Liberalisation of health services by the back door: EU cross-border health care directive

8 March 2009

Liberalisation of health services by the back door: EU cross-border health care directive

Thanks to a successful intervention by the SP, in 2004 health care was excluded from the EU Services Directive (aka the Bolkestein Directive, after the ultra-neoliberal Dutch politician who, as a European Commissioner, fathered the measure). Now, however, the European Commission has brought forward a proposal for a new directive on patients' rights in relation to cross-border health care. In our eyes this looks suspiciously like an attempt to reintroduce the Bolkestein Directive by the back door. We must not allow this neoliberal measure to sneak on to our statute books under the guise of aiding patient mobility.

by Kartika Liotard and Jessica van Ruitenburg
Boxes by Ineke Palm

The Services Directive obliges EU member states to open their service sectors, such as transport and energy, to competition from other member states. This directive, from now ex-Commissioner Frits Bolkestein, established that the whole of the European service sector was to be liberalised, health care, environmental services and education included. Service providers would simply have to comply with the conditions determined by the law of the country in which they were registered.

Even the Netherlands' right-wing Premier, Jan-Peter Balkenende, expressed the view, after the massive no in the referendum on the EU Constitution in June, 2005, that health care was a national competence and did not belong in the Services Directive. And thanks to the SP's efforts, health care had indeed, in 2004, been exempted from the directive's provisions. Since then, however, the European Commission has been engaged in furious attempts to reverse this decision.

Second attempt fails

The European Court of Justice (ECJ) has ruled that member states must offer space for cross-border health care and on this pretext the European Commission has, since 2006, been busy developing a health care directive. At the end of 2007 it produced a proposal which envisaged more market involvement in health care and more 'freedom of choice' for patients when it comes to selecting a health care provider, whether this be from their own country or another member state. The aim was to enable patients to choose where they had treatment, but also that health care providers from one member state would be able to offer care in another. Foreign providers could, for example, establish themselves in the Netherlands. The member states did not, however, agree to this proposal, because they felt that health care would be brought to too great an extent under the accursed Services Directive.

Third attempt: sneak it in via patients' rights

Now the European Commission has proposed a new directive on patients' rights in cross-border health care. The proposal codifies the rulings of the ECJ, which have determined that it is the right of all patients within the European Union to have access to health care in any member state, their own or another. The patient also has a right to compensation for costs incurred, regardless of how a particular member state organises its health care provision.

At the same time the Commission proposal foresees the regulation of health care at European level in both the public and private sectors, despite the fact that health care services are specifically exempt from the scope of the Services Directive. The proposal relates to the free movement of persons (patients and workers in the health care sector) and the freedom of establishment and service provision in the health care sector. In our view, this looks suspiciously like putting health care back into Bolkestein's Services Directive, by the back door.

The question is whether a directive of this kind is really necessary and whether it is truly proportional. ECJ rulings demand an adaptation of the existing rules. The Netherlands' own law on health care already conforms to European judgements. Would it therefore not be easier to address those countries whose laws do not fully conform to EU requirements? A further question is whether this directive will solve the problems affecting compensation payments for cross-border health care. It should also be noted that, of total health care delivery within the European Union, scarcely one per cent involves patients being treated outside their own country.

Protest against the Services Directive
Brussels, 2005: Jessica van Ruitenberg, one of the authors of this article, demonstrates in plain language against the 'dienstenrichtlijn' – the Services Directive.

Equal treatment for everyone, rich and poor

The Commission proposal concerns primarily patients who have initially to pay the costs of their treatment out of their own pockets. Their costs will then be reimbursed by their own health insurance in their own member state, provided their insurance covers the specific treatment received. Travel expenses, accommodation costs and possible legal expenses will not be reimbursable. In our view, this means that people who have more disposable income, a higher level of education, a command of foreign languages and ready access to professional advice will be at an enormous advantage. Such people can see more easily what is available outside their own countries and thus choose the best care around. Social status would thus become a more significant factor in determining patient mobility. This system of reimbursement amounts to nothing less than discrimination against poor people and poor member states, something which should certainly not be written into law.
British doctors are also concerned about these European plans for health care, which require the patient to pay in advance. This is not possible for everyone. The British Medical Association (BMA) fears that that this will exacerbate divisions because richer people will be able to avoid National Health Service (NHS) waiting lists by going abroad.

