Tweet
The New York Times has produced, often on its Prescriptions or Economix blogs, several useful summaries of health care systems in other countries. However, today’s front page contains an editorial in the guise of news entitled, Swiss Health Care Thrives Without Public Option, which illustrates a point I’ve been making.
The Swiss system, reporter Nelson Schwartz informs us, provides quality, universal coverage, but thankfully avoids being "bureaucratic, socialized medicine." What a relief. The Times then invites us to view the Swiss system as a model for the US:
Swiss private insurers are required to offer coverage to all citizens, regardless of age or medical history. And those people, in turn, are obligated to buy health insurance.
That is why many academics who have studied the Swiss health care system have pointed to this Alpine nation of about 7.5 million as a model that delivers much of what Washington is aiming to accomplish — without the contentious option of a government-run health insurance plan.
The slam on a public option is both gratuitous and irrelevant, given the Swiss system. As I discussed in this post, When Is a Regulatory Scheme Equivalent to A Government-Run System?, a pervasive regulatory scheme that controls the key elements of an insurance system can become equivalent to an explicit government insurance system.
More important, you have to have at least one or the other (and possibly both?) to succeed. Our Senate isn’t proposing either approach for insurers in exchange markets, but both conditions exist in Medicare. That’s why virtually all Congressional proposals for controlling costs are focused on Medicare (and using Medicare’s leverage to affect provider costs); without a Public Option to push cost reforms, there’s no mechanism to achieve cost reductions in the Exchange, and only a high-end insurance tax to indirectly affect costs in the employer-based market.
And sure enough, the Times article eventually hints at which of these two approaches the Swiss use:
The Swiss government does not “ration care” — that populist bogeyman in the American debate — but it does keep down overall spending by regulating drug prices and fees for lab tests and medical devices. It also requires patients to share some costs — at a higher level than in the United States — so they have an incentive to avoid unnecessary treatments. And some doctors grumble that cost controls are making it harder these days for a physician to make a franc.
There are other important details, but it turns out the Swiss achieve quality and lower costs not through competition between the many non-profit insurers in each Canton, but because there’s a pervasive national system of government regulation with price and quality controls, along with a government-defined framework of basic insurance plans.
The Times’ cites Harvard’s Regina Herzlinger, an expert who attributes the Swiss success to its customer-driven, competitive attributes. These are just the things to appeal to certain Senate Finance Committee members.
“What I like about it is that it’s got universal coverage, it’s customer driven, and there are no intermediaries shopping on people’s behalf,” she added. “And there’s no waiting lists or rationing.”
It would have been helpful if the Times had also checked with Princeton’s Uwe Reinhardt, who has also written on the Swiss system and, moreover, reviewed Herzlinger’s study.* Reinhardt writes a weekly post for the Times Economix blog on, among other things, international health care systems. According to Reinhardt,
On the surface, the Swiss health system may give the impression of a price-competitive, consumer-directed health care model. However, the heavy government regulation that pervades the entire system — including the health insurance sector — makes it a far cry from the vigorous, price-competitive health care market envisaged by the advocates of consumer-directed health plans in the United States. Some gestures to competition aside, the Swiss system so far has remained mainly a de facto cartel of insurers and health care practitioners who transact with one another in a tight web of government regulations. . . .
But who brings about the lower prices of health care in the Swiss health system? Herzlinger and Parsa-Parsi[fn] argue that these prices reflect the consumers’ idea of “value for the money.” However, the insured in Switzerland have only indirect and probably weak influence over the prices paid to clinicians, as these prices are negotiated by the cartel-like associations of insurers and clinicians under the watchful eye and heavy hand of government. Since all insurers are bound to the same prices for ambulatory care and prices are negotiated between insurers and individual hospitals for inpatient care, it is not clear how effectively consumer choice among insurers can influence the prices paid to clinicians. It can just as plausibly be argued that these prices reflect government’s idea of value for the money. . . .
Finally, what is most impressive about the Swiss health system is the role tight government regulation plays throughout the entire system. One can plausibly argue that this regulation is chiefly responsible for both the high quality and (relative to the United States) low cost of Swiss health care. Absent that regulation, the Swiss health system probably would metamorphose into something resembling the much less regulated, high-cost US system, which is both more inefficient and more inequitable than the Swiss system, as Herzlinger and Parsa-Parsi take pains to point out.
