Do not blame rising healthcare costs on an ageing population
An ageing population is not the key cause of rising healthcare expenditure in the Netherlands. Between 2000 and 2010, the collective expenditure on healthcare (excluding social welfare) rose from 26.5 billion to 68 billion according to Statistics Netherlands (CBS). After adjusting for inflation, this represents more than a doubling of expenditure.
During this 10-year period, the increase in the population was 5%, while the ageing population (increase in the percentage of 65+ citizens) only rose by 2%. It is therefore impossible to explain the huge rise in healthcare expenditure between 2000 and 2010 based on the ageing population. In our opinion, the key explanation is that budget financing was dropped in favour of the ‘cash on the barrel' policy introduced by former Minister Borst in 2000. This policy meant that hospitals that performed more operations were also given more money.
Prior to 2000, hospitals were not paid if they performed more services than the budget allowed for. In those days, medical specialists who deferred elective surgery from about mid-November to the new budget year were not an exception. There was a brake on the supply of healthcare.
The ‘cash on the barrel' policy introduced after 2000 turned out to be a prelude to further output financing, privatisation and a strong expansion in the supply of healthcare.