Ten Miles Square


February 22, 2013 10:46 AM What’s the Swiss Health Care System Really Like?

By Aaron Carroll

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.

For instance:

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]

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Aaron Carroll ,MD, is an associate professor of Pediatrics and the associate director of Children’s Health Services Research at Indiana University School of Medicine.


  • President Lindsay on February 24, 2013 2:14 AM:

    There was a PBS Frontline documentary (back in 2009, I think) called Sick Around the World that examined the health care systems of various developed countries, Switzerland being one of them. Very worthwhile to watch this for anyone interested in this topic. Just look in the usual places for it, it's available. It will almost certainly make you royally pissed off at our lame system. If anything indicts our system for it's big-money corruption it's the fact that virtually every other highly-developed country spends half or less of what we spend on health care, with better outcomes. Obamacare is a poor substitute for any of these, a half-measure at best. There's no excuse for that when we have solid evidence from country after country, with decades of data, proving that our country needs the services of a cerebroproctologist the worst way.

  • President Lindsay on February 24, 2013 2:18 AM:

    AARGHH! It's and its. How about allowing posters to edit their own posts. That would be a nice feature, and shouldn't be tough to implement.

  • Jeff on February 24, 2013 7:12 AM:

    Did you know that ,for now,this is still America.Did you know that currently we do NOT have a free market system? If we did I could buy health insurance from any company.Not just the ones "allowed" to do business in Ohio.Did you know our population is MASSIVE compared to Switzerland? Did you know we have politicians who are thrilled to offer as much welfare to anyone who wants it.Did you know we are no longer a free people.Did you know its time to LOCK AND LOAD and GET IT ON!

  • George W Obama on February 24, 2013 9:59 AM:

    Only a liberal would want to continue our current social welfare program for insurance companies! If we adopt a health care program like every other industrialized nation on earth we can cut our cost in half. And the population of all those nations is MASSIVE.

  • Matt on February 24, 2013 6:26 PM:

    "I applaud the fact that they’re trying to make conservative changes to Obamacare to make it more palatable to their goals and ideology."

    As you've demonstrated, every bit of evidence they cite for their proposals is bunk - and there's NOTHING applause-worthy about spewing the same tired old RW lies to support trying to hurt real people. This isn't a college debating exercise, this is REAL LIFE.

    The facts on the ground don't need to change to accommodate their ideology, their ideology needs to either get back in touch with reality or STFU.