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The Swiss Menace


wiegie
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pretty much what I have been saying for a long time

 

The Swiss Menace

 

By PAUL KRUGMAN

Published: August 16, 2009

 

It was the blooper heard round the world. In an editorial denouncing Democratic health reform plans, Investor’s Business Daily tried to frighten its readers by declaring that in Britain, where the government runs health care, the handicapped physicist Stephen Hawking “wouldn’t have a chance,” because the National Health Service would consider his life “essentially worthless.”

 

Professor Hawking, who was born in Britain, has lived there all his life, and has been well cared for by the National Health Service, was not amused.

 

Besides being vile and stupid, however, the editorial was beside the point. Investor’s Business Daily would like you to believe that Obamacare would turn America into Britain — or, rather, a dystopian fantasy version of Britain. The screamers on talk radio and Fox News would have you believe that the plan is to turn America into the Soviet Union. But the truth is that the plans on the table would, roughly speaking, turn America into Switzerland — which may be occupied by lederhosen-wearing holey-cheese eaters, but wasn’t a socialist hellhole the last time I looked.

 

Let’s talk about health care around the advanced world.

 

Every wealthy country other than the United States guarantees essential care to all its citizens. There are, however, wide variations in the specifics, with three main approaches taken.

 

In Britain, the government itself runs the hospitals and employs the doctors. We’ve all heard scare stories about how that works in practice; these stories are false. Like every system, the National Health Service has problems, but over all it appears to provide quite good care while spending only about 40 percent as much per person as we do. By the way, our own Veterans Health Administration, which is run somewhat like the British health service, also manages to combine quality care with low costs.

 

The second route to universal coverage leaves the actual delivery of health care in private hands, but the government pays most of the bills. That’s how Canada and, in a more complex fashion, France do it. It’s also a system familiar to most Americans, since even those of us not yet on Medicare have parents and relatives who are.

 

Again, you hear a lot of horror stories about such systems, most of them false. French health care is excellent. Canadians with chronic conditions are more satisfied with their system than their U.S. counterparts. And Medicare is highly popular, as evidenced by the tendency of town-hall protesters to demand that the government keep its hands off the program.

 

Finally, the third route to universal coverage relies on private insurance companies, using a combination of regulation and subsidies to ensure that everyone is covered. Switzerland offers the clearest example: everyone is required to buy insurance, insurers can’t discriminate based on medical history or pre-existing conditions, and lower-income citizens get government help in paying for their policies.

 

In this country, the Massachusetts health reform more or less follows the Swiss model; costs are running higher than expected, but the reform has greatly reduced the number of uninsured. And the most common form of health insurance in America, employment-based coverage, actually has some “Swiss” aspects: to avoid making benefits taxable, employers have to follow rules that effectively rule out discrimination based on medical history and subsidize care for lower-wage workers.

 

So where does Obamacare fit into all this? Basically, it’s a plan to Swissify America, using regulation and subsidies to ensure universal coverage.

 

If we were starting from scratch we probably wouldn’t have chosen this route. True “socialized medicine” would undoubtedly cost less, and a straightforward extension of Medicare-type coverage to all Americans would probably be cheaper than a Swiss-style system. That’s why I and others believe that a true public option competing with private insurers is extremely important: otherwise, rising costs could all too easily undermine the whole effort.

 

But a Swiss-style system of universal coverage would be a vast improvement on what we have now. And we already know that such systems work.

 

So we can do this. At this point, all that stands in the way of universal health care in America are the greed of the medical-industrial complex, the lies of the right-wing propaganda machine, and the gullibility of voters who believe those lies.

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First, I'm not sure I trust Krugman, but let's assume everything about the other countries in that op-ed is true. The way he explains the Swiss system, it's not a "public option", it's basically our system with two additional rules:

1) Insurers must take whomever at the same price, regardless of preexisting conditions, and

2) There is a "welfare assistance program" (my term) for folks below some income floor.

 

That is a far cry from obamacare and the rules in the current bill. Which is it wiegie? You've lived there, and based on experience I'll trust your info.

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First, I'm not sure I trust Krugman, but let's assume everything about the other countries in that op-ed is true. The way he explains the Swiss system, it's not a "public option", it's basically our system with two additional rules:

1) Insurers must take whomever at the same price, regardless of preexisting conditions, and

2) There is a "welfare assistance program" (my term) for folks below some income floor.

 

That is a far cry from obamacare and the rules in the current bill. Which is it wiegie? You've lived there, and based on experience I'll trust your info.

 

you are right about the public option, and for that reason the swiss system is not a terrible one to model reform after. certainly better than the canadian or UK systems.

