By Claudia Chaufan, M.D.
Labor Notes, Dec. 31, 2014
Supporters of a single-payer, Medicare-for-all health care system in the U.S. were puzzled September 27 when Swiss voters rejected a reform proposal by 62 percent.
The new law would have replaced the current system, where about 60 insurance companies offer mandatory health coverage, with a single insurer, the government. It would have offered all medically necessary care, paid for by taxes adjusted to each person’s ability to pay.
To Americans who’ve worked for such a system here, nationally and state by state, it was a blow. What’s not to like about single payer?
Swiss and American media, academia, and business sectors rushed to interpret the results. Virtually all crowed that the Swiss people had rejected government-run national health insurance because they preferred private insurers.
But these convenient interpretations rely on false assumptions to justify a model of health insurance that is unraveling—less conspicuously in Switzerland, but dramatically in the U.S.
Let’s look at what’s wrong with these pro-business interpretations, and see what lessons the Swiss referendum has for single-payer advocates here.
Washington Post “policy wonk” Jason Millman wrote that the Swiss rejection shows that single-payer has little chance of gaining popular support in the U.S.
He notes that in 1996, the Swiss voted for an individual mandate that compels everyone to buy a basic package of health services. That law eliminated discrimination for pre-existing conditions, meaning companies have to sell equal plans at equal prices to all customers. The government subsidizes low-income people. In Millman’s view, the resulting Swiss system is very much like Obamacare.
Another policy reporter, Avi Roy from Forbes, asserted that Obamacare (and Romneycare before it) was modeled on the Swiss system: people shopping among competing private plans with little government interference.
Roy says the referendum demonstrates the “political popularity” of universal coverage via private insurance. He concludes that because the Swiss have rejected single payer, there’s good reason to believe Americans will reject it, too.
What’s Wrong with the ‘Official View’?
These interpretations are based more on ideology than on facts. Why?
First, Swiss health care is not a version of Obamacare. The differences are critical to understanding the implications of the Swiss referendum for health care reform here.
Second, Swiss health care, though far superior to ours in terms of access, quality, and equity, has critical problems that threaten the system. Those problems illustrate why, four years after Obama signed the Affordable Care Act into law, health care access, quality, and equity are increasingly threatened here too. The Swiss is a model to reject, not to embrace.
Third, the referendum does not prove that the Swiss don’t want government involvement in health care, nor that they like private insurance companies. Quite the opposite.
Indeed, an analysis of a series of referendums over several years shows that, like the U.S. population, the Swiss are increasingly unhappy with treating health care as a business, rather than a social good.
1) Obamacare is not a version of the Swiss system.
The current National Health Care Law, known as LaMal, requires that everybody living and working in Switzerland carry health insurance—we call this an “individual mandate.” So the Swiss are required to purchase insurance for a uniform, comprehensive package of medical services.
But the national government operates at every level to make everything run smoothly. To more than 50 percent of the population, the government offers full or partial subsidies to purchase insurance. So more than 99 percent of the population is covered.
The government also compels insurers to sell policies to everybody at the same price, irrespective of health status, medical history, gender, age, or location (within each canton, the administrative equivalent of a U.S. state). A 25-year-old and an 80-year-old pay exactly the same premium for the same plan. The only exception: those under 25 pay substantially less.
If your income changes, or job changes, or marital status changes, your doctor need not change.
The government also enforces a “basic” package that is very comprehensive—in the U.S., some call it “Cadillac,” as if only spoilt Americans would dare demand it! Thus basic insurance, Swiss-style, includes outpatient care—essentially whatever a doctor prescribes—hospital care, mental health, all pharmaceuticals on the government’s list, some rehabilitation services, some dental care, some herbal medicine, and acupuncture.
Importantly, the government forbids insurers to make a profit from the sale of the mandatory package, and it compels them to contract with every single health care provider in Switzerland.
The government also imposes a system of risk equalization. It compensates companies that enroll individuals with more expensive medical needs, taking the money from companies that enroll healthier users.
The government also compels mechanisms to deal with prices. Within each canton, prices must be negotiated between associations of providers and insurers, and everybody must abide by them. So providers within a canton are paid equal amounts for equal services, regardless of which plan the patient has.
Finally, the state also enforces limited deductibles (about $300 U.S.) in all plans, and a maximum out-of-pocket cost of about $700.
Users can choose to purchase cheaper policies as a trade-off for higher deductibles (up to 2,500 Swiss francs, or about $2,500 U.S., for adults, and 600 francs, or about $600 U.S., for children). They can also choose policies with restricted provider networks, though few do.
As you can see, this looks nothing like “no government interference.”
