By Helena Bachmann
One of the most divisive topics in the presidential campaign is the Patient Protection and Affordable Care Act.
For the supporters of the health reform law, the so-called Obamacare is the panacea for all the flaws of the current system, under which tens of millions of Americans are uninsured. The opponents, however, argue that this legislation is ineffective, costly, contrary to free market principles, and a stalking horse for the European style of socialized medicine.
But wait. Not every country in Europe has a government-run health care, and at least one nation has a successful, efficient, and consumer-driven system that provides universal coverage that is based on capitalistic principles.
We are talking about Switzerland, whose health care system is, according to many U.S. experts on both sides of the political spectrum, an example of what America needs. But before we look at whether this model could be transposed to a much larger and demographically different country like the United States, let’s see how the Swiss do it.
An effective system
In 1994, a law that guaranteed equal access to health care was passed in Switzerland, stipulating that every resident must purchase a basic insurance package from one of over 90 private companies.
This package, which covers a wide range of services including doctor’s visits, hospital stays, medications, preventive care, physical therapy, rehabilitation (including at health resorts), and in-home nursing care, must be made available to all residents, regardless of their health status or pre-existing conditions.
The insurance companies are not allowed to make any profit on this basic package, but they can – and do – make money on the optional supplemental insurance, which covers “bells and whistles” services like complementary and alternative treatments.
What about the cost? Depending on the chosen deductible, the average monthly premium for an adult for the basic package is $300, plus some small co-pays. However, the premium can’t exceed 8 percent of personal income or the government will subsidize the cost, as it currently does for about a third of households, mostly new immigrants and single-parent families.
This is a good place to mention that, unlike provisions of the Obamacare, Swiss employers don’t provide coverage. This is to ensure that nobody feels obligated to stay in a job just for the benefits, and everyone can shop around and freely choose a plan they like best.
How does this system work in reality? Swiss consumers can choose any doctor, and there is no wait to see specialists or have surgeries – one of the anti-Obamacare arguments in the American debate.
Everyone has access to a high-quality care and the latest medical technology. The country’s track record on preventive care and management of chronic diseases is top-notch.
The above statement is not just hearsay but is reflected in patient satisfaction surveys. For example, in an international study conducted in 2010, the majority of Swiss respondents said they were happy with their health care system, compared to 21 to 43 percent of
Americans, Britons and Canadians.
For and by the people
Since health insurance in Switzerland is compulsory – as the Obamacare will be as of 2014 – 99 percent of the country’s 8 million residents are insured. Those who aren’t— mostly new immigrants — are not off the hook: the government will buy a plan on their behalf and send them the bill.
This last point can be considered a “pro” or a “con,” depending on your cultural and political orientation. For many Americans, the mere word “compulsory” reeks of government control and over-regulation of personal and private lives. But to the risk-averse Swiss, compliance – at least in this case – comes easy. They also tend to see equitable access to health care as the cornerstone of a solidary and humane society, a value most people in Switzerland share.
An important point to note here is that under the Swiss system of direct democracy, citizens have the right to challenge any legislative decision by forcing a referendum, or enact new laws (in both cases, a required number of signatures must be collected –50,000 for a referendum and 100,000 for a new law – in order to bring an issue to a nationwide vote).
In the case of the 1994 health care law, the government put it to the referendum and voters accepted it, so, in effect, the compulsory health coverage was not imposed by the government, but chosen by the people.
The fact that the Swiss have a direct say in the political process that impacts their lives may explain their level of compliance with the various laws.
Crunching the numbers
So is there a downside to a seemingly flawless Swiss health care system? Yes, there is, and it has to do with money.
Annual cost of health care per resident is almost $5,350, second highest in the world after the United States, which spends approximately $8,000 per person.
In the past two years, Swiss health care costs have risen just over 3 percent, which is reflected in premium increases. Needless to say, consumers are not happy about that, although the government keeps pointing out that a high-quality medical care doesn’t come cheap.
And, if put in perspective, these numbers may not look so bad: in international studies, Switzerland ranks among the most effective among 29 nations in achieving better health outcomes for money spent. In fact, Switzerland has the second-highest life expectancy in the world, as well as a very low infant mortality rate – far better results than comparable figures for the United States in both categories.
Of course, you may argue that we are comparing apples and oranges here, so let’s see whether Swiss system could be, at least to some degree, adapted in the U.S.
A whole different world
First, let’s talk about the differences.
• Demographics: Switzerland’s population is currently 8 million – roughly the size of Virginia – so it is easier to implement any program there, not just health care, than in a massive, high-population country like America. (Contrary to general belief, though, Switzerland is not a homogenous nation –22 percent of the population are immigrants).
• Economy: According to International Monetary Fund, the average annual income in Switzerland is about $80,000; current unemployment rate is less than 3 percent. The comparable figures for the U.S. are $48,000 and just over 8 percent, respectively. Obviously, purchasing health insurance is much less of a financial burden for a wealthy and employed population.
By the way, a family physician in Switzerland makes about $120,000 to $130,000 a year – roughly the same as an architect or senior software engineer. This may seem like a very modest figure by U.S. standards, but keep in mind that Swiss medical schools (and universities in general) are free, so grads start out their careers unburdened by debts.
• Culture and mentality: As mentioned above, the Swiss are much more inclined to stress solidarity and equitable society over individual interests. By the same token, they don’t see the government as the enemy – as a matter of fact, they voted for higher taxes to ensure that the country’s modern infrastructure and all the public programs are well funded.
• Government’s role in health care: Though insurance providers are private, the government sets prices for the compulsory coverage, ensures that insurance companies provide the same basic benefits to every consumer, and monitors against abuses. It also regulates drug prices and fees for medical tests in order to keep costs under control.
The other side of the coin
Given all the disparities, is there anything in the Swiss system that can inspire – or at least be a useful model – in the U.S health care reform?
Maybe. Unlike systems in most European countries, Switzerland’s is rooted in the private, competitive market, with the government playing only a limited regulatory role, as explained above, and not running or paying for everyone’s health care.
Also, Switzerland has the same high standard of medical care and facilities as the United States, so, in this case at least, there’s parity.
Assuming that America wants a universal coverage borne out of the private market, one that is efficient and relatively cost-effective, it would make more sense to emulate Switzerland’s model than totally different, socialized systems in England, France or Canada. This divergence in management styles is one important reason for not painting all the European health care approaches with the same brush, as many Americans tend to do.
Deloitte Consultancy. (2011). Survey of health care consumers global. Report. http://www.deloitte.com/view/en_US/us/Industries/US-federal-government/center-for-health-solutions/health-care-consumerism/a953d042ecf81310VgnVCM3000001c56f00aRCRD.htm
Herzlinger, Regina E., Harvard Business School. http://www.hbs.edu/faculty/Pages/pro…spx?facId=6476
International Monetary Fund. http://www.imf.org/external/data.htm
Organization for Economic Co-operation and Development on global health issues (OECD). http://www.oecd.org/els/healthpoliciesanddata/
Swiss Federal Office of Public Health. http://www.bag.admin.ch/index.html?lang=en