Premiums for voluntary insurance are not regulated; insurers are allowed to screen applicants based on risk factors. Nearly all of the insured purchase their voluntary benefits from the same (mostly nonprofit) insurer that provides their statutory health insurance. People with voluntary coverage do not receive faster access to any type of care, nor do they have increased choice of specialists or hospitals. In 2014, voluntary insurance accounted for 7.9 percent of total health spending.

What is covered?

Services: In defining the statutory benefits package, government relies on advice from the National Health Care Institute. Health insurers are legally required to provide a standard benefits package including, among other things, care provided by general practitioners (GPs), hospitals, and specialists; dental care through age 18 (coverage after that age is confined to specialist dental care and dentures); prescription drugs; physiotherapy through age 18; home nursing care; basic ambulatory mental health care for mild-to-moderate mental disorders; and specialized outpatient and inpatient mental care for complicated and severe mental disorders. In case the duration exceeds three years, the last of these is financed under the Long-Term Care Act (see below).

Some treatments, such as general physiotherapy and pelvic physiotherapy for urinary incontinence, are only partially covered for some people with specific chronic conditions, as are the first three attempts at in vitro fertilization. Some elective procedures, such as cosmetic plastic surgery without a medical indication, dental care above age 18, and optometry, are excluded. A limited number of effective health improvement programs (e.g., smoking cessation) are covered, and weight management advice is limited to three hours per year.

As of 2015, home care is a shared responsibility of the national government, municipalities (day care, household services), and insurers (nursing care at home) and is financed through the Health Insurance Act. Hospice care is financed through the Long-Term Care Act. Prevention is not covered by social health insurance but falls under the responsibility of municipalities.

Cost-sharing and out-of-pocket spending: As of 2016, every insured person over age 18 must pay an annual deductible of EUR385 (USD465)1 for health care costs, including costs of hospital admission and prescription drugs but excluding some services, such as GP visits. Apart from the overall deductible, patients are required to share some of the costs of selected services, such as medical transportation or medical devices, via copayments, coinsurance, or direct payments for goods or services that are reimbursed up to a limit, such as drugs in equivalent-drug groups. Providers are not allowed to balance-bill above the fee schedule. Patients with an in-kind insurance policy may be required to share costs of care from a provider that is not contracted by the insurance company. Out-of-pocket expenses represented 14.7 percent of health care spending in 2014 (author’s calculation).

Safety net: GP care and children’s health care are exempt from cost-sharing. Government also pays for children’s coverage up to the age of 18 and provides subsidies (health care allowances), subject to asset testing and income ceilings, to cover community-rated premiums for low-income families: singles with annual income less than EUR27,012 (USD32,662) and households with income less than EUR33,765 (USD40,828). Approximately 4.42 million people, or about a quarter of the total population, receive allowances set on a sliding scale, ranging from EUR2.00 (USD2.40) to EUR83.00 (USD 100.00) per month for singles and from EUR10.00 (USD 12.00) to EUR 158.00 (USD191.00) for households, depending on income.

How is the delivery system organized and financed?

Primary care: There were more than 11,600 practicing primary care doctors (GPs) in 2015, and more than 22,585 specialists in 2013. Thirty-nine percent of practicing GPs worked in group practices of three to seven, 40 percent worked in two-person practices, and 22 percent worked solo (2015). Most GPs work independently or in a self-employed partnership; only 16 percent are employed in a practice owned by another GP.

The GP is the central figure in Dutch primary care. Although registration with a GP is not formally required, most citizens are registered with one they have chosen, and patients can switch GPs without formal restriction. Referrals from a GP are required for hospital and specialist care.

Many GPs employ nurses and primary care psychologists on salary. Reimbursement for the nurse is received by the GP, so any productivity gains that result from substituting a nurse for a doctor accrue to the GP. Care groups are legal entities (mostly GP networks) that assume clinical and financial responsibility for the chronic disease patients who are enrolled; the groups purchase services from multiple providers. To incentivize care coordination, bundled payments are provided for certain chronic diseases, such as diabetes, cardiovascular conditions, and chronic obstructive pulmonary disease (COPD).