So the Times headline is not only gratuitous, it misses the point. Once again, we find that where there is no explicit government insurance system as France has, success depends on a pervasive national regulatory scheme, including close rate regulation of drugs, devices, provider services and insurance, which is far beyond anything proposed by Congress.
Our Senate sees only what it wants to see — "It’s not socialism! There’s no PO!" — but they ignore the features that substitute and produce the favored results. The Times editors should be helping them see the whole picture.
*Uwe E. Reinhart, The Swiss Health System, JAMA (2004) See pdf link here.
More:
See wesgpc, comment #1 below for links to WHO descriptions of Swiss system:
http://www.euro.who.int/document/e68670.pdf
http://www.euro.who.int/observatory
More Swiss links from commenter RainaP here.
61 Comments
Uh ho, the Swiss menace raises it ugly head again, threatening our free enterprize system, personal freedom and guns. Well, maybe not guns, since Swiss adults keep their military small arms at home, I have read.
I have some other tidbits. The Swiss government requires that companies offer one basic comprehensive policy with uniform benefits for their compulsory insurance. Benefits are defined at the federal level for the basic comprehensive policies. I think this is an important issue which is ignored in the US debate. If we had one basic comprehensive policy, I think a lot of insurance and provider administrative costs would be saved because there would be fewer fights over coverage and reimbursement.
So no more old man Senator Snorts making unspeakably selfish and short sighted and nasty and ugly retro complaints that they do not need maternity coverage.
There is plenty of competition in the less heavily regulated supplementary insurance market for extra benefits for those who want them, and for long term care in Switzerland. But those are strictly for supplemental insurance over and above a uniform basic plan.
There is also a comparative effectiveness program. Drugs and medical equipment that is not deemed cost effective are not covered if substitutes are available. The government has not aggressively pursued comparative effectiveness to the extent that Australia and Germany have, but usually waits for a request for an analysis from an insurance company if it decides it does not want to pay for a therapy. But then there is public process for determining whether a drug, treatment or device should be covered, which I strongly support.
The regulatory scheme is at least in part enforced by very thorough federal audits if an insurance company requests a rate increase above federal guidelines. The audit is not just of the books and financial statements, but includes an investigation of all data and analysis used for the financials, and can go into company operations. I think the Swiss federal audit power is far stronger than anything that exist in the US regulatory system, but not sure.
I think that a Swiss system would work for the US, that is why I do not insist on single payer or public option. But I would favor it only if the Swiss regulatory system could be adapted to the US. Given the current prospects for adequate regulation in the US, I am not even sure attempts at getting a competitive system with a strong public option would solve our problems.
If we can’t do Swiss, then I would go for a Medicare-for-all single payer system adapted from Australia. Hey, how come we don’t hear about the Aussies more? They have crummy health habits like we do and are a wild bunch like we are, and they sex it up like we do, but they are a world leader in life-expectancy, and at much lower cost. It would be far more relevant to hear about Australia than Canada or the UK.
A detailed description of the Swiss system can be read at the WHO European Health Observatory:
http://www.euro.who.int/document/e68670.pdf
http://www.euro.who.int/observatory
Thanks for this post, you make very important poitns for the US debate.
Wesgpc — thanks for helpful insights and added details. I thought you might find the Times article interesting.
I share your skepticism about whether even a “strong” Public Option is sufficient to achieve adequate price controls in a lightly regulated market, which is why I mention the focus on Medicare/MedPAC etc as the main hope. I fear the PO would need to become nearly as pervasive as Medicare to achieve useful leverage over provider costs, which is one of the reasons I’d prefer to see it more as an extension of Medicare, rather than disconnected.
