It may come as a surprise to many Americans to here that not only are all European health care systems not socialized but some are arguably less socialized and more market-based than the US and yet achieve universal coverage. The best example is Switzerland, which has dispensed with providing coverage through work, instead all Swiss purchase insurance directly from the companies. This means that consumers have freedom to pick whatever plan or company they want. Those who cannot afford to buy insurance are given subsidies to help them do so.
Further, since 2002, Switzerland allows insurance companies to be for-profit, unlike those in other European systems. Insurers operate on the canton (state) level, just as most US insurers do, and Switzerland tries to maintain robust competition between insurers over members by allowing them to offer difference prices or plans that cover different types of treatments.
As in the Netherlands, Swiss insurers must also make available a basic plan that is open to everyone, regardless of preexisting conditions or health risk, and the components are comprehensive and perpetually increasing. The price for this basic package is set based on location and age only. They are also forbidden from making money on this package. On all other plans, companies are allowed to discriminate based on age, risk, health status, etc. Rationing and waiting lists are nowhere in evidence.
This is possible in part because Switzerland mandates that everyone buy insurance and imposes stiff fines on those who do not comply. As a result, virtually 100 percent of the population has health coverage.
However, despite giving a lot of market freedom to companies and customers, Switzerland’s health care is not a total free market. Prices for services are negotiated between insurers and doctors/medical facilities but the government in each canton has to approve them. Drug prices are free – up to a ceiling.
Further, the Swiss system is expensive, if significantly cheaper than the US. Switzerland spent 11.3 percent of GDP on health care in 2006, ahead of every other country in Europe, and that percentage is rising much faster than in other countries, 2.4 percent vs. an OECD average of 1.5 percent. Premiums are costly too, and going up “twice as fast as costs.” Families spend approximately $680 per month or around $8,167 annually for four people on the basic plan. Keep in mind that this is all paid directly by consumers, the employer doesn’t contribute as in the US.
Prices for services are also high and paid on a fee for service basis. There is little payoff to doctors or hospitals for bringing them down, in fact they benefit from overuse of tests and procedures, exactly what the US has struggled with in its own system. In general, cost is the most common complaint among the Swiss about their health care. However, Switzerland is one of the few countries that is not currently facing urgent concerns about the financial sustainability of the system.
Switzerland has been conspicuously out of evidence recently but in the past politicians of both American political parties have seen it as a potential model, including a visit there in 2007 by Health and Human Services Secretary Michael Leavitt. Perhaps it is time to bring Switzerland back into the American debate so that we can understand the gamut of health care systems that exist elsewhere in the world and what they tell us about what works, what doesn’t, and the choices you make along the way.
