Health insurer giant Achmea is being taken to court by 20 Amsterdam pharmacists in a dispute about how much the insurer is paying for medicine.

The pharmacists are accusing the company of being in breach of contract regarding previous agreements on the amount of compensation being paid to pharmacies.

Achmea pays pharmacies what it considers a reasonable price for the cost of medicine, regardless of the price the pharmacies themselves paid.

Health insurance oligarchy

While it is up to the court to decide the specifics of these contracts, the pharmacists also want to focus the attention of Parliament on whether it is desirable that a handful of large insurers unilaterally determine the rates in healthcare.

The Health Minister Edith Schippers has already said yes to that question. Speaking on Radio One last week, she said the Dutch health insurance companies had been given the task of reducing costs in health care, and that meant they might have to occasionally "hang the bogeyman."

On the other side are the trade associations for almost all Dutch healthcare providers, from hospitals to single providers such as physio-, speech- and psychotherapists. They all have the same complaint as the pharmacists: that the market power of these few large health insurers would be so great that providers would have no choice but to accept the insurers' "unfair contracts."

Livelihoods in jeopardy

Amsterdam pharmacists Henny Atta said that if he didn’t close a contract with Achmea, which has a 75 per cent market share in Amsterdam, he would lose his business. Staying with them, however, may also have the same effect.

"If Achmea continues to pay below cost, I will go bankrupt," he said in an interview with De Volkskrant.

Atta pays himself only 30.000 euros in salary per year and his pharmacy is in danger of failing. In theory, he could try to get lower drug prices from his pharmaceutical suppliers, but in reality, it is unlikely an individual pharmacist could negotiate independently for lower prices.

The large insurers have also managed to freeze the rates for therapists for the next year and in some cases lower them substantially.

The rates now for giants like Achmea and VGZ for speech pathologists, for example, are up to 23 per cent less than for smaller insurers.

That means that the four major insurers, Achmea, VGZ, CZ and Menzis (which together account for 14,7 million policy holders) offer speech therapist rates of around 29 euros, compared to 38 euros from smaller insurers.

While this is good news for Dutch health insurance consumers, it is dire for therapists. Based on the higher rates, therapists working full time and after deducting expenses can earn a gross salary of 51.000 euros a year. With the rates offered by the big four, their gross salary drops to 38.000 euros.

Insurance companies' response

"It is evident that we try to be as sharp as possible in caring for the costs of our 4,2 million customers," explained a spokesman for VGZ on the rates for speech therapy.

"It is up to the provider himself if they want to will conclude a contract with us on the basis of that rate."

Achmea has not commented on the court case with pharmacists, merely saying they will make their arguments in court.

A spokeswoman for the insurance group said, "It is partly because we focus our attention on the costs of medication that enables us to lower our premiums next year."

The other point is that any reduction in the rates they pay should lead to lower premiums for consumers.