 

and there seem to be signals that, thanks to tanking polls, public outcry and moderates of his own party jumping ship, the obamanauts are throwing in the towel on the "public option". good. now they have to pay for it AND deal with the fact the current bills do next to nothing to "bend the cost curve". of course, most folks say the best way to do both is to end or limit the tax exemption on employer sponsored health benefits. so hopefully they cave on that point next. if they do, you know, we could actually end up with something that might sorta work.

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First, I'm not sure I trust Krugman, but let's assume everything about the other countries in that op-ed is true. The way he explains the Swiss system, it's not a "public option", it's basically our system with two additional rules:

1) Insurers must take whomever at the same price, regardless of preexisting conditions, and

2) There is a "welfare assistance program" (my term) for folks below some income floor.

 

That is a far cry from obamacare and the rules in the current bill. Which is it wiegie? You've lived there, and based on experience I'll trust your info.

you forgot:

3) People are required to buy health insurance--this is KEY (as it helps avoid the adverse selection problem which makes pure free-market solutions to health-care inefficient)

 

I would be fine with a Swiss-style insurance program.

 

(If you check, I am pretty sure that I have never argued for a public option (I also don't think I have argued against it either). It could be beneficial, but I am not sure.)

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This should have been the discussion on day one. Instead, the POTUS lost control of the issue and allowed idiots to turn it into a :wacko: euthanasia debate. Nice job, Obama. You just got schooled by Palin. And congratulations on pissing away the bulk of your post-election political capital. :D

Edited by yo mama
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This should have been the discussion on day one. Instead, the POTUS lost control of the issue and allowed idiots to turn it into a :wacko: euthanasia debate. Nice job, Obama. You just got schooled by Palin. And congratulations on pissing away the bulk of your post-election political capital. :D

Hmmmm. Not sure it's as bad as that but why can't we sometimes simply take a look at what other countries do and say "Hey, that looks good, let's study that and then if we still like it, implement it". Why do we have to try and create our own system from scratch all the f'n time? I've never heard anyone plugging the "Swiss model" until now, yet it looks pretty good to me, what little I've seen.

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Hmmmm. Not sure it's as bad as that but why can't we sometimes simply take a look at what other countries do and say "Hey, that looks good, let's study that and then if we still like it, implement it". Why do we have to try and create our own system from scratch all the f'n time? I've never heard anyone plugging the "Swiss model" until now, yet it looks pretty good to me, what little I've seen.

Obama's proposal is dead. He doesn't have the votes. And I'm not even sure I mind because I was never convinced his proposal would solve the real problems (i.e., providing reasonable coverage to all citizens, getting a handle on rising health care costs, but without absolutely destroying the quality of care enjoyed by those who currently have it).

 

The defeat of Obama's proposal is going to seriously undercut any national level health care reform efforts going forward, which is a shame. The debate in this thread is great, but moot IMO. The president bet that he could ram his proposal in between the post-election afterglow and the upcoming mid-term elections. He lost that bet and has left himself, and his future domestic proposals, more vulnerable as a result. I'm still an Obama supporter, but he blew it on this one.

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the swiss model is, in essence, a lot like the model of the bi-partisan wyden-bennett bill in the senate. I think I may have alluded to that bill (to silence from the left-leaners here) in the past as a sensible alternative to the pulbic option nonsense being shilled by the democratic leadership, and while single-payer advocates like krugman were saying the public option was a must. but hey, if they want to pretend like this massive retreat on their part is what they wanted all along, fine with me, if it saves the country from going down the socialization path. you know who else's health care plan the swiss system looks a lot like? john mccain's.

 

here's an excerpt from an article I just found about the swiss system:

The best healthcare system, from a conservative perspective, is that of Switzerland: it beats the U.S. system in terms of its performance, efficiency, universal coverage, and consumer empowerment. Although the Swiss system is not perfect, in empowering consumers and providing universal health insurance through market mechanisms, it merits serious consideration.

...

It is a system that deserves the attention of every American interested in market-based health reform. Regina Herzlinger, McPherson Professor of Business Administration at Harvard and the “godmother of consumer-driven healthcare”, wrote in late 2008:

 

 

“The country of Switzerland has universal coverage, costs that are 40% lower than ours and that inflate at lower rates, and an excellent health care system in terms of outcomes and resources. The key to their success is that the Swiss system is consumer-driven: consumers buy their own health insurance from more than 90 private health insurance firms. If they cannot afford it, the cantons subsidize it. If they are sick, they pay no more for their health insurance than the well (the Swiss insurers risk-adjust each other). Consumer oversight insures value for the money better than oversight by governments and employers.”

