Healthcare Wanderlust: Switzerland

by Amy Myers

Today we bring you the first in a new series of international healthcare comparisons.  I’ll periodically post a comparison of the U.S. health system against that of a different nation.  We’ve heard for years now that the U.S. consistently has the highest health care expenditures per capita (check out the chart below), without any impact on health outcomes.

Whether it is through similarities or differences, we hope these comparisons can shed light on the current state of the American healthcare system and teach us a thing or two about what works and what doesn’t across the globe. 

More than cheese.  Cue “It’s a Small World After All:” first up in our tour of nations is Santésuisse, the Swiss health system.  Switzerland has long been considered one of the world’s premiere health systems; with a 99% coverage rate and life expectancy surpassed only by Japan, maybe that isn’t surprising.  While some supporters cheer the U.S. for attempting to follow in the footsteps of its Swiss counterparts, many dissenters argue that trying to apply the principles of the Swiss system to our unique troubles is about as mad as a hatter at a tea party.

The system.  But I’m getting ahead of myself.  Let’s take a look at how the Swiss set up the Santésuisse.  The Swiss system is largely decentralized, as its cantons (like states) take responsibility for licensing providers, hospital planning and subsidizing certain programs and institutions.  Coverage is universal, and residents are mandated to purchase insurance from competing companies.  The Statutory Health Insurance (SHI) benefits include a defined set of benefits that are decided by a government agency–starting to sound familiar? In many ways, the recent Affordable Care Act reforms resemble components of the Swiss healthcare system.  However, Avik Roy over on Forbes argues that “…there is an enormous difference between adding Swiss-style controls and subsidies onto a purely private, individual health insurance market, and bolting those same provisions onto the malformed American system, as PPACA did.” Lots of loaded words there–let me walk you through what they mean.

Sources of HC Payments

The differences.  One of the substantial differences between the U.S. and the Swiss system is in the payment sources for care.  In the table at right, we can see that employer coverage is basically nonexistent with our European friends, and that the government also plays a much smaller role in paying for health care in Switzerland.

The Swiss government also provides subsidies to the needy with a reported one-fifth to one-third of citizens receiving some sort of government subsidy of some kind (this might be a good time to revisit Adrianna’s recent discussion of premium increases and subsidies).  Unlike the U.S., the Swiss cannot buy additional insurance for any out-of-pocket expenses. Since no insurance plan offers complete coverage, that leaves a lot of choice in the hands of the consumer to determine what policy will be the best for them and their health.

The similarity: One of the major similarities between the Swiss system and the U.S. reform is the individual mandate.  The historically risk-averse and politically neutral Swiss complain very little about the requirement to carry insurance.  In fact, over half of the country’s residents support the Swiss healthcare system; according to the Forbes article, 52% of Americans who would like to see ACA repealed, though a November 2012 tracking poll by Kaiser Family foundation  found that number to be 33% (though another 18% of respondents didn’t offer a preference).  It is important to note, though, that only 4% of Swiss citizens were uninsured prior to the introduction of the Santésuisse in 1996–by contrast, about 16% of Americans were uninsured when the Affordable Care Act was passed in 2010.  Scholars also contend that Switzerland has run into a few snags in trying to enforce the mandate, including complications from weak financial penalties for failing to purchase coverage. And if you lie about having insurance in Switzerland? Do not pass GO!, do not collect $200 – you can actually go directly to jail.

So what?  So what do these similarities and differences mean for health outcomes and general health of the population?  The table below from JAMA takes the Swiss demographics, health outcomes, expenses, and health resources and lines them up next to the U.S. and others, as well as several U.S. states.

Overall Comparisons

The verdict? The Swiss show better outcomes and far lower costs–albeit with a little bit of inefficiency (Read:  17.9 beds per 1000 people!).  So what remains to be seen is this:  Will implementing Swiss tactics impact our own healthcare spending and outcomes? Or will the tried and true elements of the Santésuisse fail to leave the same impression on the ever-changing U.S. system?

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Amy earned her MHA from the University of Missouri and works in healthcare market analysis and strategic planning.
Follow her on Twitter @amyloumyers or subscribe to the blog.

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One thought on “Healthcare Wanderlust: Switzerland

  1. alsanblog says:

    The first question we should consider with respect to systems and the regulation of healthcare is whether the approach should be centralized or decentralized. And decentralization would not only refer to government, but more importantly, to markets and competition within markets.

    The European Union doesn’t attempt to control healthcare for the citizens of its member states, but leaves healthcare up to each country. The equivalent of this in the U.S. would be for the federal government to bow out and let the states handle the general welfare of their citizens with regard to healthcare.

    Some people complain that the U.S. is becoming like Europe, but really, we’re going far beyond Europe in healthcare. Placing the healthcare of 315 million people in this country under the control of a central authority would be almost unprecedented in the world.

    Healthcare is mostly a local activity where people visit doctors and hospitals located within a few miles of where they live. People also come together privately in the form of insurance companies to distribute the risk of high, unpredictable medical expenses, and it can take as few as 25,000 subscribers to adequately distribute such risk.

    It seems that healthcare is well suited to a decentralized approach, but the U.S. is going in precisely the opposite direction, both with regard to government and markets. It’s hard to see how a principled defense of what’s happening here can be made.

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