Our Senators have a curious way of seeing what they want — but missing the forest for the trees — by picking up on stupid headlines — “It’s not socialism!. There’s no PO!” — but missing the elements that substitute and achieve the results they claim to be pursuing. The Times didn’t help here.
scarecrow and wesgpc, thanks as always for your analysis.
wesgpc wrote:
scarecrow wrote:
if a successful public option (in a multipayer system) depends on v strong regulation (and i think it does, especially wrt risk adjustment, preventing denial of care, etc) and if with strong regulation (aka swiss system), isn’t is so that we don’t need a public option?
absent the original hacker proposal (which i think might work with less than v strong regulation), imo the rational for a small and limited po seems circular: the po is needed to compete/compensate for weakly regulated private insurance companies, but in order for the po to succeed strong regulation is needed.
the whole thing makes my head hurt… but i keep coming back to something like hr 676 because of the cost savings which allows for universal comprehensive healthcare (no out of pocket expenses) and so an immediate benefit to something like 95% of the population. it would mean the populist approach instead of the technocratic approach (something i’m learning to realize many democrats resist). but i just can’t see the regulatory technocratic approach working without a major change in the gov/corp relationship and that’s a bigger job than hr 676.
I don’t think there’s a “rationale” for a small, limited PO per se, and keeping it that way. I always thougt the argument is that if we can get it started, and expand access to it, it may become what we hope to achieve in time, which is much larger and more effective in transforming the cost structure. I don’t think I’ve ever claimed more than that, but unfortunately the battle isn’t over 10 year outcomes, it’s about whether we even get to try.
i know that and didn’t mean to imply otherwise. even though i disagree with you (i think a small ineffective po is more likely to teach the public that gov can’t be trusted with public insurance — before it could be transformed, even if that is possible)…. i do appreciate your pov and take it very seriously.
Also, for a ‘private system’ public spending accounts for well over half of healthcare expenditure in Switzerland, but I have not checked recent data, I think it is between 60% and 70%.
Also, I forget the details, but I think it could be said that at least at the canton leve, a ‘public option’ does exist in Switzerland. Public insurance companies are allowed to sell the basic comprehensive policy.
And, there is a soft canton level regulation of provider fees in Switzerland, following a Netherlands style stakeholder negotiation process. From the WHO report mentioned in my comment above:
If you look at the Reinhardt paper — the link to the pfd is in the article linked at the bottom;look for the word “Swiss” about two thirds down — he notes the Swiss have been debating varying degrees of public vs private reliance. That was 2004, so your comments are likely more up to day. But like the US, their right wing is pushing to move away from what they have.
lesson i take from this is that leaving private insurance companies in place, even if heavily regulated, leaves an easy opening for privatization.
Ding.
which is one of the reasons i think that the battle for a viable working po is a actually a more difficult fight than single payer. one that is even less likely to succeed and with massive risks (mandates, undermining the fight for single payer by teaching the public that gov can’t run a public insurance program), with far less cost savings and one that provides healthcare that is neither universal or comprehensive.
the legislative battle is only a small part of the fight for a viable working po. the regulatory fights are even bigger… and they happen entirely behind closed doors where insurance companies have even more leverage.
i’m no longer someone who thinks the po is the compromise (from sp). not unless we’re talking about the original hacker proposal, and apparently that was never on the table.
epu’d but I agree.
You’re going to get rid of health insurance?
ideally, private for profit insurance for medically necessary healthcare? yes. i would. my preference is for a publicly financed single payer (hr 676), my second choice is private not for profit companies very, very heavily regulated.
Why trumped the Swiss when the Japanese live the longest steal ideas from the best I always say. The Swiss thats just cover for corporate profits.
The Free Market can’t regulate itself and give us healthcare or anything else thats the lesson of the Bush years.
I do not trust our government to copy the Swiss system without caving in to big Corporate Profits at the expense of people’s lives.
Rahm always leaks to the Times this story smells like Rahm. Three days working in the hot sun no shower Rahm covering up with Old Spice this is obvious to the point of disgusting.
http://healthcare-economist.co…..itzerland/
My Bold So from the most expensive healthcare system Rahm wants us move to be only the second most Healthcare system in the world?
Amateur Hour I am insulted that anyone would think such a Amateur scam would work on us!
Basically, Switzerland runs its healthcare system like a regulated utility. Use private capital to fund it and give it a guaranteed rate of return.
We used to have regulated utilities here in the United States. But they have become unregulated and now earn 35% rates of return. So I doubt it would work here without backtracking through the Reagan Revolution and undoing those “reforms”.
Actually, we still have regulated utilities for transmission, distribution and in most states, generation (some states required/encouraged their utilities to spin off/divest generation, but most didn’t).
These regulated utilities still receive modest ROE – profits, set by their state regulator. They were never “dergulated.”
