NCPA - National Center for Policy Analysis

A HEALTHIER WAY?

February 7, 2006

President Bush is pushing for health care reform based on individual choice. The system in Switzerland offers some of those choices, and some health economists say their system is better.

Under the Swiss system, every resident is required to buy health insurance. If they don't, they pay stiff penalties. Companies have no role. Health care plans are chosen at the kitchen table, not through employee benefit departments.

The Swiss approach insures everyone while eliminating the headaches and costs of health care for companies sensitive to global competition, say observers:

  • The Swiss think the quality of their medical care is among the best in the world. They spend more of their national income on health care, 11.5 percent, than anyone except Americans, who spend 16 percent.
  • The Swiss have the freedom to see any doctor in their canton, and they don't have long waits. And Swiss health care providers have much less paperwork than their U.S. counterparts.
  • In 2003, Switzerland spent an average of $3,781 per person on health care. The United States spent $5,635 per person, according to an October report of the Organization for Economic Cooperation and Development.

Devon Herrick, a health economist with the National Center for Policy Analysis, says U.S. employers got into the business of paying health insurance premiums when they couldn't compete for workers by offering higher wages.

"The only reason our current system exists the way it does is because of the tax laws in the 1940s. Price controls prohibited wage hikes, but you could attract employees with health insurance," he says. And, unlike payroll, health care benefits are not taxed.

"In the end, employees pay their own health care costs," says Herrick. "A lot of employees don't understand that's really not a free benefit. It's part of their compensation."

Source: Jim Landers, "A healthier way? In Switzerland, everyone is insured, and businesses don't pay," Dallas Morning News, February 7, 2006.

 

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