Healthcare VI: Other Models

In my previous posts, I have discussed the need for a balance in economic theology between subsidiarity and solidarity as it pertains to evaluating healthcare reform in this country. I have gotten a surprising number of ‘likes’ from people across the political spectrum when I post these on Facebook, which has surprised me. Maybe I am making too much sense, and sense is something we cannot have in political discourse these days.

I closed my last blog entry with a foray into looking at beginning to look at other systems, particularly what I learned about Israel’s system when I was there a few months ago. Israel is more socialized than not, though it is not a pure form of socialized medicine, as there are options within the system and also private coverage available for those who want it. For purposes of this blog entry, I wish to delve into the Swiss system, which I think is actually the existing model that American could most easily copy because it is a free market system though they have largely universal coverage.

 The kicker is that there is a coverage mandate in that all people must get insurance coverage for themselves, but none of the policies are run by the government. The second kicker is that individuals have to provide their own insurance; the Swiss system is completely individualistic in that it is not employer based. The law provides that all policies must offer a standardized basic benefit package, including inpatient, outpatient, and nursing home care. Premiums are community rated, in that an insurer can have different plans for different premiums, but they have to offer the same premium to everyone in their respected age groups.  In essence, there are multiple insurers and multiple plans with basic coverage guaranteed by the government. In some cantons, there are more than 40 different insurers an individual can pick from.

In terms of subsidiarity, policies are overseen and regulated on the local canton (state) level and not by a monochrome national policy, with the exception of basic coverage guaranteed and some national regulations. There is much more state control over these policies than in the US where things like Medicare are largely regulated on the Federal level.

For more in depth analysis, there is an excellent paper here.

There are a few drawbacks, depending on how you look at it. Insurance is viewed as a social insurance, and so is not “for profit.” That is not necessarily a drawback, but this does lead to some issues with keeping costs down. Switzerland is second only to the US in terms of GDP spent on healthcare. The Swiss have likewise had trouble with controlling the cost of healthcare spiral. The Swiss, being a highly wealthy nation, expect top notch healthcare. This means the Swiss use more healthcare options, surgeries, and doctors than even Americans. Thus, the basic economic idea of ‘demand goes up, price goes up’ is at play. The idea of competition bringing down prices has largely not panned out. There is apparently enough wiggle room in the laws and regulations where insurers can cherry pick patients and treat the high risk patients just badly enough that hopefully they will move on to some other insurer’s policy, as there is no pre-existing condition exclusions.

Of the systems I have looked at (more to come in the future), I find the Swiss system to be the healthiest balance of subsidiarity and solidarity that I have found in a system. While not perfect, the beautiful thing about the Swiss system is that they have largely created a system on universal coverage without socializing it in the classic sense of socialized governmental monopoly. They have also done it by granting healthy government subsidies to the poor (at least 40% of the population is eligible for some or total financial assistance) to cover the cost of insurance and premiums. It is also a system that could be adapted to the American model of individualized and privatized insurance.

Food for thought…