There are unregulated holding companies that make a lot more money.
There are also separate generation companies, who are not utilities, that sell into markets and make a lot when demand is high and lose their shirts when demand is low — as it is now. Several have been in/out of bankruptcy in this decade.
Demands for high rates of return in large capital investment projects suggest the investor sees a high level of risk. Without a high yield locked in, they won’t touch the investment. In contrast, investors will tolerate much lower returns in a stable, low-risk environment. As Stanford economics professor Ezra Solomon used to say, “seven percent real will suck money from Mars!” Looked at from this perspective, the Reagan Revolution introduced tremendous risk and uncertainty into the system. Moreover, the bifurcation of the US into a first-world ownership class and a third-world pwned class, is evidenced by the collapse of traditional public health institutions such as well-baby clinics and std tracking. Of course, once the investor expects a high rate of return and the business cannot consistently deliver, the investor impatience invites cutting corners, fudging numbers, and ultimately plain-vanilla fraud.
Read more: http://americanaffairs.suite10…..z0SgtkT9VY
If you want cost savings Japan not the Swiss. If you want to live Longer than anyone else Japan not the Swiss!
Amateur Hour 5 minutes I shoot this pathetic idea down.
We just need St. Bernards that arrive at our houses with a little keg of brandy to cure what ails us!
Hahaha!
http://www.npr.org/templates/s…..d=89626309
My bold Everyone covered, they see doctors 3 as often as Americans maybe thats why they live so long and see any specialist they want! And have costly MRIs nearly twice as much as we Americans do but still they spend less on healthcare than we do!
The Swiss are a distraction to protect Corporate profit we need to say Japan copy what they are doing.
Scarecrow, From what little I understand of the Swiss system, it sounds like they are fine with so much government regulation of the private sector in matters of health care that the government has largely eliminated a free market. AND THE SYSTEM WORKS!
So is Nelson Schwartz at the NYT unwittingly saying that the free market doesn’t work in matters of health care and advocating strong government regulation in the United States?
If that’s what he meant, he’s more subtle than I am. If he meant that message, the headline would be different, and the lead paragraphs would highlight that although the Swiss don’t have what we think of as a government run insurance system, they have something that accomplishes good results, which is a pervasive regulator scheme that regulates prices, etc.
So I don’t think that’s what he meant.
Also, if you read the full Uwe Reinhardt article, it turns out the Swiss do provide a national insurance scheme — for kids. So the descriptions above are about how they handle adults. Just a “minor” detail.
No. I think you got his conclusion right.
My point was that he laid out evidence and a set of premises that DON’T SUPPORT HIS OWN CONCLUSION.
That’s why I said that he appears to be UNWITTINGLY saying that the free market doesn’t work in matters of health care and advocating strong government regulation in the United States.
Ah, yes.
The Swiss make it illegal (as do all other industrial nations) to make a profit on basic health care. The private industries compete by service and supplemental (where they can make a profit). The regulations are extremely strict by the government:
Regulations require “a 25-year-old and an 80-year-old individual pay a given insurer the same premium for the same type of policy..Overall, then, the Swiss health system is a variant of the highly government-regulated social insurance systems of Europe..that rely on ostensibly private, nonprofit health insurers that also are subject to uniform fee schedules and myriad government regulations.
The universal compulsory coverage provides for treatment in case of illness or accident (unless another accident insurance provides the cover) and pregnancy. Health insurance covers the costs of medical treatment and hospitalisation of the insured. However, the insured person pays part of the cost of treatment. This is done:
• by means of an annual excess (or deductible), which ranges from about $290 to a maximum of $2,409 as chosen by the insured person (premiums are adjusted accordingly);
• and by a charge of 10% of the costs over and above the excess. This is known as the retention, and is up to a maximum of $670 per year (excluding medication).
In case of pregnancy there is no charge. For hospitalization, one pays a contribution to room and service costs
The compulsory insurance can be supplemented by private that allow for coverage of some of the treatment categories not covered by the basic insurance or to improve the standard of room and service in case of hospitalisation. This can include dental and private room hospitalisation which are not covered by the compulsory insurance.
As far as the compulsory health insurance is concerned, the insurance companies cannot set any conditions relating to age, sex or state of health for coverage. Although the level of premium can vary from one company to another, they must be identical within the same company for all insured persons of the same age group and region, regardless of sex or state of health. This does not apply to complementary insurance, where premiums are risk-based.
