Aug. 21, 2014 SIGN IN | REGISTER

Obama, Congress: Take A Look at the Swiss Answer to Health Care

If Congress and the Obama administration aren’t too far down the road to big-government health care to rethink, they ought to read “Who Killed Health Care?” by Harvard business professor Regina Herzlinger.

Her answer to the title question of her book is the same as Agatha Christie’s in “Murder on the Orient Express.”

She writes that “everybody” — especially hospitals, employers, insurance companies, lawyers and government — created the current wasteful health system that, she argues, also kills people.

But even more compelling than her acid evaluation of what’s wrong is Herzlinger’s recommendation of the right alternative.

“Consumer-driven health care,” she insists, can be universal, efficient and end up costing less money than the current system — or any system being considered this year by Congress.

A consumer-driven health care system actually exists in Switzerland, which could be a model for the United States, but the administration and Congressional Democrats haven’t looked at it.

Switzerland has an individual mandate requiring everyone to be covered by private insurance. There is no employer-provided or government-managed coverage, and poor people are subsidized to help them buy insurance.

Switzerland has health care outcomes comparable to the most affluent U.S. states, while its health costs per capita are 40 percent lower than in the U.S.

Herzlinger’s proposal for the United States is that employees would receive in cash what their employers currently spend on health insurance premiums and it would be tax-free, provided they used the money for health care or insurance.

Employer-provided family health insurance now costs, on average, $17,000 a year. Uninsured people who are able to pay — about a quarter of all the uninsured — would be required to buy coverage.

Poorer people, including current Medicaid recipients, would get a government check to buy insurance based on their age, gender and location — but they could not be discriminated against on account of illness.

She acknowledges that the plan initially would be expensive — as much as $2 trillion over 10 years — but that competition among insurance companies and providers would bring costs down over time.

She told me she thinks that current plans being discussed in Congress will cost far more than current $1 trillion estimates and will not lower costs in the long run unless rationing is put into effect.

Herzlinger argues that consumer choice and good information would lead to an explosion of innovation in health care delivery, customizing care and reducing costs.

She predicts that “focused factories” would develop — specialized integrated treatment teams providing coordinated care for specific conditions like diabetes, AIDS or heart disease and that patients would choose the best based on published outcomes data.

Insurance companies also would bid for customers based on their needs and on cost. She said that Switzerland, with a population smaller than Virginia’s, has 84 separate health plans competing for business.

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