 

For conservatives, who generally favor market-driven solutions, the Swiss system has achieved a great deal on the demand side, by placing the consumer front and center and getting employers out of the way. Whereas in the U.S., health insurance is commonly tied to employers, and whereas many Americans find it unaffordable to purchase individual health insurance policies (in part due to heavy state regulations), in Switzerland the whole health insurance market revolves around individual insurance policies. Swiss citizens can choose from one of hundreds of reasonably priced, competing insurance plans from dozens of competing health insurers. They may choose a high-deductible plan, a low-deductible plan, or an HMO plan.

 

Many insurance plans offer rebates for certain lifestyle choices: in many cases, non-smokers can receive a steep discount on their premium, which is a far more humane practice than, say, rationing government health services to punish smokers and the obese. And because health insurance is a contract between individuals and health insurance companies, Swiss citizens can switch jobs or start their own business without it having an adverse impact on their health insurance (the opposite of what happens in the U.S., where loss of employment can jeopardize health insurance when COBRA runs out).

 

It should come as no surprise that the Swiss system is far more consumer-driven than the American system. In a 2004 piece for the Journal of the American Medical Association on the Swiss healthcare system that elicited spirited responses, Herzlinger revealed some remarkable statistics. In 2000, the U.S. government paid for 44.5% of healthcare expenses, whereas in Switzerland, the government paid for just 25.4%. Whereas consumers in the U.S. paid for just 23.3% of expenses, consumers in Switzerland paid for a whopping 68.2% of healthcare expenses. Employers, meanwhile, paid for just 6.4% of healthcare expenses in Switzerland, but 32.2% under the severely distorted American system.

 

The Swiss system, then, has some real merits. So what’s not to like? For one, it has too much regulation: Herzlinger writes that the Swiss government has put in place onerous minimum benefit packages while micro-managing prices. Both practices are nefarious, but a more serious flaw lies in the supply side of the Swiss system. As Herzlinger emphasizes, the Swiss government micromanages medical care suppliers, not only dictating medical care prices but also specifying the bundles of care for which it will pay, similar to the deeply flawed Medicare reimbursement system in the U.S. that reimburses the cost of procedures instead of rewarding healthy outcomes period.

 

Then, there is information. A true consumer-driven system would feature easily available, standardized performance metrics on healthcare providers and physicians so that consumers can easily compare performance of physicians and hospitals. Much like in the United States, however, there is an absence of reliable health performance measures in Switzerland. Swiss consumers cannot easily find information on, say, the rate of bacterial infections in a certain hospital or the rate of botched hip replacement surgeries of a certain surgeon. Swiss consumers rely, for the most part, on widely published surveys of satisfaction of patients treated in certain hospitals.

 

As successful as the Swiss system is, its system would be truly path-breaking if its deficiencies were successfully addressed. The most dangerous thing that U.S. policymakers could do is adopt the most intrusive practices of the best European healthcare systems without adopting the concomitant free-market aspects embedded in those systems. As Americans debate how best to reform their healthcare system, the British, French, Dutch and Swiss systems offer a number of lessons: most important is that the more consumer-oriented a system, the more likely it is to deliver effective care.

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How refreshing, an administration willing to compromise.

 

:wacko: Perhaps they're willing to compromise, but that isn't the case here. Representatives are scared of losing seats because of the outcry. It's about holding and keeping power, just like always. I'd love to see a movement start that all fedgov employees and congresscritters have to go into whatever plan. Sauce for the goose...

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How is it possible that now is a good time to look at spending an additional 1 Trillion on this when we are already expected to spend 3 Trillion this fiscal year. The health care plan is something I'm really not against at this point, I'm just confused as to how it's okay to propose this extra spending without increasing taxes on everyone at some point in the near future.

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The health care plan is something I'm really not against at this point, I'm just confused as to how it's okay to propose this extra spending without increasing taxes on everyone at some point in the near future.

 

well, they are going to raise taxes. I mean, at this point, the dem leadership has been sufficiently beat down on this that I don't believe anything will pass without corresponding tax hikes to pay for it. and yeah, everyone should have to pay for it, and if they want to pay for it the way that will actually work to drive down health costs long term, they will make everyone pay for it by eliminating the tax exclusion on health benefits. now, you can offset the impact of some of that tax hike by a corresponding lump sum tax credit equal to what most folks would pay in taxes on a fairly barebones health plan. but that is by far the best way to do this, it raises revenue AND addresses many of the underlying economic problems driving health care costs out of control.

 

whether obama actually WILL is another question....because he will take major heat for it politically if he does. taxing health benefits and offsetting it with a tax credit was an idea mccain touted during the campaign, and obama demagogued him on it ruthlessly -- there will be tons of youtube clips exposing him as a hypocrite. same deal on his pledge not to raise taxes on anyone making under $250K.

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