Can you imagine the push back by insurance companies and Republicans if we actually tried to do what the Swiss have done?
Here’s an example of the Republican response:
CNN Political Ticker “Corker: Canada, France have ‘parasitic relationship’ with US”
http://politicalticker.blogs.c…..p-with-us/
Thanks for the additional details. Can you confirm that there is guaranteed insurance system for kids?
And please note that these are nonprofit insurers. Remove the profit motive and the US system would dramatically improve, but that ain’t gonna happen. Ever.
Not all are nonprofit. They just can’t make money on the basic plan which they must provide if the want to sell health insurance. A very large percentage of the Swiss buy additional health insurance.. The companies can make money on that. The Swiss system would not be as good as single payer. The Swiss don’t pay as much as we do for healthcare but they do pay more than similar countries with single payer.
Great post and thread! Thanks all.
Freshmen Democratic Senators are speaking about health care reform on C-SPAN 2. Might be worth listening to in order to get a sense of votes on the PO. We all know how much Jane loves to count the votes!
IIRC, the Swiss have price controls and a ban on for-profit insurers in their basic health-insurance market, both of which are excellent ideas. Let’s adopt the Swiss system.
EXACTLY! Let’s all send notes to Nelson Schwartz at the NYT to thank him for calling attention to this superior system!
I’m sure he’d love to know that his conclusions are the conclusions of a moron who has been shown the truth but doesn’t have the courage to see it.
shorter Schwartz: I like the Swiss system, except for all the rules.
I remember seeing an interview with Jay Rock within the last few weeks. I think it was after one of his trips to respond to being summoned to the WH. He said that he was asked to keep an open mind on other means of getting to the same end as the “public option.” So the interviewer (I can’t remember who) asked what other means there were to get to the same end, providing competition that would serve to control costs. His response was (I’m paraphrasing), that’s the thing. There is no other means that I know of. Then he got a little, almost undetectable glint in his eye, as he said, unless the insurance companies want to be treated like public utilities. That, he implied, he could live with. Sounds like the Swiss treat their insurance very much as you would expect public utilities to be treated. Tight, very tight, controls.
You would have thought that the Times’ reporter would have read one of its own columnists (Uwe does a column for them and has done a number of op-eds, not to mention Paul Krugman’s explicit references. The thing about this is that Uwe Reinhardt is probably the most informed person in the United States on these matters, which he has been studying ever since we were grad students together at Yale in the mid 1960s. This is what he does for a living. What does the Times’ reporter do?
Scarecrow, these have been a couple of great, informative posts. I was hoping congress’s August break would have been full of discussions like this. I would also have expected the Finance Committee to have looked at these countries and seen what it is that makes their systems successful, but I doubt it. I imagine they made actual efforts to avoid meaningful comparisons.
Swiss is still expensive by any sensible standard (which omits US). But it maybe only be fourth most expensive now in terms of proportion of GDP spent on healthcare. Luxembourg and Norway are as or more expensive than Switzerland, and of course the US is most expensive. I think Luxembourg is roughly a Medicare social insurance model, and Norway is national health insurance, but not sure and will have to check (it may be the other way round).
To put on my cynical hat (which has been on quite a bit lately) I think we are seeing an effort to misrepresent other countries’ health insurance systems. The truth that several other countries do have well functioning systems, and that they all regulate or eliminate the kind of unregulated competiton seen in the US cannot be hidden forever. Unfair damnation of Canada and the UK is getting old, and the opponents of reform have been caught in several ignorant or dishonest howlers (eg. the UK system would have killed off Steven Hawking, who has lived in the UK all his life).
The next step in the fight for them is to misrepresent other countries’ systmes to make it appear that what people like Conrad and Baucus are proporsing is really like some other countries with more successful systems when in fact that is not the case. First we have Conrad (right? or was it Baucus?) misrepresenting, or conveniently misunderstanding, TR Reid’s book. Now we have a NY Times article effectively misrepresenting the Swiss system.
