Maggie Mahar has a interesting post discussing the Swiss health care system (“Herzlinger’s Meme on Switzerland and Consumer Driven Medicine“). The Swiss government mandates that all individuals purchase health insurance. While the insurance is subsidized by the government–and more heavily subsidized for poor Swiss individuals–most Swiss pay a large percentage of their insurance premiums. The government pays 25% of the premium while the individual pays the rest. Is having a “skin in the game” what is creating a more efficient health care system, where Switzerland has lower health care spending and better medical outcomes? Ms. Mahar doesn’t believe it (and neither do I):
But the truth is that Swiss patients have relatively little say over either the cost or the quality of the care they receive. Prices are regulated by the government, which also tries to make sure that consumers are getting value for their health care dollars by selecting which drugs, devices and tests insurance will cover. In fact, it is the very visible hand of a smart, largely efficient government that accounts for Switzerland’s relative success.
The key to consumer driven health plans (as recommended by Regina Herzlinger in the WSJ and JAMA 2004) is that 1) consumers–not employers–are the ones choosing their own health plans and 2) that consumers have adequate information regarding the quality of the plan. The paradox of the Swiss system is that while the Swiss do decide their own plan and have quality information regarding their plan benefits, this quality information comes due to the fact that the government strictly regulates a minimum benefit. This minimum benefit package on the one hand makes it easier for consumers to know what their health plan will cover, but on the other reduces the consumer’s health plan options and makes the health insurance system less “consumer-driven.”
Thanks to Joe Paduda for the link.