November 30, 2012

WE ARE ALL THIRD WAY NOW:

Why Republicans Should Back Universal Health Care (Regina Herzlinger,  APR 13 2009, Atlantic)

[R]epublicans could instead offer a consumer-controlled universal coverage system, like that in Switzerland, in which the people, not the government, control how much they spend on health. There are no government health insurance programs. Instead, the Swiss choose from about 85 private heath insurers. Rather than being stuffed into the degrading Medicaid program, the Swiss poor shop for health insurance like everyone else, using funds transferred to them by the government. The sick are not discriminated against either -- they pay the same prices as everyone else in their demographic category. Like the US, Switzerland is a confederation of states that, as in the US, oversee the insurance system. Enforcement by the tax authorities has produced 99 percent enrollment.

This consumer-driven, universal coverage system provides excellent health care for the sick, tops the world in consumer satisfaction, and costs 40 percent less, as a percentage of GDP, than the system in the US. The Swiss could spend even less by choosing cheaper, high deductible health insurance policies, but they have opted against doing so. Swiss consumers reward insurers that offer the best value for the money. These competitive pressures cause Swiss insurers to spend only about 5 percent on general and administrative expenses, as compared to 12-15 percent in the US. And unlike Medicare, the private Swiss firms must function without incurring massive unfunded liabilities. Competition has also pushed Swiss providers to be more efficient than those in the US. Yet they remain well-compensated. 

We can also learn from the mistakes made by the Swiss. For example, they pay providers for fragmented care, rather than for integrated treatments for diseases or disabilities. The Swiss sustain an inefficient hospital sector, and they aren't transparent about the cost and quality of providers. 

Republicans could enact Swiss-style universal coverage by enabling employees to cash out of their employer-sponsored health insurance. (Although many view employer-sponsored health insurance as a" free" benefit, it is money that would otherwise be paid as income.) The substantial sums involved would command attention and gratitude: a 2006 cash out would have yielded $12,000 -- the average cost of employer-sponsored health insurance -- thus raising the income of joint filers who earn less than $73,000 (90 percent of all filers) by at least 16 percent. Employees could remain in with an employer's plan or use this new income to buy their own health insurance. 
Posted by at November 30, 2012 5:02 AM
  
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