The intention of the bill is to make it possible for providers of medical specialist care to distribute profits, under circumstances. General and specialist hospitals and independent treatment centers are covered by this type of care. By allowing hospitals to distribute profits, the government hopes to give hospitals better access to new sources of funding in the form of risk capital. According to the Minister, this will be beneficial to the quality, provision of services and efficiency of medical specialist care.

The Cabinet sets three conditions on the right to distribute profits, because it acknowledges that the unrestricted permission of profit distribution may lead to additional risks for quality, affordability and accessibility of healthcare. These conditions were already included in the Coalition and Parliamentary Support Agreement and are further elaborated in the bill. The first condition is that profits may only be distributed three years after the time when the investment was made. This is meant to prevent that the short-term interests of investors will play a too big role in policy decisions. Secondly, a positive evaluation by the Healthcare Inspectorate is required before profits can be distributed. In this evaluation the hospital is evaluated according to minimum standards of quality set in advance. Finally, profits may only be distributed after the financial reserves have received a positive appraisal.

If a hospital does distribute profits in violation of these conditions, the bill provides for sanctions. In the government's opinion the healthcare provider should first claim back the profits itself. If it does not, the Dutch Healthcare Authority has the power to enforce that healthcare providers claim back any profits that were distributed without permission. Apart from recovering the profits distributed in violation with the rules, the bill also contains options to impose fines for the unlawful distribution of profits.

At present, hospitals are covered by the ban on pursuing a profit motive as set out in the Care Institutions Accreditation Act. This Act is to be replaced by the Clients' Rights in Care Act. Certain categories of healthcare providers, such as GPs, obstetricians and dentists, were already allowed to distribute profits. After this bill will have been adopted, hospitals will also be included in the statutory exception to this ban. The ban on distributing profits will continue to apply to university hospitals.

First published in the Kennedy Van der Laan newsletter - February 2012

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.