Health care is not a market

The new directive on cross-border health care is based, as all EU measures must be, on an article of the EU Treaty, in this case Article 95 of the European Community Treaty. This article governs the harmonisation of the internal market, and its use in this instance means that health care will be expected to conform to internal market rules.

The SP would rather the legal basis of the measure had been Article 152, which states that health care is a national competence and that a goal of the European Union is to improve health care for EU residents as a whole.

The proposed legal basis of Article 95 demonstrates all too well the Commission's intentions. Protection, preservation and promotion of health is a public task. Offering effective, affordable and high-quality health care is the responsibility of the state and of its social security systems. Health care must not be commercialised and exposed to the influence of free market mechanisms. Commercialisation means, after all, that the economic interests of corporations and their shareholders will come into play. Economic interests must never be allowed to come before those of the patient.

In the opinion of the SP, health care should not come under internal market rules. Health care should be treated as a public provision and not as an economic service as is the case now. In the coming European elections the SP will be making this point strongly.


Health care is determined far more by culture than you might think and this proposed directive impinges on the way in which individual countries seek to run their health care systems. In the proposal there is, for example, provision for patients to have the right to choose their own doctor or hospital. For people in the Netherlands this is already taken for granted, but this is not the case in other countries. In Britain, for instance, your doctor and hospital are determined by your place of residence. Such matters are nothing to do with the EU. In Germany, to take another example, homeopathy and visits to health spas are reimbursable under the state system.

Another danger is that the influence of the directive on patient mobility is impossible to foresee. If waiting lists exist in your own country, it's easier to go to another country where treatment is more rapidly available. But everything possible must be done to ensure that treatment abroad is not necessary. The existence of a directive on patient mobility must not lead to a situation in which countries no longer feel the need to tackle their own waiting list problems because treatment is readily available in another member state.

When can a country intervene if too many patients come from abroad and health care for its own residents comes under pressure? This can already be seen happening to a certain extent in Antwerp. Belgium has had, for a number of years, a system to facilitate organ donation which requires anyone who does not wish to have their organs so used after their death to register this fact with the authorities. Anyone who does not do so is automatically considered a willing donor. The result is that Belgium suffers from less of a shortage of organs than does the Netherlands. An increasing number of Dutch people now travel to Antwerp to receive a Belgian kidney. What would happen if this were to reach a point where too many Dutch residents were going to Antwerp for their operation, at the expense of Belgians waiting for a kidney to become available? How could Belgium in such a case temporarily withdraw from the stipulations of the directive? As a result of the free movement of services, health insurers can sign contracts with health care providers in other member states. If this were to happen on a large scale this could in time lead to an erosion of the quality and quantity of health care in the Netherlands. In addition, the money spent on insurance premiums would disappear into the pockets of health care providers abroad.

The SP and cross-border health care

The SP is not opposed to patient mobility. Every citizen of an EU member state has the right to receive healthcare in another member state and must be treated in just the same way as a citizen of the country in which he or she is receiving treatment. But these principles were included in a directive on the coordination of social security systems as long ago as 1971. Is a new directive then really necessary?

We believe in the localised approach to health care services: the delivery of integrated health care accessible on the local or regional level, health care of high quality which is available to all. Patients will surely receive better support within their own locality and their own social surroundings.

Patient mobility must not become an excuse for inadequate spending on national health care systems, for a shortage of care of good quality, for treatments which are too expensive or for waiting lists which are too long. A situation must not be allowed to develop in which, because patients can have the necessary knee operation in Germany, the Netherlands itself no longer feels any pressure to do anything about its waiting list. Every member state is responsible for the delivery of effective, affordable, high quality health care to all of its citizens as well as citizens of other member states resident on its territory. A directive which removes this responsibility is simply, for us, unacceptable.

