Is the Swiss Healthcare System a Model for the United States? Physicians for a National Health Program Boston, Novermber 2013 Claudia Chaufan, MD, PhD, University of California San Francisco

The Massachusetts health reform more or less follows the Swiss model; costs are running higher than expected, but the reform has greatly reduced the number of uninsured. And the most common form of health insurance in America, employment- based coverage, actually has some “Swiss” aspects: to avoid making benefits taxable, employers have to follow rules that effectively rule out discrimination based on medical history and subsidize care for lower-wage workers. So where does Obamacare fit into all this? Basically, it’s a plan to Swissify America, using regulation and subsidies to ensure universal coverage

‘Similarities’ Switzerland Major reform=ACA, 2010 Retains commercial insurance policies Individual mandate “Affordable” plans with “essential” coverage No discrimination on pre- existing conditions United States Major reform=LAMal, 1996 Retained commercial health insurance policies Individual mandate “Affordable” plans with “essential” coverage No discrimination on pre- existing conditions

The Illusion of Similarity Switzerland Major reform=ACA, 2010 Retains commercial insurance policies Individual mandate “Affordable” plans with “essential” coverage No discrimination on pre- existing conditions United States Major reform=LAMal, 1996 Retained commercial health insurance policies Individual mandate “Affordable” plans with “essential” coverage No discrimination on pre- existing conditions

MANDATORY PURCHASE OF HEALTH INSURANCE Guaranteed Quality Comprehensive Coverage Cost Containment Solidarity/Equality SWISS RESIDENTS (99.9% OF POPULATION) 99.9% of population Out of pocket payments (1CHF=$1.08) -Premiums vary per Canton -Deductible CHF 300/year (Mx. 2,500) -Max. co-insurance: CHR 700 /year -Hospital daily rate CHF15 -No age discrimination. 26 and above= same price (Age categories: 0-18; 19-25) MANDATORY BASIC INSURANCE PLAN the national level Covers all TX’S and DX’S prescribed by a licensed provider for both IN & OUT PT care, certain medications and medical goods, a # of hours of home & LT care, and (some) complementary TX Supplemental Insurance -dental, vision, private rooms (88% pop.) $ PROFIT $ Source: OECD Review of Health Systems, Switzerland, 2011 Insurance Companies (80 to choose from) NO PROFIT!! Risk Equalization insurance co.’s pay into the same pool Subsidies -1/3 of pop. -50% discount of premiums for children/young adults -maternity care exempt -income-based for lower incomes

So…what’s the problem??? Managed care plans (i.e. restricted provider networks) becoming more common (‘popular’) & insurance companies providing ‘incentives’ (e.g. lower premiums vs. higher deductibles) to sign on Higher deductibles lead to increasing out of pocket expenses (foregone care for low-income groups); Restricted networks lead to access problems High costs – only lower than U.S. & Norway (11.4% of GDP), including higher administrative costs due to multiple payers Major premium price variations between cantons & regressive pricing (same for all income levels) IN COMMON: RELIANCE ON PRIVATE FINANCING!!

Is the ACA really “Swissified” Health Care?!....

mandatory requirement to obtain health insurance Source: Kaiser Family Foundation, Million Leftover Undocumented Immigrant Opting out Exchanges/ Marketplace Individual Mandate Employer Mandate Affordable Coverage Increased Quality Reduced Costs 10 broad categories Does not apply to all plans ESSENTIAL HEALTH BENEFITS Increasingly ‘consumer-driven’ (i.e. more out of pocket) Very poor >65 yrs Veteran American Indian PUBLIC PLANS GOVERNMENT Employer Coverage, (FTE & business >50 people) Subsidies < 400% FPL Self Employed/Small Firm Employees Low income Middle income High income PUBLIC OPTION

The reality United States Builds on commercial insurers, tied to employment, income or age Insurers CAN MAKE PROFIT from medically necessary coverage (skimpy & no national standard) RESTRICTED PROVIDER NETWORKS (‘PREFERRED PROVIDERS’) IS THE NORM VERY FEW COMPARATIVE SHOP PRICE CONTROLS ANATHEMA! Service A can sell at whatever price! Financially fragmented – ‘profitable’ patients in private plans, ‘unprofitable’ in public plans (increasingly privatized) Price discrimination by age. EXCLUDES UNDOCUMENTED IMMIGRANTS, VERY POOR (‘HARDSHIP EXCEMPTIONS!) Switzerland Builds on long history of social insurance – coverage no longer tied to employment, income or age Insurers CANNOT MAKE PROFIT from medically necessary coverage (very generous & national standard) All insurers must offer plans THAT INCLUDE ALL PROVIDERS EVERYBODY CAN COMPARATIVE SHOP (even if most do not!) PRICE CONTROLS! (same service, same price) Large pool overseen by government -- risk equalization, healthy/sick same pool No price discrimination by age, immigration status, etc.

Conclusions The ACA is NOT a ‘version’ of LaMAL – doesn’t “turn US into Switzerland” (Paul Krugman)  LaMAL has problems – may even not be working for the Swiss The fallacious debate and spin obscure real problems and undermine search for real solution If the goal is universal, equitable health care, we need a real National Health Plan

What to do? Educate ourselves, family, friends Join the single payer Medicare for All movement Connect the dots (with other public policy issues – war-making) Demonstrate!

Thank you! My appreciation to my colleagues at Physicians for a National Health Program, for their years of struggle to achieve health care equity for the American people