More Switzerland

Aaron Carroll was pushing back on Avik Roy and Doug Holtz-Eakin invoking Switzerland as a model to reform the ACA by noting (correctly in my Professor who teaches comparative health systems at Duke view) that Switzerland is more regulated and controlled than is the ACA in many ways. Austin Frakt was noting that most posts noting the Roy and Holtz-Eakin post didn’t link to Aaron’s post, which is true of the brief post I did.

I think this is mostly because the news in Holtz-Eakin and Roy’s piece was and is primarily political, and doesn’t really have much to do with any facts or policy. They both (and many others) have overstated the case against the ACA for quite a while in my mind; that doesn’t mean I don’t read their stuff. And Holtz-Eakin was Senator McCain’s chief health policy advisor and Avik was an advisor to Gov. Romney. Given all this, the main content of the piece was reform of Obamacare v. strident ideological language arguing against something without offering an alternative that has been the norm for most opponents of the law for the past 34 months. So, even though my first thought was “Switzerland! I thought you guys hated mandates” I am personally glad to welcome them down from the ledge.

For most on my research career, health policy was not really front page news except for short periods (think 1997-2007). Then it became a huge political horse race story, and professors and researchers had to figure out where the line was between advocacy, research, policy analysis, often with great frustration at our being crowded out by other voices. But, it is complicated! is a frustrating answer for a reporter….The incentives in terms of getting broad,popular attention are definitely to overstate and to be as bombastic as possible, but in the end, as an academic all you have to offer is your credibility. I understand Austin’s frustration, but I am not sure what the answer is to fix it. I think TIE has done it very well all considered, and has lots of credibility in ‘bringing evidence to the debate.’

I am not teaching Comparative Health Care Systems this semester, but I went and looked at my overview notes for Switzerland, and well, sign me up:

  • Individual mandate that achieves ~ universal coverage
  • Cantons (like States) regulate medical provision and have lots of discretion in doing so
  • System community rated (I think this was Aaron’s main point; it is less underwriting than allowed in the 3:1 by age with tobacco in the ACA); end community rating and you don’t have Switzerland
  • Employers can pay premium, but it is not tax preferenced; income based premium subsidies for lower income
  • Prices for medical care are set, but not the provision (but there is increasing ‘managed care’ esp on the profiling of doctor behavior by private insurance companies)
  • It is basically the second most expensive health system in the world on a per-capita basis; premiums are similar to employer based in U.S., but docs make less
  • Higher out of pocket share than in the U.S.

As an aside, I think the Netherlands might be a better model for the U.S. down the individual mandate/use of private insurance that is regulated ~ like a utility branch of reform options because of their data driven post hoc risk adjustment in which they don’t worry so much up front above adverse selection, but instead ‘rebalance’ after the fact based on risk pool.

update: revised for clarity

About Don Taylor
Associate Professor of Public Policy at Duke University and author of Balancing the Budget is a Progressive Priority. On twitter @donaldhtaylorjr

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