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Health-Adjusted Premium Subsidies In The Netherlands
Wynand P.M.M. van de Ven,
René C.J.A. van Vliet and
Leida M. Lamers
The Dutch government has decided to proceed with managed competition in health care. In this paper we report on progress made with health-based risk adjustment, a key issue in managed competition. In 2004 both Diagnostic Cost Groups (DCGs) computed from hospital diagnoses only and Pharmacy-based Cost Groups (PCGs) computed from out-patient prescription drugs are used to set the premium subsidies for competing risk-bearing sickness funds. These health-based risk adjusters appear to be effective and complementary. Risk selection is not a major problem in the Netherlands. Despite the progress made, we are still faced with a full research agenda for risk adjustment in the coming years.
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