As healthcare reform was debated over the past two years, cross national comparisons between the United States and other developed nations (such as the Netherlands, Japan, and France) provided insight into how universal healthcare could be achieve through a multipayer system with managed competition. Switzerland, a nation that instituted similar reforms just over 15 years ago, serves as another case study for American health reform.
The design of the health care system in Switzerland resembles the vision set forth for the American system when President Obama signed the health reform law last month. Prior to it’s own health reforms in the 1990s, the Swiss health system was decentralized and subject to 26 different cantonal (similar to US state) authorities. Switzerland’s health reform focused on the concepts of an individual mandate, guaranteed enrollment, community rating, and a federally defined basic health care package. Health care was transformed from a locally regulated to a nationally regulated industry following Swiss health reform.
In Switzerland, families can choose from among 90 different private health insurers, each offering the basic health plan on a non-profit basis. These insurers are only legally permitted to earn profit by selling supplemental packages which offer amenities like private hospital rooms and services excluded under the basic health care package.
The Swiss fund their system very differently than the French or Dutch, nations which focus heavily on payroll and other tax systems. In Switzerland, citizens are required to purchase their own insurance policies directly (and unlike in the United States, employers often do not pick up the tab). To offset this financial burden, Switzerland offers subsidies to cover premium costs that would exceed 8 to 10 percent of an individuals annual income. Nearly one-third of all citizens receive a subsidy. Similar subsidies are featured in the newly passed health reform law in the United States.
Cost sharing by patients in the Swiss systems does appear to be quite high. Out-of-pocket payments represented over 31 percent of health costs in 2002. Consumers directly paid for over 68 percent of health costs (including premium costs) in Switzerland whereas in the United States this figure is less than 25 percent. Some argue that this cost consciousness if a prime driver of lower health costs in Switzerland. Others believe that the tight federal regulation of the Swiss health care industry is the real reason. Whatever the reason, Switzerland has lower per capita spending on health, lower government spending on health, and outcomes that rival the United States.
As the United States implements its own health care reforms, cross national comparisons to places such as Switzerland serve as examples of a future American health system stressing universal care and personal responsibility.
The Swiss system incorporates several of the key pieces of America’s health reform contained in the Patient Protection and Affordable Care Act (community rating, guaranteed issue, individual mandate, and a basic health insurance package). Two issues remaining in the Swiss system are excessive costs for consumers and a lack of quality data upon which to influence consumer decision-making. Regardless of those two flaws, US administrators should look to Switzerland for instruction on how to implement the new health reform law.
While some call for repeal of the new American law, citizens of Switzerland view their individual mandate as a part of the social compact of their nation.
A factor distinguishing the Swiss system from the new American health reform is the simple proclamation that no insurance company can profit off the basic health insurance package. While this may be heresy in America, Switzerland, another capitalist democracy, has demanded this very same non-profit mentality in its health care industry. This, of course, requires a shift of mindset and a realization that health care is an imperfect market in need strict regulation to function better.
“Sick Around the World.” A PBS special on health systems around the world.
Cedric K. Dark, MD, MPH