Governments pour extra money into the NHS, but still it lurches from crisis to crisis. So as ministers finalise their plan for the NHS, Jeremy Laurance, Health Editor, asks if we should look abroad to find more radical solutions - Healthcare in the Netherlands

Bicycles of all sizes festoon the cycle rack outside the Venserpolder health centre. Inside, small children weave between the legs of waiting adults, ignoring the glass cabinet in the corner with its display of condoms, caps, spermicidal jelly and a large black dildo. We are in - where else? - Amsterdam.

Bicycles of all sizes festoon the cycle rack outside the Venserpolder health centre. Inside, small children weave between the legs of waiting adults, ignoring the glass cabinet in the corner with its display of condoms, caps, spermicidal jelly and a large black dildo. We are in - where else? - Amsterdam.

The health centre is on a poor housing estate south of the city. It serves a largely immigrant population, one-third from Surinam and one-third from the former Yugoslavia. "They don't live here because they like it, they live here because they don't have the money to go elsewhere," said Dr Jeroen Stroucken, one of the centre's four GPs.

In the country where the bicycle is king and children are taught about sex as soon as they can sit upright in the saddle, the Dutch have another secret to impart: how to organise a health service which combines a high proportion of private spending with the principles of equity and social justice that underlie publicly funded systems such as the National Health Service.

The remarkable feature of the Dutch system is that almost 40 per cent of the population has private health insurance - under the Health Insurance Act people are excluded from the statutory sickness fund scheme once their salary rises over 61,000 guilders a year (£18,000) - yet there is no evidence of two-tier healthcare. There is no equivalent of Harley Street, and private clinics are in effect banned (although, as elsewhere, the wealthy can always get the best treatment). The cost of long-term care for the elderly and mentally ill is covered under a separate insurance scheme controlled by the Exceptional Medical Expenses Act.

This means, in theory at least, that the 8,000 patients of the Venserpolder health centre get the same standard of care as those of any of the country's 7,500 "house doctors" who, like their British GP counterparts, act as gatekeepers to the hospital system for the Netherlands' 16 million people.

Dr Stroucken insists that no distinction is made between privately insured patients and the rest. House doctors are paid a capitation fee of 130 guilders a year to cover all care for each sickness fund patient on their list (with supplements for the elderly and those in deprived areas, a similar system to the UK) but for the privately insured they are paid on a fee for service basis. Does this not provide them with an incentive to do more for the privately insured? "No," he says. "Everyone has the same treatment and everyone gets the same medication."

Pressure on GPs is growing, however, from better informed patients seeking access to specialists. Patients are demanding more choice. Egbert Schadé, professor of general practice at the Academic Medical Centre, a 1,000-bed hospital outside Amsterdam, said: "Patients are asking to be referred. It is the same all over the world. With newly powerful patient movements, they are asking, Why should I go to the GP when I could go straight to a medical specialist?"

Some private insurance packages cover only hospital care, excluding GP services, increasing the incentive for direct access to specialists. The fee for a private GP consultation is 37 guilders and a home visit is charged at 74 guilders. These charges are doubled at night and weekends.

None of the hospitals is run to make a profit. Most are owned by private foundations, with the exception of the six university hospitals, but are controlled by the government. Hospital specialists may be salaried or paid on a fee-for-service basis, with maximum fees set by the government's tariff authority. An average GP earns 150,000 to 170,000 guilders a year (£44,000 to £50,000), a hospital specialist 250,000 to 300,000.

The Netherlands is an egalitarian society with a narrower gap between rich and poor than in many countries, which helps to explain the wide acceptance of its heavily regulated health system. Professor Schadé said: "The Dutch mentality is a consensus mentality. We are merchants and traders. We don't have so many poor, nor so many rich as in the UK. We are more community-oriented."

The danger with a tightly regulated system is inefficiency, and efforts have been made to loosen controls and encourage competition. A split premium has been introduced for the sickness funds, the larger part of which is income-related but with a flat rate addition for which the funds can offer different services and compete for patients. A change in the law shifting responsibility for making sickness payments from the social security system to employers has given them a new interest in quick, good-quality health care for their workers.

This has increased pressure to reduce waiting lists - a new phenomenon in the Netherlands, although they would inspire envy in the UK. They vary from a few weeks to three months, depending on the hospital and speciality, with the worst stretching to six months. New targets have been set of a maximum three-week wait for a first outpatient appointment in university hospitals, with other targets for specific conditions such as hernia surgery.

The Netherlands has fewer hospital beds than the average and low consumption of drugs, at 4.5bn guilders out of a total health budget of 65bn guilders. Paul van Dyk, a former GP and medical adviser to ZRO, the largest Amsterdam sickness fund, said: "GPs have a very restrictive policy on prescribing drugs. We were taught that if you can do it without drugs you should do it without drugs. That is a big difference from Germany and France."

Although the government has no direct control over the health budget, it publishes indicative figures for growth, set last year at 2.4 per cent, with specific amounts allocated to cut waiting lists and pay for expensive new drugs. Despite the strong performance of the economy, concern about rising costs has led the health minister, Borst Eilers, who is a doctor, to propose new restrictions on the cover provided by basic health insurance. Adult dental treatment, cosmetic surgery and alternative medicine are already excluded and physiotherapy is limited to nine treatments (except for chronic conditions such as arthritis).

This has provoked a heated debate in the Netherlands. Dr van Dyk said: "When dental care was insured by the sickness funds it cost 400m guilders a year. Since it was cut and cover provided by private insurers, that figure has risen to 800 million guilders. You can say the collective burden has gone down but the costs have gone up."

The Dutch system is equitable and universal, and provides a good standard of care. It has a high level of private investment but is not distorted by the pressures of the market. It provides an intriguing model for other countries seeking a larger injection of private cash.

Verdict: Less choice than in some other countries, but the efficiency and equity make system of particular interest to UK.