Obamacare: A Reality Check
Nor does it look like a version of Obamacare. A few comparative points:
- Obamacare does not cover 100 percent of the population. In fact, more than 30 million people living in the U.S., the majority of them citizens or legal residents, will remain uninsured by 2024, according to the Congressional Budget Office.
- Obamacare does not guarantee a homogeneous, generous basic package of services.
- It does not guarantee equal prices for equal services—hence all these calls for greater transparency of prices so “consumers” can shop more productively! Prices vary according to age—older people pay up to three times as much—geographical location (over 18 different ones only in California!), even gender composition of the workforce insured.
- Providers under Obamacare are paid differently depending on the patient’s plan—which is unheard of, and would be scandalous, in Switzerland.
- Obamacare does not guarantee access to every provider in your state—only to providers in your plan, and only as long as your plan does not change.
- As to maximum out-of-pocket, we’re not even close to the Swiss.
- As to the celebrated choice of plans, it hardly applies to the 160 million Americans with employer-sponsored coverage (now 60 percent of the non-elderly population; it was close to 70 percent back in 2000), who are stuck with whatever “choices” their employers offer (assuming they offer any).
- Last and not least, insurers in the U.S. can and do make a profit for selling you insurance for medically necessary care. Which is the only reason they are in the business of selling insurance!
So the belief that Swiss health care and U.S. health care after the ACA are “more or less the same” is quite misguided.
At the center of the ACA is a well-oiled money-making machinery for the medical-industrial complex: insurance companies, Big Pharma, and for-profit (and many non-profit) medical establishments.
2) Over the last decade corporate interests have hijacked the Swiss system, despite the strong government oversight.
This has led to increasing overall and out-of-pocket costs, making the Swiss system the third most expensive in the world.
To control costs, the Swiss government has promoted managed-care options and encouraged users to comparison-shop. So in addition to the classic comprehensive plans, insurers are offering narrower provider networks and higher deductibles and co-pays, and users are prompted to choose plans annually.
However, the Swiss appear not to like all these “new choices” after all, because in a 2012 referendum more than 70 percent voted against a dramatic expansion of managed care, proposed as a key mechanism to “control costs and improve the system.” And only a very small minority chooses to change plans every year.
Last, a growing number find health care unaffordable and are failing to pay their premiums.
Simply put, all the problems the Swiss are grappling with are rooted in the for-profit nature of the companies that participate in the system. As these companies become more financially successful, and hence more powerful, they get harder to tame—and their influence on the politicians who decide health policies grows stronger and stronger.
Clearly, even in the best-case scenario—the highly regulated environment of Swiss private insurers—entrusting them with the provision of health care is assigning a fox to guard the henhouse. The attempt to achieve justice in health care via competing private insurers is a pipe dream.
3) The defeat of the single-payer referendum does not mean the Swiss people reject a government-run system and support private insurance.
The Swiss have rejected almost all referendums since 1891—only 20 out of 191 have succeeded, even when issues were popular.
Critically, one successful referendum was LaMal, the 1996 health insurance law that banned profit from the sale of medically necessary care. It also allowed the government to pass on money from companies spending less on patient care, to those spending more—certainly not an indicator that the Swiss shun “government interference” on behalf of ordinary people, nor that they trust private insurance to do well by them without supervision.
Also worth noting: in 2007 single payer was rejected by 71 percent, but the figure fell to 62 percent in 2014. Maybe the Swiss are beginning to cut through the anti-single-payer propaganda?
Why, then, was single payer defeated? What can we learn?
First, we need to grant that the state of Swiss health care may be of concern for the Swiss (they seem to have lower tolerance than we do!), but it is still not as bad as in the U.S. People who experience the greatest barriers to care in Switzerland are the most politically disenfranchised—the young, poor, women, immigrants, much like here—so the problem has yet to affect the so-called middle class enough to pass a referendum.
Second, we can see the extraordinary power of corporate propaganda. The scare tactics deployed by corporate interests in Switzerland were quite extraordinary, both in 2007 and this year. Likewise, their interpretation of the results was designed to discourage supporters of public health care—to make us think we’re more alone than we really are.
The Swiss referendum teaches us that:
- We need to sharpen our understanding of what the ACA is really about, who our enemies are, and what our alternatives could be.
- We must increase our outreach to the disenfranchised, to those who don’t think their voices make a difference.
- And we must work on improving our political education of those we wish to reach—rather than watering it down to sound bites that fit within the boundaries of the “politically feasible.”
Claudia Chaufan, MD, PhD, is an associate professor at the University of California San Francisco and a member of Single Payer Now and of Physicians for a National Health Program.