In 2015, the government introduced a new GP funding model comprising three segments. Segment 1 (representing ?75% of spending) funds core primary care services and consists of a capitation fee per registered patient, a consultation fee for GPs (including phone consultation), and consultation fees for ambulatory mental health care at the GP practice. The Dutch Health Care Authority (Nederlandse Zorgautoriteit) determines national provider fees for this segment. Segment 2 (~15% of spending) consists of funding for programmatic multidisciplinary care for diabetes, asthma, and COPD, as well as for cardiovascular risk management; prices are negotiated with insurers. Segment 3 (?10% of spending) provides GPs and insurers with the opportunity to negotiate additional contracts—including prices and volumes—for pay-for-performance and innovation. Self-employed GPs earned average gross annual income of €97,500 (USD117,900) in 2012, while salaried GPs earned €80,000 (USD97,000).

Outpatient specialist care: Nearly all specialists are hospital-based and either in group practice (in 2015, 54% of full-time-equivalent specialists, paid under fee-for-service) or on salary (46%, mostly in university clinics). As of 2015, specialist fees are freely negotiable as a part of hospital payment. This so-called “integral funding” dramatically changed the relationship between medical specialists and hospitals. Hospitals now have the responsibility of allocating their financial resources among their specialists.

There is a nascent trend toward working outside of hospitals—for example, in growing numbers of (mostly multidisciplinary) ambulatory centers—but this shift is marginal, and most ambulatory centers remain tied to hospitals. Specialists in ambulatory centers tend to work most of the time in academic or general hospitals. Only a small minority of doctors working in hospitals choose to work part-time in ambulatory centers. Ambulatory care center specialists are paid fee-for-service, and the fee schedule is negotiated with insurers. Medical specialists are not allowed to charge above the fee schedule. Patients are free to choose their provider (following referral), but insurers may set different conditions (e.g., cost-sharing) for different choices within their policies.2

Administrative mechanisms for paying primary care doctors and specialists: The annual deductible (see above) is paid to the insurer. The insured have the option of paying the deductible before or after receiving health care and may choose to pay all at once or in installments. Other copayments—those for drugs or transportation, for example—have to be paid directly to the provider.

After-hours care: After-hours care is organized at the municipal level in GP “posts,” which are centers, typically run by a nearby hospital, that provide primary care between 5 p.m. and 8 a.m. Nearly all GPs work for a GP post. Specially trained assistants answer the phone and perform triage; GPs decide whether patients need to be referred to a hospital. Doctors are compensated at hourly rates for after-hours care and must provide at least 50 hours of after-hours care annually to maintain their registration as general practitioner. The GP post sends the information regarding a patient’s visit to the patient’s regular GP. There is no national medical telephone hotline.

Hospitals: In 2015, there were 89 hospital organizations, including eight university medical centers. Practically all organizations were private and nonprofit. In 2015, there were 231 independent private and nonprofit treatment centers whose services were limited to same-day admissions for nonacute, elective care (e.g., eye clinics, orthopedic surgery centers) covered by statutory insurance.

Hospital payment rates, through which doctors are paid, are determined through negotiations between each insurer and each hospital over price, quality, and volume. The great majority of payments take place through the case-based diagnosis treatment combination system, and the rates for approximately 70 percent of hospital services are freely negotiable; the remaining 30 percent are set nationally. The number of diagnosis treatment combinations was reduced from 30,000 to 4,400 in 2012. Diagnosis treatment combinations cover both outpatient and inpatient as well as specialist costs, strengthening the integration of specialist care within the hospital organization.

Mental health care: Mental health care is provided in basic ambulatory care settings, such as GP offices, for mild-to-moderate mental disorders. In cases of complicated and severe mental disorders, GPs will often refer patients to basic mental health care (e.g., a psychologist or an independent psychotherapist) or to a specialized mental health care institution. The delivery of preventive mental health care is the responsibility of municipalities and is governed by the Social Support Act.

