Opportunity for health reform: Lessons from Switzerland
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Mark Rovere and Bacchus Barua
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ince 2004/05, the year in which it announced its 10-Year Plan to Strengthen Health Care, the federal government has transferred $154.4 billion in cash transfers for health spending to the provinces—$6.4 billion beyond that necessary to keep pace with population growth and inflation (Esmail et al., 2012). Critically, this funding has not resulted in significant improvements in access to health care. For example wait times have not decreased (Barua et al., 2011) and many Canadians do not have access to a regular family physician (Statistics Canada, 2012). At the same time, nearly all provinces are facing unsustainable growth in government health expenditures (Skinner and Rovere, 2011). Finally, in comparison to other OECD countries, Canadians are not getting good value for money from their health insurance (Rovere and Skinner, 2012). The status quo or the “Canadian way” is clearly not working. It’s time to look to other countries for alternative ways of achieving universal health care with superior results for patients. This article is the first of a series that will explore how other developed countries, Switzerland in this case, achieve universal health care by promoting patient choice, provider competition, and market incentives; many of the restrictions that currently impede sensible reforms from taking place in Canada.
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Fraser Forum July/August 2012
Spending and health care financing In 2009 (the most recent data available), Switzerland was tied with Canada as the sixth most expensive health care system in the OECD. It spent 11.4 percent of its gross domestic product [GDP] on health care, as did Canada (OECD, 2011). When the age1 of the population is taken into account (based on 30 OECD countries), Switzerland spends 10.3 percent of its GDP on health care (ranking the tenth most expensive), while Canada spends 12.0 percent (ranking second most expensive) (OECD, 2011; calculation by authors). The Swiss have a universal health care system, as does Canada. However, instead of relying on government health insurance monopolies to purchase medically necessary services as Canadians do, the Swiss purchase their health insurance in a competitive private market. After being approved by a national referendum in 1994, the Swiss Federal Law on Compulsory Health Care (LAMal) was implemented in 1996 (Frank and Lamiraud, 2008). Under this model, residents must2 purchase basic insurance packages from one of a number of nonprofit insurers (public and private), who compete with each other in a regulated competitive market. Individuals and families who cannot afford to purchase private insurance receive government subsidies to finance their basic health insurance premiums.3 Thus, contrary to what many advocates of single-payer health insurance www.fraserinstitute.org