The Dutch are taking a novel approach to health care, and it has nothing to do with providing herbal remedies in Amsterdam's coffee shops.

Starting in 2006, the Netherlands has required all adults to buy their own health insurance, or pay a penalty. And insurers must offer policy to all comers, no matter how sick or old they are, WSJ's Gautam Naik reports.

The government subsidizes policies for adults who can't afford to pay premiums and makes "risk-equalization" payments to insurers that cover the elderly and those with some chronic conditions such as diabetes.

The current Dutch program differs from plans in other parts of Europe, which mostly offer national health care, and the U.S., which largely relies on employers paying for the bulk of coverage.

The idea behind the Dutch is that individuals will enroll in health plans that provide the coverage they need instead of a one-size-fits-all plan chosen by an employer. And individuals will pay more attention to health costs, which are largely ignored when the government picks up the tab. The Dutch want the "risk-equalization" incentive payments to motivate insurers to cover more than just healthy customers.