Obamacare Adapts The Worst Of Swisscare, Rejects The Best

The United States and Switzerland don’t appear to have much in common. But some observers are predicting that Obamacare will prove the most popular Swiss import since the Matterhorn hit Disneyland.

President Obama’s healthcare reform package shares some elements of Switzerland’s system, Santésuisse. And it’s tempting to see Switzerland as worthy of imitation — what with its 99 percent coverage rate and life expectancy that’s second only to Japan.

But Obamacare rejects the best ideas the Swiss have to offer — and adopts the worst. Consequently, the president’s healthcare law will not yield the Swiss-style levels of coverage its cheerleaders lust after.

The chief similarity between Obamacare and Santésuisse is the individual coverage mandate. Both countries require all to obtain health insurance.

The mandate is reasonably popular in Switzerland. More than half the Swiss public supports the country’s healthcare system.

That’s partly a function of the country’s cultural aversion to risk. A study conducted by LGT Group and Johannes Kepler University earlier this year found that 77 percent of Swiss investors — a class probably more tolerant of chance than most — described themselves as “risk averse” or “risk neutral.”

Obamacare does not attract comparable support. Fifty-two percent of Americans would like to see it repealed. An even greater share has consistently opposed the law’s individual mandate.

Swiss citizens choose from a pool of 92 government-regulated insurers, all of which must provide a generous baseline package covering doctor’s visits, medication, in-home nursing care, physical therapy, and hospital stays. Remarkably, the Swiss government spends just 2.7 percent of GDP on health care — nearly two-thirds less than what the U.S. government spends.

Liberal health wonks cite the Swiss experience as evidence that Obamacare will work similar marvels. But Switzerland’s achievements are less noteworthy than advertised.

For starters, 96 percent of Swiss had insurance before the installation of Santésuisse in 1996. So the country’s healthcare overhaul upped the coverage rate by a whopping 3 percent.

Further, Switzerland has not yet figured out how to control healthcare costs — as a new paper published by researchers Ewout van Ginneken and Katherine Swartz in the New England Journal of Medicine points out.

Switzerland and Obamacare are both trying to change the way health care is purchased. Managed care is growing in popularity in Switzerland; U.S. officials are hoping Accountable Care Organizations will prove more popular than the last go-round at managed care, the dreaded HMOs. But according to van Ginnekin and Swartz, “[e]xperience from the Netherlands and Switzerland shows that such efforts are not enough.”

The two scholars also contend that Switzerland has had trouble enforcing its mandate. It’s tried to fight noncompliance by levying penalties of up to 50 percent on top of the premium on the uninsured. Swiss folks who lie about their health coverage can actually go to prison.

The United States will face even more difficulty enforcing its mandate — and therefore won’t come close to matching Switzerland’s rate of coverage. At its peak, the fine for failing to comply with the mandate will represent just a fraction of the cost of insurance coverage. According to the Congressional Budget Office, 30 million Americans — or about 8 percent of the population — will be uninsured in violation of the mandate by 2022.

If there’s one aspect of Switzerland’s healthcare system that Obamacare should’ve borrowed, it’s the decoupling of health insurance from employment. The Swiss are free to pursue whatever line of work best suits their talents and interests — rather than settling for a job simply because of the health benefits.

Further, by assigning individuals responsibility for securing their own health insurance, the Swiss system demands that its citizens be cost-conscious.

Many Swiss opt for plans with high deductibles in order to save on monthly premiums. Indeed, the Swiss pay for nearly a third of their health care out of pocket, according to the Organization for Economic Cooperation and Development (OECD). That’s double the share that Americans spend.

The United States could disentangle insurance from employment — à la the Swiss system — by offering individuals the same opportunity to purchase coverage with pre-tax dollars that businesses currently enjoy. Such a move would inject more competition into the insurance marketplace — and force consumers to be more judicious with their healthcare dollars.

Unfortunately, Obamacare takes America in the opposite direction. The law’s mandate that all employers cover their workers cements the employer-sponsored system in place — and exacerbates the cost problems it creates.

Some elements of Santésuisse would prove beneficial if implemented in the United States. But Obamacare chose the wrong ones. Indeed, it appears that the lessons from Switzerland’s healthcare system have thus far been lost in translation.