A policy of further integration of general practice and mental health was agreed on in 2012, with the goals of ensuring that patients receive timely care from the right source and reducing the need for specialized care. For several years, policymakers have been aiming to substitute outpatient care for inpatient care, as reflected in the steady increase in the number of GPs who employ primary care psychologists.

Long-term care and social supports: A substantial proportion of long-term care is financed through the Long-Term Care Act (Wet langdurige zorg), a statutory social insurance scheme for long-term care and uninsurable medical risks and cost that cannot be reasonably borne by individuals. It operates nationally, and taxpayers pay a contribution based on taxable income. The remainder of services are financed through the Social Support Act. Long-term care encompasses residential care; personal care, supervision, and nursing; medical aids; medical treatment; and transport services. Cost-sharing depends on size of household, annual income, indication, assets, age, and duration of care. In 2015, copayments covered 8.7 percent of total spending in the compulsory long-term care scheme.

With funding provided through a block grant from the national government, municipalities are responsible for household services, medical aids, home modifications, services for informal caregivers, preventive mental health care, transport facilities, and other assistance, in accordance with the Social Support Act (Wet maatschappelijke ondersteuning). Municipalities have a great deal of freedom in how they organize services, including needs assessments, and in how they support caregivers (e.g., through the provision of respite care or a small allowance).

Long-term care is mostly provided by private, nonprofit organizations, including home care organizations, residential homes, and nursing homes. Most palliative care is integrated into the health system and delivered by general practitioners, home care providers, nursing homes, specialists, and volunteer workers.

Under the Health Insurance Act, the Social Support Act and the Long-Term Care Act, personal budgets are provided for patients to buy and organize their own (long-term) care. Under the Health Insurance Act and the Social Support Act, health insurers and municipalities are free to set “sufficient” budget rates (typically about 70% of in-kind rates), whereas under the Long-Term Care Act, budget rates are set nationally. Municipalities have a great deal of freedom in how to support caregivers, for example, through respite care or a small allowance.

diagram of health care system

What are the key entities for health system governance?

Since 2006, the Ministry of Health’s role has been to safeguard health care from a distance rather than managing it directly. It is responsible for the preconditions pertaining to access, quality, and cost in the health system, has overall responsibility for setting priorities, and may, when necessary, introduce legislation to set strategic priorities.

A number of arm’s-length agencies are responsible for setting operational priorities. At the national level, the Health Council advises government on evidence-based medicine, health care, public health, and environmental protection. The National Health Care Institute advises government on the components of the statutory benefits package and has various tasks relating to quality of care, professions and training, and the insurance system (e.g., risk adjustment). The Medicines Evaluation Board oversees the efficacy, safety, and quality of medicines. Decisions about the benefits package rest with the health minister. The Dutch Health Care Authority (Nederlandse Zorgautoriteit) has primary responsibility for ensuring that the health insurance, health care purchasing, and care delivery markets all function appropriately—for example, by designing and managing the diagnosis treatment combination system and setting prices for 30 percent of diagnosis treatment combinations. Meanwhile, the Dutch Competition Authority (Autoriteit Consument en Markt) enforces antitrust laws among both insurers and providers. The Health Care Inspectorate supervises the quality, safety, and accessibility of care. Self-regulation by medical doctors is also an important aspect of the Dutch system.3 Private insurers are tasked with increasing health system efficiency and cost control through prudent purchasing of health services.

The patient movement consists of a wide range of organizations, some for specific diseases and some functioning as umbrella organizations. The patient umbrella organization Nederlandse Patiënten Consumenten Federatie conducts a range of activities to promote transparency. Health information technology is not centralized in one body. The Union of Providers for Health Care Communication (De Vereniging van Zorgaanbieders voor Zorgcommunicatie) is responsible for the exchange of data via an information technology (IT) infrastructure.

What are the major strategies to ensure quality of care?