As other commenters have noted, healthcare systems that are more ideologically acceptable to the US than Canada and the UK, and successful, are not even mentioned, such as Japan. And my own favorite, Australia. Instead we have an obsession wtih countries whose systems could not be easily adapted to the US, and which have features that make unfair and biased accusations of malfunction easy (from a US point of view): Canada and the UK. And misrepresentation of the Netherlands and Switzerland.
I hope there could be an honest discussion of the pros and cons of half dozen systems, so that the US could get a view of what has worked and why. But that seems to be beyond the ability of the US at this time.
Oops. I meant to say that I think Norway is a national health ssystem or service, more like UK. But as I said. I will have to check.
I am not sure a country is locked into high costs forever based on when it adopted an alternative to unregulated competition. Canada and Germany were high healthcare cost countries comparable to the US (which was always among the highest cost countries) when they adopted their current systems decades ago. Over time, changes in growth rates in costs made a big difference for them and can make a big difference for the US.
I think the US has more pure waste that can be eliminated than was the case in the past. In any case, we may be locked into the current pricing structure now, for both insurance and providers, but that can be gradually changed. If not, we may be forced to suddenly change in the medium term, which would be far worse than good reform now.
When we’ve adopted our current system 12.6 decades ago, we were a freshly industrialised country.
A “continental tiger” trying to compete with the industrial powerhouse of the British Empire. Which insisted on “Made in Germany” markers to brand our steam engines as cheap knock-offs.
So, in 1883 the DFH imperial chancellor von Bismarck, a guy who was so conservative that the conservative party of Prussia fractured into party faithful to Bismarck (Deutschkonservative) and a “free” conservative party (Freikonservative), threw his weight behind a law that prescribed mandatory non-profit health insurance regulated at utility level for the working class.
Thanks. but I was talking about post WWII healthcare reforms in Germany in the late 1960s.
I really don’t want to high jack the thread to nick pit, but there were no major “healthcare reforms in Germany in the late 1960s”.
There was a law (Lohnfortzahlungsgesetz) in 1969 were the sick pay which was payed by the sickness funds to blue collar workers was raised to the level of white collar workers, but to call that “the adoption of the current system” is a little far fetched.
Our system is really 126 years old. Often reformed, sometimes streamlined, constantly expanded, seldom cut back — but essentially the same.
Nitpick away. Any information is appreciated from someone who is more familiar with the detailed history than I am. And I typed that out from memory, I should have checked before I wrote that. Sorry
I just checked the data, and I got the timing wrong. Germany, Sweden and Canada were on a cost growth path similar to the US in terms of percentage of GDP going to healthcare all through the 1960s. Germany started lowering costs relative to the US in the mid to late 1970s. I will go read up up to remember why that happened. But any information you have from your perspective would be appreciated.
I was thinking of the Cost Containment Act of 1977. That did keep the basic system the same but introduced cost controls for drugs, target budgets for providers, evened out the stream of contributions and tied healthcare cost growth to income growth, and started the introduction of comarative effectiveness analysis to reduce expenditure on equipement.
And seems like these cost containment methods did not hurt quality. Going by population health measures such as life expectancy at various ages, Germany has made great progress compared to the US since then.
Sorry for the mistake.
All these cost containment measures from 1977 to the GKV-WSG 2007 had mainly four targets:
- reduction of coverage (e.g. glasses/contacts for adults, over-the-counter drugs)
- increase of co-payments (e.g. dental prosthetics now have a 35/50% copay)
- reduction of provider remuneration
- and of course controlling the costs of drugs (through various different measures though the years)
The first two and the last point had little ramifications on quality of care.
The provider remuneration was a mixed bag.
In hospitals the switch from the old “stationary days times x deutschmark” to “diagnosis related groups” (which we, er, borrowed from the Australians ;-)) was, I think, positive for the quality of care (i.e. no incentive to keep patients needlessly long in the hospital).
But the overall shrinking remuneration led to a wave of privatised hospitals, which I’m uncomfortable with.
It used to be that most hospitals were owned by local government, cities and Kreise (~counties), who were willing to make little or no profit from that public service. Now many of them were making deficits and were sold to private investors.
And from my personal experience these hospitals generally weren’t such cesspools of waste and inefficiency that a change from deficit to market returns will be possible without compromising quality in the long run.
Another point are GPs: many rural areas, especially in the east, have now trouble to find young doctors who will open a general practice in a small village. Often such a practise isn’t profitable enough.
