A Look At Conservative-Minded Market-Based Universal HealthCare Systems in Other Countries
We explore how conservatives can seek market-based universal healthcare by examining the market-based universal healthcare systems of Singapore and Switzerland.
An Introduction Market-Based Approaches to Universal HealthCare
Looking at all the healthcare system across the globe, we see that there are a number of different successful market-based approaches to universal healthcare coverage.
However, these usually come with a cost and stipulations, such as an Individual Mandate to purchase health insurance and/or an HSA like savings account so citizens can save for care.
In words, the ACA was one such solution in theory, but it was hardly the only one, and in practice (with obstruction and its own weight) it didn’t fully see success.
Lately, the conservative factions of politics talk consistently about using “market-based” approaches, but the legislation they put forth, like the AHCA, reveals that they are still missing the point of “seeking universal healthcare.”
The goal for conservatives seems to be to use “market principles” solely to benefit the wealthiest people and for-profit institutions (solely for economic ends), with the idea being that tax breaks and deregulation will cause lower prices to trickle down (supply side economics).
The key difference between the American conservative stance and other countries is that the other countries start with the idea of universal coverage and then build a conservative and principles market-based system from there.
In America we seem to be starting and ending with economics, and thus it is leaving these giant gaps which have all sorts of nasty causes and effects (the uncertainty of the citizens and the healthcare markets is hardly creating a free and open market, many have one choice of plan and no money to purchase care… that isn’t really Smith-style capitalism, it is more like cronyism, monopolies, and that hybrid mix was saw first with the ol’ V.O.C.).
There are countries that have amazing and universal healthcare systems based on “market principles,” but at the foundation of those systems is the goal of ensuring citizens access great healthcare and insurance.
The best versions of market-based universal healthcare systems all have relatively high amount of publicly funded financial assistance to mitigate costs.
A market-based approach requires subsidies be sufficient for all citizens to actually purchase insurance and the insurance industry must be regulated in way that prevents fraud and abuse of the tax-payer subsidized industry.
The US is the only major country in the world that allows for-profit health insurances administrate essential healthcare.
These elements are in conflict with most of the specific policy reforms being pushed by the Republican leadership who are still trying to reach a consensuses on the AHCA.
Whether one thinks two party politics is good or bad is not relevant to healthcare reform: the whole point of healthcare is for everyone to have coverage AND access to care.
We should be having critical discussions about the best path to universal healthcare and we have a plethora of systems to choose from. Instead many legislators are firm in their opinion that universal coverage shouldn’t even be an objective.
Think about what will happen to the network of healthcare providers if the local economy goes through a down turn and a segment of the population can no longer afford health insurance.
The number of providers available for every insurer to negotiate with will shrink to meet the reduced demand for care in the region as a whole. Access to insurance mitigates the cost of essential healthcare, but access to providers is essential as well.
No matter what system the US ends up using to achieve universal coverage and access, it would help a lot if our legislators could at least agree on the end goal being to actually achieve that.
If you want a market-based solution to achieve universal health care we have two significant examples to look at: Singapore and Switzerland. Both have had tremendous success with two different conservative approaches to universal coverage.
Spoiler alert: Despite being very unique approaches, Singapore and Switzerland both have a few things in common with all countries that have some for of universal coverage.
Singapore’s Universal HealthCare System
This video from Healthcare Triage discusses the key elements in Singapore’s unique system for providing universal healthcare coverage.
Singapore took a market-based (aka consumer driven) approach to public health insurance, but no service is ever completely free (though they have a safety-net program for the most needy citizens). The first part of their success comes from their application of a single-payer system where consumers have an active roll in controlling costs and a huge amount of provider choice. The public healthcare providers offer by far the best prices, but individuals are free to choose private providers. The tiers ensure that people can access the all healthcare providers at a level they can afford, but there are other unique features to Singapore’s program that address many other aspects of a person’s health and well being.
Single-Payer Lite – Tiered Cost Assistance & Fee for Service
Singapore has no for-profit insurers for essential health coverage. Instead everyone is covered under a single-payer style health insurance that allows both providers to choose the fee for services and funds a robust public healthcare network that usually offers better prices. The patient can choose between 5 classes of coverage (cost assistance) at the time of service. The lower the percentage of cost the patient chooses to be responsible for, the less creature comforts he’ll be get with his care.
If you choose the top level of care you’d get a private room and other amenities, but you’d be responsible for the costs (or have a supplemental insurance coverage). If you choose the lowest level with the most cost assistance, you’d be roomed with up to 7 others in a medical ward. The costs of services vary a lot, but people can access public and private providers of their choice. These out-of-pocket costs can add up, so the next feature of their program is also a key to the programs success.
Mandatory Payroll Savings
Medisave is one of Singapore’s many health and wellness related savings accounts that people employed in Singapore must pay into. Mandatory payroll savings amounted to 20% of payroll for employees and 16% of payroll from employers. The types of savings that employees can direct funds to relate to education, home ownership, investments, healthcare, elder care, and retirement. Medisave contributions requirement caps out at $43,500 and this savings account is used to cover the out-of-pocket costs of the healthcare system including supplemental health insurance. If all of that mandatory savings doesn’t cover all the care you need, then you are eligible to access another resource for out-of-pocket costs, but only if you are a citizen of Singapore.
It is important to note that this is one way in which Singapore has taken a rather unique approach to ensuring citizens are actually taking personal responsibility to save and invest. They have mandatory payroll savings that address a wide variety of social and public welfare issues from homelessness and unemployement all the way to the cost of a college degree and raising a family.
