Matt Yglesias praises Douglas Holtz-Eakin and Avik Roy, and notes that their continued call for a more-Swiss like health care system is a “surrender” to Obamacare. I’ll leave that political nuance to him. But I have got to point out that while Switzerland seems to be some “holy grail” to many conservatives, with respect to a health care system, I’m not sure they know what it really is.
While most Americans view their healthcare system as “free-market,” Switzerland actually has the most market-oriented healthcare system in the West. It translates into universal coverage and low entitlement costs. Swiss government entities spent about 3.5 percent of gross domestic product on healthcare in 2010, compared to 8.5 percent in the United States. That’s a difference of more than $5 trillion over 10 years: real money, especially relative to our $16 trillion debt.
The reasons other countries spend less are not because they are “free market”. Why not cite how much less the UK spends? Or Canada? Or pretty much any other country in the world? The reason they spend less is because everything (including drugs, physicians, etc.) costs less there.
There is no “public option” in Switzerland. Instead, citizens qualify for means-tested, sliding-scale subsidies and choose among a variety of regulated, private-sector insurance products. The Swiss have the freedom to choose their own doctors, as Americans do, and access to the latest medical technologies. They also have short waiting times for appointments.
There is no “public option” here. What are they talking about? But more importantly – do they know that the Swiss health care system forces every insurance company to offer a non-profit product to everyone, which is closer to a “public option” than anything we have?
More of their ideas:
The first is to replace or reform Obamacare’s exchanges, which are larded with costly mandates and regulations. These drive up the price of insurance, while limiting insurers’ ability to come up with more innovative, cost-efficient products.
Do they know that the Swiss health care system has an individual mandate? Do they know that the Swiss health care system has arguably more regulations, such that they can’t even charge a 25 year old and an 80 year old a different price (like you can in Obamacare)? Do they know that the Swiss health care system regulates drug prices and fees for lab tests and medical devices? Do they know the most someone can pay for insurance in Switzerland is 8% of income (which is less than Obamacare allows)?
“Community rating,” for example, will dramatically increase premiums for young people, a counterproductive approach when one considers that most uninsured Americans are in their 20s and 30s. States should build free-market exchanges with affordable health plans — as Utah has done — and demonstrate their superiority to Obamacare’s costlier approach.
Do they know that the Swiss health care system employs community ratings?
Fourth is to gradually shift the remainder of Medicaid’s low-income enrollees into the exchanges. Today, Medicaid recipients face a strong disincentive to seek work, because entry-level jobs can force them to give up their health coverage in exchange for modestly higher income. The exchanges would allow these workers to climb up the income ladder while maintaining their insurance.
Do they not know that this will be more expensive than giving them Medicaid? Do they not know that’s why Congress didn’t do it?
Look, I get that they’re trying to make a political point, and I applaud the fact that they’re trying to make conservative changes to Obamacare to make it more palatable to their goals and ideology. But it’s just hard to look at the rest of the world and argue other countries make the point Roy and Holtz-Eakin assert.
I don’t think the Swiss health care system is what they think it is.
[Cross-posted at The Incidental Economist]