Last week, the Thomas Jefferson Institute sponsored a health care conference in Richmond and over 60 key business leaders used the event to discuss how our lives could be impacted by health care reform.
Those attending heard a number of key experts and practitioners offer their concerns with the current health care situation and how it might be improved. All agreed that our country has the most advanced health care in the world. We live longer than most in the world and our available health care is the best. However, our costs are high, the bureaucracy is complicated and the government is already deeply involved in health care through regulations, VA hospitals, Medicare and Medicaid.
Many at the conference agreed that the business provided health care insurance system should be scrapped and instead give that pre-tax health insurance payment directly to the employee to buy health insurance. This would reduce health insurance costs and just as importantly put each of us in a more direct relationship with our health care needs, likely making us more health conscience.
There was deep concern about the ultimate result of bringing the federal government into a more dominant position in health care/health insurance in our country. Everyone understood that there are great long-term dangers to this policy. At the same time, most agreed that we need to look at ways to reduce costs of health insurance, cover those not covered today and reduce, if possible, the frightening unfunded liability faced from Medicare, which, according to Dr. Regina Herzlinger of the Harvard Business School, currently tops $38 trillion, almost three times our gross national product, and is increasing. And, of course, Medicaid is also a huge and growing annual obligation that drains our federal and state budgets.
Since every one of us in Virginia will be impacted by health care reform – regardless of what the final result is in Congress this year – it is important for us to know that there is an alternative that might be considered. One such alternative was discussed by Dr. Herzlinger, an approach she outlined in her book, “Who Killed Health Care” published by McGraw Hill in 2007.
It seems that Switzerland has had a nationally required health insurance program since the mid-1990, one that is consumer driven thus putting the market in the driver’s seat of the health care insurance system.
In Switzerland everyone is required to have private health insurance. Companies don’t get involved. Government is not involved except to mandate health insurance. Those who can’t afford insurance are subsidized, but they too must buy their policy in the private sector. So everyone has an individual health insurance policy. Everyone – young and old, rich and poor – are covered and have equal status in the doctors’ offices. No one is turned away.
Health care quality in Switzerland is on par with that in the United States but the cost per capita stands about 40 percent less. The costs are kept down because of market place competition. There are over 80 health insurance companies in that small country. A minimum policy is required and additional coverage is available if the person wants to increase the insurance policy. Moreover, if the policy holder wants, they can contract for a five year health insurance policy and, if healthy over those five years, fully one-half of the insurance premiums is returned to the person covered.
Why has this approach not been part of the health care reform debate in this country? Why is the discussion centered around what increased role government must have? Why should we even consider a national health care system that, as seen in England and Canada, clearly dumbs down care, when an alternative such as this is sitting out there proven to work?
Dr. Herzlinger thinks that converting to this program might cost as much as $2 trillion over the next ten years. However, as this program took hold, health insurance costs would come down as they have in Switzerland. As everyone would have a policy we would be able to back ourselves out of the Medicare and Medicaid obligations and the savings from that would go a long way toward paying this $2 trillion cost.
Maybe over the August Congressional recess, leaders such Senators Webb and Warner and Congressmen Cantor and others can convert the Switzerland Plan to a new United States Health Insurance Plan. It is surely worth some thought.