Lessons From Abroad: Mandatory Insurance Creates Powerful Health Plan Cartels
I attended a conference entitled, “Lessons From Abroad for Health Reform in the U.S.” at the Kaiser Family Foundation on March 9th in Washington DC. The event was sponsored by the Galen Institute and the International Policy Network, both of whom are politically rightward-leaning non-profit organizations.
I wasn’t sure what to expect from the conference, and assumed that speakers would offer a blend of pluses and minuses culled from Canadian and European healthcare reform experiences. I have to say that the pluses were hard to come by – and that the minuses were so provocative that I have decided to repeat them here for you, and let you make what you will of them.
Switzerland – Lessons About Insurance Mandates
Dr. Alphonse Crespo, an orthopedic surgeon who practices in Lausanne, Switzerland, described what sounded like the utter decimation of a perfectly good healthcare system. He said that in the 1960s Swiss healthcare was decentralized and quality-oriented. The government provided subsidies for health insurance for the poor, and subsidized public hospitals who took care of the poor and/or uninsured at a 50% rate. Overall, according to Dr. Crespo, Swiss healthcare was efficient, effective, and had high patient satisfaction ratings.
In 1994, socialism came into vogue and reformers called for a redistributive model of healthcare, with centralization of infrastructure and electronic medical records systems that would be compatible with those in use by other European countries. Mandatory insurance was introduced, which shifted disproportionate power to third party payors. The payors focused primarily on cost containment measures and profitability, rather than expanding access to quality care. Regional hospitals were forced to merge with larger ones or else shut down. Wait times increased, lengths of stay decreased, and there was an increase in “critical incidents” (i.e. medical errors) by 40%.
In 2002 the health insurers decided that “more doctors result in higher costs” and successfully lobbied for a cap on the total number of physician licenses, so that in order to practice medicine, a physician would need to take over the practice of a retiring physician or one who died.
In 2008, the third party payors attempted to legislate their ability to decide which physicians could practice within the healthcare system, and which would be excluded from coverage. This did not sit well with patients, and they voted for “freedom of choice” in a referendum on the issue. Fortunately, they blocked the insurer move to ban certain physicians from insurance coverage. Unfortunately, the insurers succeeded in forcing a reduction in reimbursement for basic laboratory testing by 20%, thus forcing physicians to close their labs and send samples to a centralized location. Apparently physicians are planning to strike in Lausanne and Bern next week over this issue.
Dr. Crespo argued that the unforeseen consequence of the move to compulsory insurance was the emergence of a powerful cartel of health insurers without any apparent cost savings, and a measurable decrease in care quality. In fact, Switzerland’s healthcare system rapidly plummeted from 4th place in the Euro Health Consumer Index, to 8th place over the course of a few short years.
He concludes:
“Once cartels have entrenched themselves, there is no easy way to dislodge them. Americans should think twice before opting for compulsory insurance, unless they believe that cartelized and rationed healthcare is really in the best interest of patients.”
**You may view materials from Dr. Crespo’s lecture here.**
In my next post I’ll review what the Canadians had to say about their healthcare system.
All the more reason to include a public plan option to compete against the private insurers.
And, I might add, all the more reason to take “rightward-leaning” advocacy groups' propaganda with a grain of salt and a healthy dose of skepticism.
All the more reason to include a public plan option to compete against the private insurers.
And, I might add, all the more reason to take “rightward-leaning” advocacy groups' propaganda with a grain of salt and a healthy dose of skepticism.
This is so interesting. And frightening. For every action, there are unforseen reactions. Hope Obama and his advisors are talking to folks like this.
Val, calling Galen “rightward leaning” is like calling me slightly irritating or you quiet and demure. This type of BS is all about preserving the incomes of those who make a mint of health care here, and has nothing to do with figuring out what to do about Switzerland, Canada or anywhere else