At the system level, quality is ensured through legislation governing professional performance, quality in health care institutions, patient rights, and health technologies. In 2014, the National Health Care Institute was established to further accelerate the process of quality improvement and evidence-based practice. The Dutch Health Care Inspectorate is responsible for monitoring quality and safety. Most quality assurance is carried out by providers, sometimes in close cooperation with patient and consumer organizations and insurers. There are ongoing experiments with disease management and integrated care programs for the chronically ill.

In the past few years, many parties have been working on quality registries. Most prominent among these are several cancer registries and surgical and orthopedic (implant) registries. Mechanisms to ensure the quality of care provided by individual professionals include reregistration of specialists contingent upon compulsory continuous medical education; regular on-site peer assessments by professional bodies; and professional clinical guidelines, indicators, and peer review. The main methods used to ensure quality in institutions include accreditation and certification; compulsory and voluntary performance assessment based on indicators; and national quality improvement programs. Furthermore, quality of care is supposed to be enhanced by selective contracting (e.g., volume standards for breast cancer treatment).

In 2014, a few population management pilot programs (initiatives that aim to rearrange health services and promote intersectoral collaboration at the regional level to improve population health and quality of care and to control health care costs) featuring quality targets were initiated but, as yet, specifics about the programs’ effects are unknown. Pay-for-performance constitutes a small portion of GP funding. Patient experiences are also systematically assessed and, since 2007, a national center has been working with approved measurement instruments in an approach comparable to that of the Consumer Assessment of Healthcare Providers and Systems in the United States. Although progress has been made, public reporting on quality of care and provider performance is still in its infancy in the Netherlands.

What is being done to reduce disparities?

Health disparities are considerable in the Netherlands, with up to seven years’ difference in life expectancy between the highest and lowest socioeconomic groups. Smoking is still a leading cause of death. The current government does not have a specific policy to overcome health disparities. In 2013, government decided to include diet advice and smoking cessation programs in the statutory benefits package. Every four years, variations in health accessibility are measured and published in the Dutch Health Care Performance Reports.

What is being done to promote delivery system integration and care coordination?

A bundled-payment approach to integrated chronic care is applied nationwide for diabetes, COPD, and cardiovascular risk management. Under this system, insurers pay a single fee to a principal contracting entity—the care group (see above)—to cover a full range of chronic disease services for a fixed period. The bundled-payment approach supersedes traditional health care purchasing for the condition and divides the market into two segments—one in which health insurers contract care from care groups, and another in which care groups contract services from individual providers, each with freely negotiable fees.4 To head off potential additional coordination problems and better reach vulnerable populations, the role of district nurses is currently being strengthened.

What is the status of electronic health records?

Authorities are working to establish a central health information technology network to enable providers to exchange information. All Dutch patients have a unique identification number (burgerservicenummer). Virtually all general practitioners have a degree of electronic information capacity—for example, they use an electronic health record and can order prescriptions and receive lab results electronically. At present, all hospitals have an electronic health record.

Electronic records for the most part are not nationally standardized or interoperable between domains of care. In 2011, hospitals, pharmacies, after-hours general practice cooperatives, and organizations representing general practitioners set up the Union of Providers for Health Care Communication (De Vereniging van Zorgaanbieders voor Zorgcommunicatie), responsible for the exchange of data via an IT infrastructure named AORTA; data are not stored centrally. Patients must approve their participation in this exchange and have the right to withdraw; access to their own files is granted by providers upon request.

How are costs contained?

The main approach to controlling costs relies on market forces while regulating competition and improving efficiency of care. In addition, provider payment reforms, including a shift from a budget-oriented reimbursement system to a performance- and outcome-driven approach, have been implemented.

Cost containment was one of the most significant subjects of public debate surrounding the 2012 elections. The most recent figures indicate that expenditure growth has fallen significantly, to 0.8 percent as of 2015.

