Updates
Nov20

Update 20 November 2018

Welcome to the latest update on what is happening in the Dutch commercial healthcare market. In this update we cover:

  • Buurtzorg closes multi-year contract with one of the large Dutch healthcare insurance companies. Is Menzis changing the financing of Dutch healthcare?
  • MC Groep saga is finalized. What does this mean for the sector?
  • In our snapshot we give an overview of CCN, a company that was interested in taking over key activities at both MC Groep hospitals

Buurtzorg and Menzis have agreed to a multi-year contract

Buurtzorg is one of the success stories of innovative Dutch healthcare. The company was covered in the update of 23 June 2017. The company specializes in providing homecare with 10.000 nurses working in independent teams. Menzis is one of the largest Dutch healthcare insurance companies.

Light home care (cleaning, etc.) is paid by the municipalities, while medical home care falls under the obligatory Dutch health insurance scheme. All the activities covered by health insurance are typically contracted by the health insurance companies for a period of one year with each contracted provider having volume limits. If more care is provided by a given provider than its agreed volume limit (due to increasing market share, etc.) the healthcare insurance company can, and sometime does, refuse to pay for the extra services provided. Buurtzorg has a high-quality reputation and is popular. In the last few years it has had problems related to “overproduction” with a number of insurance companies.

The new agreement between Menzis and Buurtzorg is for three years and has an overall framework of between €150-200 million. The agreement is innovative in its length, and that Buurtzorg will not be penalized for overproduction. In addition to traditional homecare services, the new agreement also covers such issues as prevention, e-health, neighborhood networks and client self-sufficiency.

The Dutch healthcare insurance companies are traditionally seen as conservative and bureaucratic. However, for Menzis this is the second innovative move in healthcare financing after their decision to finance certain parts of mental healthcare based on results (see update 20 August 2018). Will this be the start of more changes to the financing of Dutch healthcare?

Definite solutions for the MC Groep hospitals

In my previous update I explained the situation relating to the bankruptcy of the two privately owned hospitals in the MC Groep. When that was written the official bankruptcy was very fresh and the receiver had just started their work. Currently, the situation is clear for both hospitals.

In Amsterdam several parties were interested in acquiring the real estate of the Slotervaart hospital and developing different forms of healthcare related services. In the end, none of the suggestions were accepted by the receiver (probably with key input from the main health insurance company and the city government of Amsterdam), and the hospital will be definitely closed. This is good news for the other hospitals serving Amsterdam as they will be able to share both the patients and the staff of the bankrupt hospital.

The Ijsselmeer Hospital in Lelystad will be acquired by the St. Jansdal hospital. This hospital is based in Harderwijk (approximately 40 km from Lelystad) so there will clearly be opportunities for providing more efficient services. One of the cost-reduction activities that has been agreed (against local protests) is that the new organization will not offer emergency care or emergency maternity care at night.

As discussed in the previous update, there is a clear need for hospital rationalization in the Dutch market, and this is one step in that direction. Which hospital will be next to either close or reduce its service offering?

Snapshot of a Dutch private healthcare operator: Cardiologiecentra Nederland

Cardiologiecentra Nederland (CCN) is a chain of clinics specializing in cardiac care. CCN made offers for the continuation of a broad range of healthcare related services in both the bankrupt hospitals in Amsterdam and in Lelystad but were not taken up on their suggestions.

CCN was started in 2006 by two cardiologists (Aernot Somsen and Igor Tulevski) in Amsterdam. The key idea of CCN is to offer patients with heart-related issues a rapid consultation, tests, and diagnostics. CCN cooperates with key hospitals that then carry out any required operations, install pacemakers, etc. CCN then follows up with any required post-operative care.

CCN currently has twelve locations spread out over the western part of the Netherlands. CCN has contracts with all the Dutch health insurance companies. CCN calls itself a public/private cooperative and operates through a mixture of non-profit foundations and for-profit operating companies. One of the issues it faced it its wish to acquire one or more of the MC Groep hospitals is that Loek Winter (one of the owners of the MC Groep) is a shareholder in key CCN operating companies.