How The Swiss Do Health Care

Bill Steigerwald
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Posted: Sep 14, 2007 12:01 AM
How The Swiss Do Health Care

Everyone knows our health-care system, superior as it is in so many ways, is too expensive, too bureaucratic and wasteful.

Basically, we hand over about $2.2 trillion each year to hospitals, insurance companies and government paper-pushers -- and then we let them micromanage our health care like we are helpless babies, not rational consumers.

Everyone also knows by now that Canada’s “free” national health care system -- like its sibling socialistic systems in Britain and France -- is a just another Big Government fraud.

So can any wealthy, modern country get health care right without resorting to socialism? Yes.

You never hear it touted by the media but Switzerland uses market forces, not government rules and red tape, to create a private, affordable, high-quality health-care system for its 7.5 million citizens. And it spends 40 percent less per capita than we do.

Sen. Tom Coburn, an Oklahoma Republican, a fervent fiscal watchdog and a practicing physician, knows all about the Swiss system. Much of his proposed health-care reform bill -- the Universal Health Care and Access Act -- is modeled on it.

Coburn’s plan, a major overhaul that can be found at coburn.senate.gov, is complicated, controversial and in no danger of becoming law anytime soon, if ever.

The bill's key elements include achieving universal health-care access by using tax credits to pay for individual or family insurance, phasing out reliance on employer-based insurance, allowing people to choose their own doctors and health insurance and stressing preventive care.

On Wednesday, Sen. Coburn explained why he likes the Swiss system, which operates sort of like our car insurance: You must buy health insurance but you can choose among many plans from many private companies.

Since every Swiss is covered, Coburn said, there is no cost-shifting -- i.e., no hidden subsidizing of those who don't have insurance at all or don't have enough. Cost-shifting costs Americans about $250 billion a year, Coburn said. Ending it would save a family of four about $4,000 a year.

Another virtue of the Swiss way, Coburn said, is that it has fostered a range of innovative insurance products. For example, there are five-year policies that reward customers with lower and lower rates if they do the preventive things the company asks. A third virtue, he said, is a national high-risk pool that all insurance companies contribute to that essentially protects companies from suffering heavy losses in a given year.

Fixing America's health care won't take more money, said Coburn, who notes we already "pay too much. ... One out of every $3 we’re spending today didn’t go to help anybody get well and doesn’t prevent anybody from getting sick."

"What we need to do is we need to start changing our paradigm to prevention instead of treating chronic disease. That’s what has happened in the Swiss system, and that’s why their costs are not going up."

Switzerland is tiny and doesn't have our social problems. But Coburn says its consumer-driven approach -- which is transparent to consumers in price and quality -- would work here.

Coburn knows markets aren't perfect. But he knows why the Swiss system works so well: "It forces people to shop, it forces people to make decisions. ... The point is, markets work -- if, in fact, we’ll trust them."