As I recall, the Swiss system is the most expensive of the European system- perhaps because it was relatively late to the game and costs had already spiraled up.
The core of all of these systems is that the govt. sets prices..
No it’s not at all “free” market- but it works and directly or indirectly- that’s what the US will need to do to fix it’s problem. No one else other than the federal govt. has the power to do it. I’d gladly exchange the “public option” which is an untested idea with a mandate for govt. to mandate cost ceiling both on insurance plans and on the billings that go to them for services.
Scarecrow. Also all basic insurance in the Swiss system most be sold as not for profit. You only profit by selling additional coverage for non-essential treatments.
I’d imagine that the legal corporate framework in Switzerland combined with the completely different fiscal regime would make comparisons between an American insurance corporation operating under heavy regulation and the Swiss model tenuous at best.
“The Healing of America” by T. R. Reid is a good source of what other countries are doing in the health care area. Switzerland, Germany, France, and others use the “Bismark” model in which the insurance is provided by private entities (usually non-profit) and where at least much of the care is provided by private entities as well. The govt. just REGULATES
It seems like the easiest system to transition into for the US- and is apparently very successful in terms of outcomes and costs.
The argument that “costs are out of control- because the current medical system is not operating according to normal free market principles”–and that therefore the govt. will need to set caps on prices, would seem to be a relatively easy argument to make. I don’t think that the people would rebel if the govt. chooses to lower health care costs.
The US system has developed in a very peculiar manner. Health care is primarily PAID for by employers- and is at heart a cost plus payment model. The insurance company takes the company’s claims for the past year per person and then adds a contingency for inflation and a mark up for profit and administrative expenses- and that’s the cost for the NEXT year. There is really not much negotiation- and the insurance companies know that no matter how much higher health care costs become, they’ll still get their slice off the top.
Hospitals are major players in the system- but they can only market themselves to DOCTORS who are the ones who decide which hospitals to send their patients to- and they want all the latest equitpment- which leads to buying much more equipment in the community than it really needs or can use- which leads to pressure for more tests using said eqipment to collect fees to pay the prodigious note on the thing. There are also more hospitals in many areas- each of them limping along and operating inefficiently.
So who are the customers in this hodge podge- and who actually make the purchasing decisions.
Adam Smith’s invisible hand would slash it’s invisible wrist. It’s a fuckin mess.
I guess the chocolate and mountain scenery distracted Nelson Schwartz from focusing on what the passive-voiced, “required to offer” actually describes: Government regulation. The Swiss government and people use uniform regulation to obtain uniform minimum standards of health insurance and health care.
The Swiss are fiercely independent. They are also passionate about public order and uniformity because, in part, it protects them from government-sponsored inequality and unfairness. Passion is the right word; you can expect a fine for not correctly bundling, tying and displaying firewood according to thickness.
Yet Switzerland has an abundance of expert private health care – for those sheiks and banksters, corporate titans and once and future government ministers who have the cash (however obtained) to pay for it. This debate is about minimum health standards available to all.
Alan Grayson is one of the few in Congress who has correctly framed the debate. We are making a choice whether to save lives and improve individual and community public health, or to subsidize private company profits by forcing people to do business with them without regulating minimum standards for what they receive in return.
The Right claims that regulating business is intrinsically evil. Yet they benefit from and do it all the time, too. We regulate intellectual property. That Coke and Apple computer aren’t made in your cellar from dangerous or faulty materials. They’re the real thing. Drugs sold are ordinarily safe for their prescribed purpose. Foods that poison people are withdrawn by force. Medical doctors and lawyers are licensed, as our hair stylists and massage therapists. We fine or put people in jail for negligently or intentionally selling dangerous products or services. We impose personal liability on executives who falsify the description of their company’s financial stability.
We easily have the power to regulate health insurers nationally. The percentage of GDP they consume alone is an adequate basis. We easily have the power to create a public insurer. If we needed one – we don’t – the rationale would be the industry-wide prevalence of deceptive trade practices.
Insurance is sold as offering one thing when it delivers something of much less value. A few of the exceptions insuresters describe in their notorious fine print. (State laws regulate fine print in contracts all the time.) But most of them are hidden in the insuresters secret bibles and hymnals, which describe the 1400 plus ways they teach their staff to tell their insureds, “No”.