The pharmaceutical sector is generally considered to have contributed significantly to the decrease in spending growth. Average prices for prescription drugs declined in 2014, although less than in previous years, with reimbursement caps for the lowest-price generic contributing to the decrease in average price. Reimbursement for expensive drugs has to be negotiated between hospital and insurer; there is some concern, however, that this and other factors may limit access to expensive drugs in the near future.

Health technology assessment is gaining in importance and is used mainly for decisions concerning the benefit package and the appropriate use of medical devices. The Dutch health minister has formulated an ambitious policy proposal aiming in part to limit the pharmaceutical industry’s power over drug pricing. During the Dutch European Union presidency, the topic was successfully put on the European Union agenda but the effectiveness of the proposed policies remains to be seen.

The annual deductible, which accounts for the majority of patient cost-sharing, more than doubled between 2008 and 2016, from EUR170 (USD206) to EUR385 (USD465). There are some worries that this increase has led to greater numbers of people abstaining from or postponing needed medical care.

In 2013, an agreement signed by the minister of health, all health care providers, and insurers set a voluntary ceiling for the annual growth of spending on hospital and mental care. When overall costs exceed that limit, the government has the ability to control spending via generic budget cuts. The agreement included an extra 1 percent spending growth allowance for primary care practices in 2014 and 1.5 percent in 2015–2017, provided they demonstrate that their services are a substitute for hospital care. These agreements will expire at the end of 2017, and it is unclear what future cost containment policies will replace them.

Cost containment is most severe in long-term care. People with lower care needs are no longer entitled to residential care. In addition, the devolution of services to the municipalities was accompanied by substantial cuts to the available budgets (on average almost 10%).

The Federation of University Medical Centers has recently started a program aimed at reducing lower-value services. In addition, the Dutch Federation of Medical Specialists launched the “Dutch Choosing Wisely” campaign, which is also aimed at reducing lower-value services.

What major innovations and reforms have been introduced?

After years of rapid spending growth, in January 2015 long-term care was fundamentally reformed. The reform program’s main goals were to guarantee fiscal sustainability and universal access in the future and to stimulate greater individual and social responsibility. The new structure seems to be up and running, but its effects are as yet unknown. In 2015–2016, some mitigating policies have been adopted, and future amendments are expected to alleviate fiscal stress in nursing homes.5

In curative health care, market reform and regulated competition remain somewhat controversial. The government, determined to continue stimulating competition between insurers and providers, undertook some measures to that effect, such as requiring insurers and providers to assume greater financial risk. In December 2014, however, the Dutch senate rejected a new policy proposal restricting free provider choice in specific insurance policies. Affordability and the accessibility of expensive drugs have rapidly become prominent issues.6

As of the date of this report, the Health Insurance Act has undergone two evaluations. The latest evaluation pointed to an imbalance of power, with providers having an advantage over insurers.


1Organisation for Economic Co-operation and Development (OECD), OECD.Stat., accessed Sept. 6, 2016. Please note that, throughout this profile, all figures in USD were converted from euros at a rate of about 0.827 euros per USD, the purchasing power parity conversion rate for GDP in 2015 reported by OECD (2016) for the Netherlands.

2W. Schäfer, M. Kroneman, W. Boerma et al., “The Netherlands: Health System Review,” in Health Systems in Transition (European Observatory on Health Systems and Policies, 2010).

3P. C. Smith, A. Anell, R. Busse et al., “Leadership and Governance in Seven Developed Health Systems,” Health Policy, June 2011 106(1):37–49.

4J. N. Struijs and C. A. Baan, “Integrating Care Through Bundled Payments—Lessons from the Netherlands,” New England Journal of Medicine, March 17, 2011 364(11):990–91.

5J. A. Maarse and P. P. Jeurissen, “The Policy and Politics of the 2015 Long-Term Care Reform in the Netherlands,” Health Policy, March 2016 120(3):241–45.

6H. Maarse, P. P. Jeurissen, D. Ruwaard, “Results of the Market-Oriented Reform in the Netherlands: A Review,” Health Economics, Policy and Law, April 2016 11(2):161–78.