In his column this morning Paul Krugman explains that the reforms making their way through the Congress would not so much move the U. S. healthcare system in the direction of Britain’s National Health Service, a system of socialized medicine, as it would in the direction of Switzerland:
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.
Switzerland is a poor model for the United States to emulate.
The Schulers are Swiss—real Switzers from Canton Schwyz. We came over to this country about 150 years ago and, unlike many new Americans, we have maintained contact with our Swiss relatives. I correspond occasionally (not frequently enough, I admit) with my Schuler relatives in Switzerland and, roughly in every generation, the American Schulers have visited the Swiss Schulers.
There are many reasons that Switzerland is in no way comparable to the United States. A quick look at some facts and figures will demonstrate that clearly.
Switzerland is a small, landlocked country of about 7 million people. We have more uninsurable people in the United States than Switzerland has population. Switzerland has a long national history and a remarkable degree of consensus. This is something I can’t prove to you with facts and figures but it’s something that every Switzer knows. That sort of consensus is a prerequisite for maintaining political support for a healthcare system like Switzerland’s and we don’t have it.
Significantly, Switzerland is surrounded by countries comparable to itself in per capita GDP, egalitarianism, and universal healthcare coverage. The incentives for emigration to Switzerland from its neighbors are limited. We, on the other hand, share a long, essentially open land border with a country with a per capita GDP a quarter our own. That tends to increase our costs, at least at the margin, a factor Switzerland does not contend with.
But for by far the most important reason that we shouldn’t emulate the Swiss model look at the graphic above. Just as in the United States healthcare costs in Switzerland are growing at an unacceptably high rate. We are starting from a much higher base than the Swiss and without serious cost controls or the national will to implement them there is little reason a Swiss-style system if implemented in the U. S. will not grow even faster than before.
I have no doubt that my hardheaded Swiss cousins, aided by consensus and traditions, will be able to cope with rising healthcare costs by making the changes to their own system that are necessary. I have a lot less confidence that we’ll be able to do that. If the temperature of our current national debate convinces you of nothing else it should convince you that there is no national consensus on healthcare here.