In grand language, our debate is about societal fairness, to what ends public resources will be devoted. It is that. More practically, it’s a street fight with insuresters who pay their gang of lobbyists and legislators $1.5 million or more a day in the sure and certain hope that they will keep them free of obligations to their customers.
We need to make our preferences clear and to make more clear that if they are ignored, the electoral whirlwind will be career limiting for the Blue Dogs and others who ignore it. Then we have to walk that talk, or we will never have Congresscritters who do.
Thanks for the contributions, everyone. Lots of good information/insights here.
Switzerland has managed to achieve:
universal coverage
reasonable premium costs for consumer
excellent health outcomes
high patient satisfaction
And yes it is more expensive than single-payer systems, it is much less expensive than the U.S. and it COVERS EVERYONE. The affluent are not subsidized at any age – unlike Medicare that subsidizes everyone over the age of 65. However, about 1/3 of the population gets subsidies. Maximum drug pricing is regulated. Children under 18 have no deductibles. Standard adult deductible is 300-400 swiss francs. “Basic” insurance plan is actually a real misnomer as it is similar to a luxury plan in the U.S. and covers the cost of medical treatment including inpatient and outpatient care, care for the elderly and physically and mentally handicapped, unlimited stays in nursing homes and hospitals, diagnosis, and so forth. Since 1999, alternative and complementary medicine benefits are also include. On a per capita basis, the Swiss system is 40% less than the American system. But it succeeds only because it is highly regulated. I say, call the Republicans on their bs – say, let’s go with private insurance only – no government insurance – no public plan. But let’s adopt the Swiss regulations on premium pricing, drug pricing and make it illegal for profit to be made on the basic health plan which is quite expansive. Public option might become more appealing to the right!
Here’s some links:
http://open.salon.com/blog/ste…..are_system
http://www.npr.org/templates/s…..d=92106731
http://www.civitas.org.uk/pdf/Switzerland.pdf
Switzerland has the second most expensive health system in the world behind America.
So? They cover their entire population. Their percentage of gdp is 11.3%. Ours is 16.2% with 47 million uninsured. It’s still much cheaper with everyone covered and with regulated pricing and affordable premiums, excellent care and better results. Being 2nd to the US in gdp means nothing. It’s more expensive because they don’t have single-payer. But they also don’t have wait lists, bankruptcies, uninsured people dying without care. If we spent 11.3% of our gdp with everyone covered – affordable premiums and no worries about preexisting conditions, rescission, portablity etc. – we’d be much more justified in saying “we have the best care in the world”.
Whether the Swiss system is expensive to other countries besides the US depends on how you measure healthcare costs.
If you estimate cost in terms of US dollar equivalent expenditure per person, then it looks like an outlier far above other non-US contries. But it is no longer alone, by that measure Norway and Luxembourg are just as expensive now as Switzerland. And Switzerland, Norway and Luxembourg are only 1/4 to 1/3 of the way between other high income countries, so if the US could do that well at reducing costs, that would be a very important achievement. May keep us from going broke.
If you measure in terms of percentage of GDP, then Switzerland is at the top of the distribution of non-US countries, and is very close to France and Germany. It is not a lone expensive health care country far above other non-US systems.
Living in the US, I am not prepared to knock most other high income countries’ systems. I think we could go with a Swiss, Australian, French, system and do much better than we are now in terms of health outcomes for much less money.
I think Switzerland is a good example to discuss, if discussed honestly, because it points out what kind of regulation is needed to make a system based on private insurance work. Too bad it looks like the description NY Times article was a best incomplete, and incomplete in a way that makes the current US proposals of Conrad and Baucus look like they will be adequate when they very probably will not do much other than maybe extend overly expensive coverage to more people.
Insurance markets have always needed to be heavily regulated. Life insurance is an example. In the early nineteenth century, the industry had several near death experiences in the US and England, and lots of people lost their life savings. Gradually regulations evolved that preserved the benefits of the market, but protected both the customers from financial diaster and the industry from self destruction. We should do the same for health care. I guess the difference is that we do not even notice the heavy regulation in life insurance markets anymore, it seems very free enterprise to us. That should be remembered when discussing what healthcare systems based on private insureres should look like. It needs heavy regulation like life insurance.