LATimes goes to Switzerland

An LA Times reporter recently paid a visit to a doctor in Switzerland to see how the healthcare system was working there in view of the fact since 1994 it has been predicated on somewhat the same system now being proposed by Obama. What he found is that it doesn't work all that well because costs continue to rise rapidly and there appears to be a substantial overuse of the system by the Swiss. According to the reporter healthcare costs the Swiss about half of what it costs Americans but the costs appear to be rising there at least as fast as here if not more. So what's going on here? Everyone in Switzerland is required to have an insurance policy provided by a privately owned company (but there is no" public option"). The government runs the system by determining the costs of services provided and monitoring the providers according to norms established by usage. There is little paperwork as procedures are billed directly by providers electronically to the approved insurance companies and they receive payment within 10 days. Supposedly the insurers operate these healthcare plans on a not-for-profit basis, using them to establish consumer relationships for their for profit lines of insurance. There are no co pays after a small threshold is met ($300), and as s consequence the system is overused by just about everyone since docs have little incentive to say no to requests for services (MRIs, etc). and consumers basically get any service for free. Bottom line is costs are rising rapidly here, as in all systems throughout the world. Government oversight seems to be as inefficient as the totally operated government systems.

From all the evidence it appears the root cause of rising costs and over usage of service providers lies in the the third party payer nature of all systems including the totally government run systems like Canada, and the hybrids like the Swiss system. As Obama is wont to say, let's be clear about one thing. The system the Obama Administration is pushing, involving the public option, is designed to turn the US healthcare industry into a single payer, government run system in time. What the third party payer aspect of all these systems does that leads to rising costs is it removes the consumer from the cost equation. This leads to indifference to costs by consumers and removes the discipline of competiive pricing in the cost equation. I want and need a car. If I don't care how much a Mercedes costs, I'd just soon have it rather than a VW. To control rising costs competitive pricing is the answer. To get to competitive pricing in healthcare we need to get away from the third party payer system we now have. The simplest way to do that is to remove the third party from the system. That would mean eliminating employer provided healthcare insurance in the US and return to the system that existed before the 1940's when our current system was created. This would not be as difficult to accomplish as one might imagine which will be the subject of another post.