Reversing the trend to the market

The most important measures needed to resist and reverse the advance of the market in this sector would tend in the following directions:

  1. From private commercial health insurers, back to public regional health care insurers.
  2. From fixed premiums to premiums related to ability to pay, as in the law on health insurance.
  3. Stop negotiating over prices, for example via DBCs (Diagnosis-Treatment Combinations in hospital care)
  4. Fixed basic tariffs in every health care sector.
  5. All new entrants to the health care market must fulfil the same conditions of quality and continuity of care, and have a permit to offer such care.
  6. No distribution of dividends to shareholders in health care corporations.
  7. Put a stop to tendering in health care.
  8. Contracts with all health cared providers must be on a basis of quality.

Reversing the intrusion of the market could lead to protests from the private sector and from health insurers, as well as possible demands for compensation for damages. All of this could bring extra costs. We must not shy away from this. We must be prepared to redeem our past mistakes and to do so as quickly as possible, because otherwise the bill will only rise. We must recapture health care from the market. Health care should be a social provision and not an economic service as is now the case.

How to tender under the Law on Social Support

The SP has from the start been opposed to the tendering system for public procurement. According to the government, the EU directive on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, Directive 2004/18, applies equally to services provided in the framework of the 'Wmo', a system designed to enable people encountering difficulties through disability or infirmity to live independently whenever possible and to participate to the greatest possible extent in their society. The provisions of the directive, including obligatory tendering, would thus apply, for example, to home help services.

Tendering leads to a situation in which competition centres primarily around price, with tariffs fixed at a rate lower than the actual cost-price sometimes being agreed. The results of this cut-throat competition are that cuts must be made in staffing costs, so that work pressures mount accordingly, working conditions deteriorate, wages decline and demotions and sackings occur. In addition to getting rid of indirectly-employed personnel, jobs belonging to home care workers are placed in jeopardy because the bodies employing them fail to win tenders. Thousands more are replaced by less qualified workers. A new development is that there are health care providers who no longer register because home-based care is no longer profitable. Many home care organisations are using private companies to provide home-based care and are establishing joint ventures with cleaning firms.

Regulation of subsidies

In the view of the SP, home-based care is as important to people's well-being as any services of general interest, so that in both cases public subsidies should be available. To this end, a legislative proposal has been prepared. A second idea could be what is known as 'internal expenditure', whereby a local authority may choose to provide a service directly.


If, despite these considerations, services are put out to tender, then this should preferably be via the limited regime of what is known as '2b-Services', services which make no contribution to the unification of the European market because they must be performed by national service providers, rather than being handled under the full-blown single market regime applied to '2a-Services'. In the view of the minister, in the case of both 2a- and 2b-Services consideration must be given to the question of which part represents the highest estimated value. If, in the case of a mixed service (for example one which offers both cleaning services and those providing social support) it can be demonstrated that the share of income provided by the social support (a 2b-Service, defined in the directive as "Category 25: health care and social support") represents the greatest share of value, a local authority is allowed to opt for the less stringent 2b regime. This means that the simplified procedure can be followed, a process which involves fewer market-orientated obligations and a tendering system less open in character.

During the debate on the 'Wmo' in the Senate, the government stated that both 2a and 2b would be possible, but that "because we also have to take into account quality demands, it is not a self-evident decision, even after the debate in the other house of Parliament, that home help care consists of nothing but cleaning services."

Demanding quality criteria

Contracts based on prices below cost must be prevented. Agreements concerning the keeping or transfer of staff and demands related to training should also be in any contract. Health care workers must, on a voluntary basis, be allowed to opt for a proper employment contract and not be palmed off with what is known as an "alfacontract", under which no minimum working hours are specified or guaranteed. To encourage this, the government has produced a document on 'social considerations in tenders', which it has made available to local authorities. For 2b procedures it is relatively straightforward to include stipulations concerning work relations. When it comes to 2a, it is much more difficult.

Fixed price
In what is known in the Netherlands as the 'Zeeuwse model', a fixed price is stipulated. Any body which can provide a service which meets certain quality standards can be awarded a contract. In such a case, quality rather than price determines who is selected. When this price is determined, real cost prices must be the reference point.

Medical tourism

Not everyone is critical of European plans to make cross-border health care more possible. Private companies see profit in it. In this context, recent times have seen the launching of a number of plans for medical holidays. A planned hip operation could, perhaps, be combined with a holiday in the Spanish sun.

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