Atos Consulting launches survey on transformation of Dutch health insurance market

Atos Consulting, the consulting arm of Atos Origin, has analysed the dynamics in the Dutch health insurance market via a study conducted among health insurers by its Trends Institute. The conclusion is that the sector as a whole is demonstrating all the signs of a sector-in-transformation, and that health insurers must concentrate on the innovation of their offer of products and services in order to guarantee profitability.



Although last year no fewer than one-quarter of insured persons switched over to a different health insurer, this year that figure was only 4%. For most health insurers this means little growth or loss in the number of insured persons, with the exception of two winners and two losers whose customer base changed by more than 5%. The biggest winner in absolute numbers gained a net of 60,000 insured persons, and the biggest loser lost a net of around 110,000 insured. In relative terms, the biggest winner in 2007 grew by 17 percent and the biggest loser lost 12 percent of its insured database.



In contrast to the individual pricing and the valuation, the advertising expenditures this year did have an impact on the growth in the number of insured persons. Total expenditures of the health insurers on advertising amount to € 46 million this year which is half of what was spent the previous year. This was due in particular to the fact the commercial season for the insurance year 2005/2006 was significantly longer than 2006/2007. Relatively little money is being spent yet for advertising on the internet, despite the fact that a large share - over one-quarter - of the new insured persons registered via the internet. The effectiveness of the advertising campaigns is greater than last year, because more emphasis is being placed on group contracts.



High group contract discounts averaging 7% are being offered this year. The group contract pricing was decisive for the growth in the number of group contract insured. The degree of group contracts increased further in 2007, from almost 50% to around 55%. The extent of the growth in the number of group contracts was the primary cause for the total gain in the number of insured. The share of ad hoc groups vis-à-vis employer´s group contracts increased slightly for most health insurers. As a result of an annual premium that does not cover costs, it is expected that 11 of the 13 health insurers will post losses in 2007 on the basic insurance, for a joint loss amounting to € 600 million. The discounts offered will all have to be recovered in the short term in some other way. In order to become profitable again, health insurers will have to radically innovate their offer of products and services.



Predictions Atos Consulting
Senior advisor Paul van den Broek at Atos Consulting expects that the care purchasing function of health insurers will offer the most room for this. While, prior to the system change, health insurers regarded care purchasing above all as an administrative function, their current thinking proceeds much more from the principle of economy-of-scale. Through increasing scale they are trying to generate sufficient volume in order to be able to procure care more efficiently. The initiatives which presently exist in the area of prevention and self-help are still (very) small-scale and insubstantial. The same also applies for the cooperation with health care providers, which often goes no further than choosing from a number of preferred providers and the making of additional agreements, for example with regard to waiting periods and extra service.



Paul also expects that a transition will take place in the relationship between health insurers and health care providers. The relationship will shift from (preferred) provider to delivery and development partner with Health Maintenance Organization (HMO)-like structures. By entering into such relationships with health care providers, the cost savings possibilities will also increase for the health insurers. As a result, an actual transformation of the entire sector is to be expected.



About Atos Origin
Atos Origin is an international information technology services company. Its business is turning client vision into results through the application of consulting, systems integration and managed operations. The company’s annual revenues are EUR 5.4 billion and it employs over 50,000 people in 40 countries. Atos Origin is the Worldwide Information Technology Partner for the Olympic Games and has a client base of international blue-chip companies across all sectors. Atos Origin is quoted on the Paris Eurolist Market and trades as Atos Origin, Atos Euronext Market Solutions, Atos Worldline and Atos Consulting.



About Atos Consulting
Atos Consulting, the global consulting practice of Atos Origin, is a leading provider of business, process and technology consulting services. With more than 2,500 staff globally, it focuses on delivering proven, pragmatic solutions to the telecom, manufacturing, financial services and public sectors.