Members of Swiss insurance plans living in the Basel region will be able to go to Germany to get their care, under a pilot program announced by the Swiss government. For those unfamiliar w the health systems in the two countries, both have mandatory coverage through licensed insurers and mostly private providers. Recent changes in German laws have enabled primary care and some other providers to more fully compete for patients.
The driver behind the new program is, you guessed it, cost containment. The Swiss are faced with cost increases of (gasp) 5.6 percent this year, and are desparate for solutions to this crisis. In addition to the cross-border care, the Swiss are also negotiating for lower rates on prescription drugs (what an innovative idea!) and further encouraging the use of generics.
The consensus is that there is an oversupply of physicians in private practice in Germany, thus they may be less expensive than their Swiss cousins.
Now here’s the interesting part. The Swiss health care budget is about 11.1% of GDP; the German budget is 10.7%. (Pikers, you say, we Americans are over 16%! ) I find it kind of morbidly fascinating that Swiss health care planners think they may actually save a few francs by sending patients across the border, into a country with a demonstrably “sick” health care system, one that has not done any better job of delivering quality care at a low cost.
Now if they were going to send their patients to India, now they might be getting somewhere.
In fact, that’s not a bad idea for some budding young insurance Entray-pra-noor here in the US of A. And I’m only half joking.

UPDATE – One of the most thoughtful, well-written, and best pieces on what health insurance is, what it ought to be, and the different philosophies about same was written by Malcolm Gladwell of The New Yorker last year and subsequently posted by Marc Kashinsky.
Matt Holt posted a review/commentary/expansion on the Gladwell piece, once again demonstrating he knows his stuff.
Mr. Gladwell delves into the depths of ‘moral hazard’ and its role in the Bush Administration’s health care policy thinking, as well as its impact on individual decisions about care.
Re the latter, here is one of the more striking passages.
“Sered and Fernandopulle tell the story of Steve, a factory worker from northern Idaho, with a “grotesquelooking left hand–what looks like a bone sticks out the side.” When he was younger, he broke his hand. “The doctor wanted to operate on it,” he recalls. “And because I didn’t have insurance, well, I was like ‘I ain’t gonna have it operated on.’ The doctor said, ‘Well, I can wrap it for you with an Ace bandage.’ I said, ‘Ahh, let’s do that, then.’ ” Steve uses less health care than he would if he had insurance, but that’s not because he has defeated the scourge of moral hazard. It’s because instead of getting a broken bone fixed he put a bandage on it.”
Print it, stick it in your “to be read” file, and absolutely read it.

If consumerism is going to help reduce health care cost inflation, we’ll need two things – information and appropriate financial incentives. Actually, we’ll need another ‘thing’ – consumers will need the intelligence and expertise to be able to make the correct decisions when (or more likely if) reviewing information about conditions, procedures, outcomes, costs, side effects, providers, facilities, and alternatives. That’s a tough one…but I digress.
So far, the information has been sorely lacking, in part because it’s just so massive it’s hard to put it together, in part because the Feds won’t give out any data on the largest payer on the planet, Medicare, and in part because providers are really really reluctant to sign on to anything that might reveal they aren’t individually perfect.
OK, so we’re not quite there yet in the information department. What about financial incentives? We’re a lot further along there, aren’t we? Well, aren’t we?
Nope. For two reasons.

Continue reading The two reasons consumerism won’t solve the health care cost problem

The report authored by the Center for the Study of Health Systems Change on the impact of demographics on inpatient hospital demand (discussed here earlier) is revealing on several levels: technology v demographics; shifts in utilization by type of procedure, and the impact of an aging population on inpatient v outpatient care.
One of the key takeaways is the note that local demographics can be quite different from national trends, and can actually counteract them entirely. For example, Phoenix is growing so rapidly, and has such a youthful demographic profile (about 10% of the population is over 65) that health care planners may as well ignore the national statistics as their population is significantly different.
At the other end of the spectrum is Syracuse NY, where a stagnant-to-declining population coupled with little influx of younger residents has resulted in a population bulge in the over-65 group (over 16% of the population is over 65, compared to a US average of 12.4%).
While local health care planners and politicians (well, maybe not politicians…) are well aware of these differences, those of us interested in national health care policy and planning would do well to remember that all health care is local, and the needs of individuals and areas trump national trends.