Leiden Law Blog

Caught in the middle. Public and private aspects of legal relationships in healthcare and education

Posted on by Ali Mohammad and Hetty ten Oever and Stijn Voskamp in Private Law, Public Law
Caught in the middle. Public and private aspects of legal relationships in healthcare and education

The healthcare and education sectors are heavily regulated by public law. The reason for such regulation is the protection of public interests, such as the affordability and availability of healthcare and educational services. The relationships in these sectors are also governed by contract law. This raises the question: what role does private law, and more specifically contract law, have to play? And to what extent does public law influence the conclusion, content or execution of contracts in the healthcare and education sector? In the upcoming ILS-conference we will look into contracts between (1) health insurer and care provider, (2) school and pupil and (3) higher education institute and public authorities. The role of contract law differs in each of these relationships.

(1) Health insurer and care provider:  instrumental application of contract law

In the Netherlands, curative healthcare is provided by individually or jointly established healthcare professionals and institutions constituted under private law, such as hospitals, GPs and physiotherapists. Private health insurance companies provide cover for the patients’ need for medical treatment by way of payment in kind or reimbursement of costs. Health insurers and care providers are supposed to conclude ‘healthcare purchase agreements’. These reciprocal agreements oblige the care provider to provide medical treatment to patients insured with the health insurer and oblige the health insurer to pay the agreed tariffs for the provided care. Health insurer and care provider should be free to negotiate the price, volume and quality, whenever the outcome in a specific healthcare purchase market serves the public interest as a whole. However where the market fails and/or solidarity and accessibility for citizens is at stake, regulation – such as the Healthcare Market Regulation Act (Wet marktordening gezondheidszorg) – should limit the parties’ freedom of contract.

What does this instrumental approach to contract law in the healthcare sector mean for the mutual rights and obligations of care providers and health insurers? A tension between the protection of public interests and individual interests of parties concerned is evident in several aspects of the contract. How much freedom of contract do the parties actually have? For instance, to what extend do the Health Insurance Act and Healthcare Market Regulation Act influence their contractual rights and obligations? Do and should individual healthcare professionals have any contractual remedies against health insurers who offer them adverse take-it-or-leave-it contracts? Do healthcare purchase agreements contain third-party clauses in favour of insured patients and if so, are they of any use to insured patients?

(2) Pupil and school: a contract? 

What is the specific nature of the relationship between a pupil and a school in primary and secondary education? For decades the qualification of this legal relationship has been subject of discussion.         It is argued that at least the relationship between a pupil and a denominational school is considered a private law contract, although these schools are usually publicly funded. Moreover these schools are subject to sector-specific public law, for example the Secondary Education Act (Wet op het voortgezet onderwijs). The question that arises is ‘to what extent do these provisions concern the relationship between a school and a pupil’? Furthermore it is questionable whether all contractual remedies, for example suspension and termination, could be invoked. How does sector-specific public law relate to the private law relationship?                                                                                    The relationship between a pupil and a public school is, on the contrary, generally considered to be publicly orientated, bringing public law and legal protection by the administrative courts into play. Disputes about schools violating their duty of care nevertheless end up at the civil courts, bringing up the question of how to qualify the relationship between pupil and school yet again.

(3) Government and education institute: legal protection by public or private law

Similar concerns exist in the vertical relationship between higher education institutes (HEIs) and the government. In general this relationship is primarily governed by administrative law, as these actors are not equals and the continued existence of HEIs is mostly dependent on state funding. State funding is granted by government decisions and HEIs enjoy procedural safeguards laid down in the General Administrative Law Act (Algemene wet bestuursrecht). Remarkably, education for adults, which is not considered to be higher education, was funded differently, at least until 1st January  2015. The payment of public funding was not based on decisions, but on contracts between municipalities and Regional Training Centres (ROC’s). This raises the questions: Why was there such a difference in the legal relationship between public authorities and education institutes, and what difference does funding by decisions or contracts make to the legal protection of these institutes?

Questions of this nature serve as an introduction to the upcoming workshop. Please feel welcome to join our workshop at the Leiden Law School conference on Interaction between Legal Systems ‘Room for Reflection’, Wednesday 21st  January 2015, 14.00-17.30h (sign up).

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