Switzerland’s Healthcare System

An overview from the Times:

Swiss private insurers are required to offer coverage to all citizens, regardless of age or medical history. And those people, in turn, are obligated to buy health insurance.

By many measures, the Swiss are healthier than Americans, and surveys indicate that Swiss people are generally happy with their system. Switzerland, moreover, provides high-quality care at costs well below what the United States spends per person. Swiss insurance companies offer the mandatory basic plan on a not-for-profit basis, although they are permitted to earn a profit on supplemental plans.

The Swiss government does not “ration care” — that populist bogeyman in the American debate — but it does keep down overall spending by regulating drug prices and fees for lab tests and medical devices. It also requires patients to share some costs — at a higher level than in the United States — so they have an incentive to avoid unnecessary treatments. And some doctors grumble that cost controls are making it harder these days for a physician to make a franc. The Swiss government also provides direct cash subsidies to people if health insurance equals more than 8 percent of personal income, and about 35 to 40 percent of households get some form of subsidy. In some cases, employers contribute part of the insurance premium, but, unlike in the United States, they do not receive a tax break for it. (All the health care proposals in Congress would provide a subsidy to moderate-income Americans.) Unlike the United States, where the Medicare program for the elderly costs taxpayers about $500 billion a year, Switzerland has no special break for older Swiss people beyond the general subsidy. “Switzerland’s health care system is different from virtually every other country in the world,” said Regina Herzlinger, a Harvard Business School professor who has studied the Swiss approach extensively. “What I like about it is that it’s got universal coverage, it’s customer driven, and there are no intermediaries shopping on people’s behalf,” she added. “And there’s no waiting lists or rationing.”

Regina Herzlinger is one of the smartest minds in healthcare by the way.

What’s good about Switzerland: Universal coverage to prevent the concept of bankruptcy from medical bills. No rationing. More out of pocket costs leads to less waste and more consumerism. Patients make more decisions about their healthcare.

What’s bad about Switzerland: Doctors are still paid on a fee for service basis which leads to ever-increasing costs since the amount of medical services delivered depends on the ever-increasing frequency of disease, newly invented disease, and new therapies in a population. This pits doctors against insurers who try to control costs through expensive, bureaucratic regulations. Therefore, doctors seem unhappy and less well paid.

Switzerland’s Healthcare System