Some proponents of the health care overhaul proposals currently before Congress are pointing to the plan Switzerland has used since 1994 as a possible model for ensuring no U.S. citizen is without health insurance coverage.
The Swiss government requires the nation’s insurance companies to offer coverage to everyone regardless of pre-existing medical conditions or age. The government also requires everyone to buy some sort of health insurance, creating an individual mandate without a government-run public option.
Huge Increase in Demand
Dr. Joseph Werner, a specialist in reconstructive foot surgery and chief of podiatric surgery for St. Joseph Medical Center in Towson, Maryland, foresees a variety of problems if the United States were to adopt reforms akin to the Swiss system.
“The Swiss system is very similar to the Dutch—universal coverage with no government option. Subsidies are provided for the citizens with demonstrated need to pay the premium,” said Werner. “Can you imagine an increase in covered U.S. beneficiaries of 30 to 50 million more than currently? As in the Netherlands, there would be de facto rationing, as demand would far outweigh supply.”
Werner notes current enrollment in U.S. medical schools is more than half female. That is important, he says, because the average female physician has an 11-year career and works an average of three days a week. That greatly lowers the number of hours they can serve patients.
“In the next five years the Medicare rolls will swell by 33 percent due to the aging of the baby boomers,” Werner said. “Yet patient contact hours will continue to plummet in the face of overwhelming demand.”
Merrill Matthews Jr., Ph.D., medical ethicist for the University of Texas Southwestern Medical Center’s Institutional Review Board for Human Experimentation and a visiting scholar at the Institute for Policy Innovation, says the Swiss system in some ways resembles the U.S. individual health insurance market, where people buy their own policies.
“However, the systems operate on two entirely different expectations. The Swiss expect people to join and get coverage young and essentially stay in a plan for many years, maybe for life. In the U.S. individual market, there is a very high turnover,” Matthews said. “Most people are looking for a way to get in a group plan if possible. That creates all kinds of different incentives.”
Matthews believes a case can be made for modeling the U.S. individual health insurance system on the Swiss plan, at least from the government’s standpoint.
“You wouldn’t even need a mandate. If the deal were that the younger you joined the lower your premiums would be—for life—people would have a strong economic incentive to get in and stay in,” Matthews noted.
Werner, however, says there are inherent flaws in the Swiss approach for controlling costs.
“The Swiss system discourages expensive drugs and treatments and punishes doctors with warning letters, [threatening to require] repayment of both fees and the costs of ordered treatments. You can be assured that unless there is tort reform, doctors will continue to resort to defensive medicine, with expensive tests and overusing state-of-the-art drugs,” Werner said.
“The Swiss approach would also eliminate all preexisting condition clauses, forcing the insurance companies to follow their actuaries’ instructions and raise premiums accordingly. There is no free lunch,” Werner added.
The absence of tort reform could precipitate even higher costs under such a system, Werner says, noting the United States has 5 percent of the world’s population and 75 percent of its lawyers.
“Adoption of any of these systems would force Americans to change their expectations regarding health care. You will wait longer and not receive the latest and best treatments and drugs,” Werner said. “Litigation adds significant costs to all our products and services.”
Matthews says under the Swiss system insurers tend to act more like public utilities than real insurers. He says bringing such a model to America would pose many challenges.
“It will be very difficult to transition to such a system because so many people believe that with employer-provided insurance they are getting something for nearly nothing, not understanding the employer is just spending their wages on health insurance,” Matthews said.
Matthews points to an essay by Dr. Alphonse Crespo, “Swiss Health Care: A Clockwork Model that Fails to Keep Promises,” published in October 2006 as part of a joint Institute for Policy Innovation-Galen Institute-International Policy Network project on The Dangers of Undermining Patient Choice.
“The belief that government can fix fundamental flaws in regulated health care systems has yet to come to terms with reality. Copying the failing social experiments of Europe or Canada will not help the United States. Health saving accounts, risk-related insurance, voluntary pooling, and private or corporate philanthropy will address sickness care far more efficiently and adequately than any system based on public financing and bureaucratic regulation,” Crespo wrote.
“Yet such laissez-faire solutions remain anathema to most health care policymakers. This is not surprising. While a truly free market enhances autonomy and personal responsibility, it also reduces waste and drives bureaucracies out of business,” Crespo continued.
Troy Stouffer ([email protected]) writes from Baltimore, Maryland.
For more information …
The Dangers of Undermining Patient Choice: Lessons from Canada and Europe, a joint report of the Institute for Policy Innovation, Galen Institute, and International Policy Network, October 2006: http://www.heartland.org/policybot/results/26243/