Medifund if the safety-net program that ensures that all citizens can access care at the lowest level even if they have no resources to pay the out-of-pocket costs. You are only eligible if you are a citizen and your other healthcare savings have been exhausted. Patients can still use public or private hospitals, but the public hospital system is locally managed and very responsive to public demand. The public hospitals make up the majority of health care facilities and the private hospitals are regulated to control costs and ensure that private hospitals are also addressing the needs of those who choose the lower tier of care.
This approach is single-payer system even if it doesn’t go so far as to eliminate all individual costs from healthcare. It is definitely one of the most successful approaches to universal healthcare while still maintaining much of the spending in the hands of individuals and emphasizing consumer choice. It has a strong supplemental private insurance market that reduces wait times for the public facilities. The public facilities ensure a stable public health network of non-profit locally managed providers, but it also embraces private competition for providing services at all levels of care. Most importantly, it recognizes the primary goal is to ensure access to insurance and healthcare for everyone at price they can afford.
Switzerland’s Universal HealthCare System
This video from Healthcare Triage discusses the key elements in Switzerland’s unique system for providing universal healthcare coverage.
Another approach to universal coverage that has been successful using a type of market-based approach is Switzerland. Oddly, it is much more like the Affordable Care Act then the American Health Care Act. All individuals in Switzerland are required to purchase health insurance (an Individual Mandate) and insurers are required to cover a minimal set of benefits under a non-profit structure. Insurers can profit from supplemental coverage. Premiums are subsidized subsidize based on income. So everyone participates in purchasing private non-profit health insurance that is subsidized in a single-payer fashion. People can choose between two deductible levels and they are also responsible for 10% of the costs of care after deductible which is also capped. Insurers are more highly regulated than the US insurers in many ways, but less regulated with regards to adjusting premium rates to accommodate those requirements.
These Successful Conservative Universal Coverage Models Conflict with Popular Conservative Ideology in the US
The similarities of these approaches are that they are truly universal and unified public health models that eliminate the for-profit role in healthcare administration for an essential set of benefits. Non-profit and unified for a specific purpose: to guarantee healthcare is accessible for everyone. Neither Singapore or Switzerland shy away from regulating the for-profit aspects of healthcare in general or being responsive in addressing their citizens concerns.
These features what make them successful, but those features are also at odds with the the ideology of a significant portion of our conservative legislators. Both of these models regulate the prices of healthcare and health insurance industries. Singapore has less regulations on the private industry by simply providing essential health benefits cost assistance through a single-payer system. Switzerland utilizes private insurance companies to administrate care, but highly regulates them and requires them to be non-profit for essential care coverage. Both mandate coverage to spread costs across the entire population. Singapore simply applies the public health insurance to all of it’s citizens while Switzerland mandates individuals purchase their own health insurance. They both eliminate for-profit health insurance industry from administrating essential care. They both use tax dollars to fund and subsidize the healthcare system in a unified way based on individuals needs.
While both of these models exemplify much of the rhetoric and language used by AHCA supporters, the AHCA as written would take no steps towards a universal healthcare objective and in fact, it would take several steps away from that. We do need to move forward with healthcare reform, but to do that we must have legislators who view universal healthcare is the objective. It’s fine to debate the best methods to achieving that, but we shouldn’t waiver on the objective.
The Predominant Conservative Legislators Approach is Doomed to Fail
The reason why everyone benefits when everyone can get the healthcare they need is a pretty basic when you think about how the different pieces of the market fit together.
Market-based are only as effective as the segments of the population with the financial ability to make a demand. Thus, if we start with the presumption that it is okay for people to not be able to be priced out of essential care, we must also accept that every aspect of our healthcare infrastructure will always be dictated by the whims of our economy as a whole and those problems will be amplified by a large wealth divide. If only a small percentage of wealthy people can afford health insurance, healthcare will be expensive and the network of providers will be very small.
Looking globally at cost effective and successful models for healthcare it quickly becomes clear that there are variety of approaches to achieving universal coverage and not all of them mean all healthcare is managed by the government or that the cost of all care is free. But they all do regulate health insurance and they all eliminate for-profit health insurance from essential care. They also all do provide enough tax-funded cost assistance so that everyone can actually afford healthcare and when needed insurance.
It’s clear with the language and discussions among conservative legislators around the American Health Care Act that ultimately their focus is on deregulation the health insurance industry as much as possible and to reduce the taxes on the nations wealthiest which were imposed by the Affordable Care Act. The only way to accomplish the tax breaks is to reduce the cost assistance (in the form of Medicaid expansion, PTC, and CSR), but that moves our healthcare system away from publicly funded/subsidized healthcare access. It will also never achieve a robust financially stable provider network. This ultimately leads to less choice of actual providers for everyone, even those who manage to afford health insurance.
In truth, there is no real discussion at the national level about rational conservative approaches to universal healthcare. Those who would be the conservative voices at the table aren’t even trying to acheive the same objective. The best way to ensure a plethora of providers is to ensure that every citizen has the ability to actually demand essential services when they need them. Even if it has a cost, the cost can’t be so high that actual health needs are ignored, including primary and preventative care. If the plan is not built on a foundation principle that the point IS to ensure all citizens have essential care coverage and that means eliminating the for-profit motive from the administration (health insurance) of essential health needs. This is true every example of universal healthcare around the world.