Taking Another Look at Swiss Health Care

The Swiss health care system [gated, but with abstract] has attracted interest from many conservatives because insurance there is mainly private, long-term, and personal and portable. By some estimates it also is the most egalitarian health system in the world. What is less well understood is that when the Swiss replaced mixed government and private financing of health care with mandatory health insurance in 1994, the resultant cost cutting efforts both damaged quality and introduced a lot of waste into the Swiss system.

In 2002, the government banned all new medical practices to control costs. The ban runs until 2010. Until then, a new physician cannot open a practice unless an old physician retires or dies. Efforts to save money by merging hospitals have created irrational allocations of specialty units. Alphonse Crespo, a Swiss orthopedic surgeon, reports that resources are now so poorly distributed that “because of the mergers, the distances between specialty units in some cantons are large.” Patients needing a urologist may have to go to another hospital. Patients have actually been put in helicopters just for a consultation. Researchers at the University of Lausanne report difficulties in accessing psychiatric care, rehabilitation care, long-term care, and orthopedic care. Rationing is more likely to be imposed on the elderly and those with “a poor level of social integration.” Researchers in Geneva report that outcomes from the Swiss reforms suggest that financing health care using social health insurance is more regressive than direct financing. If true, this means that social insurance systems like ObamaCare end up taxing the poor more heavily [gated, but with abstract] than existing systems in which most people pay for their own care and the poor rely on government programs.

Between 1971 and 2005, the average inflation-adjusted general practitioner salary in Switzerland fell by 37 percent before taxes. More young doctors are choosing to become specialists because the pay is better and the work is more interesting. There is a developing shortage of primary care. In March, swissinfo.ch reported that general practitioners held the first doctors’ strike “in living memory.” The government had decided to further ration practitioner access to laboratory tests.

With mandatory health insurance premiums set to rise 15 percent this year, the Swiss government is proposing more cuts. The cuts include restrictions on the type of health insurance that can be offered, restrictions on outpatient services, and a “patient tax” that would require people to pay for their first six visits to a doctor’s office. To make care more difficult to access, Swiss insurers may also be required to offer free telephone medical services as a “first port of call.” Even with the cuts, in some cantons, the mandatory premium increase may be as much as 20 percent.

According to , a site for comparing Swiss insurance premiums, a policy for a 40-year-old in Geneva with roughly a $2,500 deductible has premiums between $2,140 and $3,741 a year for basic coverage. Treatment is limited to the canton of residence, and access to medical care is controlled with one’s HMO or general practitioner acting as a gatekeeper. Hospitalization in a private or semi-private room, the right to choose one’s physician freely, or nationwide coverage requires the purchase of a supplementary plan at additional cost.

People in the US with health insurance generally get broader coverage for less. The exception is in Massachusetts where the 2006 health reform bill incorporated the mandatory insurance requirement and government controls that are the hallmark of the 1994 Swiss reforms. Like the Swiss, the Massachusetts reforms have resulted in high costs, growing waiting lists, and restrictions that make it difficult for patients to get medical care.

Like the Swiss plans, the public plans offered by the Massachusetts Connector Authority are issued to all applicants regardless of health status. They limit treatment to Massachusetts, and feature primary care physicians that control access to care. A 40 year old Boston resident pays $3,240 a year for a $2,000 deductible plan in Massachusetts Connector Authority.

Health insurance costs much less in US states with limited government control of health care and health insurance. In Houston, a 40 year old man has a wide choice of policies with deductibles of $2,500 at prices ranging from $1,236 to $2,673 a year. A 40 year old “uninsurable” Houston man with cancer or another serious health condition can get a policy with a $2,500 deductible for $6,108 a year through the Texas high risk pool. By offering uninsurable people the option of paying more for a policy, Texas keeps health insurance costs down for people who purchase insurance before they become ill. Some states further subsidize high risk pool premiums by reducing them for people with incomes below a specified level.

Even with extensive government involvement, the Swiss have not solved the problem of inequality. The following table shows the variation in age-adjusted breast cancer mortality rates per 100,000 women aged 55-74 in four Swiss cantons in 1980-1982 and 2000-2002.

Breast Cancer Deaths

Comments (6)

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  1. Ron Greiner says:

    “People in the US with health insurance generally get broader coverage for less. The exception is in Massachusetts”

    Obomacare will force Massachusetts bloated premiums on the rest of the American states.

    Obamacare is a nightmare.

  2. Devon Herrick says:

    The Swiss system has some good attributes – especially the concept of personal and portable health insurance that people can carry from job to job. Unfortunately, political meddling is slowly eroding the positive qualities of the Swiss system. Guaranteed issue regulations remove much of the incentive to purchase insurance while young and healthy. It also penalizes those who maintain continuous coverage by making them subsidize those that free-ride. The individual mandate is supposed to reduce free-riders, but it also invites special interests to lobby for coverage of their services – saddling enrollees with bloated benefit packages and driving up the cost of coverage.

  3. Ken says:

    Interesting to get a more well rounded view of what is actually going on there.

  4. John Goodman says:

    Here is Morton Kondracke writing about the Swiss experience and Harvard Business School Professor Regina Herzlinger’s view of it.

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