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The Healthcare System in Switzerland Works

Posted Sep 28 2012 1:14pm
Stanley Feld M.D.,FACP,MACE

Paul Krugman is starting to drive me crazy with all his fact free declarations about the healthcare system.

He recently declared that consumer driven healthcare has been a bust everywhere it has been tried. Paul Krugman as an “expert” has once again made a declaration that contradicts the facts. He is clearly not interested in being confused by facts.

Paul Krugman is against putting consumers in control of the healthcare system. He feels, as President Obama feels, that a central committee (IPAB) should be in charge of deciding what to do with limited health care resources. 

He has said,

 "Consumer-based" medicine has been a bust everywhere it has been tried. Medicare Advantage was supposed to save money; it ended up costing substantially more than traditional Medicare.

Medicare Advantage costs the government more money because the government gave the private insurance companies a $3,000 bonus per senior to get Medicare out of the government’s hands.

This is one of the principle reasons I am not a fan of Medicare Advantage.

In reality Medicare Advantage provides more services at lower premiums and deductibles for seniors. Seniors with Medicare Advantage use fewer services resulting in a lower cost of total services and more profit for the healthcare insurance industry.

“America has the most "consumer-driven" health care system in the advanced world. It also has by far the highest costs yet provides a quality of care no better than far cheaper systems in other countries.”

Paul Krugman is wrong.  Switzerland has the most consumer driven healthcare system in the world and the Swiss government pays far less than most countries while the Swiss get a high quality of care.

His ideology blinds his mind. The healthcare system in Switzerland is a consumer driven healthcare system that works for the Swiss. The Swiss government makes the rules and then gets out of the way.

The Swiss healthcare system can be used to start a constructive conversation about healthcare reform in America that can satisfy both conservatives and liberals and save the U.S. from bankruptcy resulting from expanding entitlements.

The healthcare system in Switzerland is a consumer driven healthcare system in which consumers have choice. It has resulted in a low income tax rate, universal healthcare, and satisfied stakeholders

The Swiss system could not be totally transformed into an American system because of America’s embedded ideology and prejudices as well as stakeholder vested interests. However it outlines the government’s role in a healthcare system and highlights the power of a consumer driven system.

America’s healthcare system must undergo significant changes. Most of these significant changes have been ignored by President Obama in Obamacare. It empowers government and not the consumer.

Paul Krugman has stated flatly, "Patients are not consumers"

“Patients get illness that others (government) should decide on whether it is cost effective to treat.”

This attitude toward patients points out the disrespect for the intelligence and judgment of consumers.

The elements critical to meaningful reform of America’s healthcare system must include the following changes.

1. There must be significant and meaningful Tort Reform to decrease the practice of defensive medicine.

2. There must be significant reform of the healthcare insurance industry’s financial rules to stop the industry from listing non-direct care expenses as direct patient care.

3. There must be regulations to cause the healthcare industry to be competitive for consumers’ business. Government should not be the consumer of healthcare.

4. There must be legislation to change the healthcare insurance industry’s incentives for profitability in order to create innovative healthcare insurance products that will reduce healthcare costs.

5. There must be significant financial incentives for consumers to be motivated to save healthcare dollars.

6. Consumer must responsible for their health and healthcare dollars. The entitlement mentality must be eliminated.

7. Hospital systems should be competing for patients’ healthcare dollars and not government healthcare dollars.

8. Physicians must be responsible to consumers and not hospital systems or the government.

9. Insurance costs must be community rated.

The healthcare system must be a consumer driven system just as purchasing groceries, automobiles, computers and televisions are. If the product is poor the company will go out of business.

America’s goals should be universal healthcare coverage with freedom of choice, and reduction of healthcare costs.

It is worth understanding the Swiss healthcare system as a starting point to meaningful reform of the American healthcare system. 

These are the major features of the Swiss Healthcare System:

1.Swiss citizens buy insurance for themselves.

2.There are no employer-sponsored or government-run insurance programs.

3.Insurance prices are transparent to the beneficiary and community rated.

4. The government defines the minimum insurance benefit packages that must be offered.  Everyone must have the minimum healthcare insurance coverage.

5. All packages require beneficiaries to pick up a portion of the costs of their care (deductibles and coinsurance) in order to incentivize citizens to be responsible for their health and the control of healthcare dollars spent.

6. My ideal medical savings account would provide a positive incentive by rewarding citizens who did not spend the first $6,000 dollar to keep that money in a retirement account.

7. Patient incentive is a critical element in healthcare reform because incentives provide consumers with a reason to take care of their health and healthcare dollars 

8.The Swiss government subsidizes health care for the poor on a graduated basis, with the goal of preventing individuals from spending more than 10 percent of their income on healthcare insurance.

9. Citizens can be responsible for a significant component of healthcare costs in Switzerland.

10. Consumers often opt for the cheaper healthcare insurance packages. They have freedom of choice.  Many Swiss consumers choice chose minimal insurance plans combined with high-deductible insurance plans.

11. Citizens are free to choose comprehensive insurance coverage or some form of supplemental coverage. It is not a one size fits all system.

12. Ninety-nine percent (99.5%) of Swiss citizens have health insurance.

13.There are about 100 different private insurance companies in Switzerland with multiple healthcare insurance plans.

14. It is clear that the government has made the rules and then has gotten out of the way. The rules have set up a market driven competitive healthcare system.

15. The result has been that healthcare insurers are competing for consumers’ business on price and service. Consumers gravitate to the best price and service that fits their needs.

16. The Swiss healthcare system not only helps to curb health care inflation but most beneficiaries have complete freedom to choose their doctor.

17. The setup of the system has resulted is low waiting times for physician and hospital services with a minimum of bureaucratic slow downs. 

18. The Swiss healthcare system aligns all the stakeholder incentives by empowering the consumer while helping less fortunate consumers.

19. Government spending on health care in Switzerland is only 2.7 percent of GDP, by far the lowest in the developed world.

U.S. government spending on health care was 7.4 percent of GDP in 2008 and will exponentially grow under Obamacare.

 “ If the U.S. could move its state health spending to Swiss levels, it would save more than $700 billion a year.”

Dr. Regina Hertzlinger has an excellent description of the Swiss healthcare system in the following You Tube.

Switzerland’s healthcare system cannot be superimposed on the U.S. healthcare system. It can be used as a starting point to empower consumers to drive the healthcare system and be part of the solution. 

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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