Health Justice Now by Timothy Faust

Author:Timothy Faust
Language: eng
Format: epub
Publisher: Melville House
Published: 2019-08-05T16:00:00+00:00

ARBITRARY EUROPEAN COUNTRIES

You might hear that other countries have achieved universal healthcare without a single-payer model. This is accurate. But their models could not be transferred to the United States.

The healthcare exchanges of the ACA were modeled off those in the Netherlands and Switzerland, two countries who have achieved so-called “universal coverage.” Both countries rely on health insurance markets of individual plans offered by private insurers. To ensure enrollment, they have insurance mandates (punishments for not buying insurance) similar to the much-loathed ACA individual mandate. They provide premium subsidies for low-income folks, standardize benefits packages to ensure a minimum level of insurance plan quality, and use community ratings for premiums, meaning insurers in a given geographical region must sell a given policy to everyone, irrespective of health status, for the same premium. If this sounds familiar to you, it should—these are all the same tricks that the ACA employed in an effort to integrate good patient health outcomes into the ways and means of profit-hungry payers and providers. And as I’m sure you remember from Part 1 of this book, or perhaps your own life, it’s not working.

These European insurance markets are rooted in the ideas of economist Alain Enthoven and his principles of managed competition. In theory, by the magical regulatory power of the free market, competition among payers and providers would contain costs. Providers who offer poorer-quality services or who demand expensive prices will have to either improve care quality, reduce their rates, or both. The theory of managed competition takes for granted the idea that patients and payers will somehow have the ability to differentiate between higher- and lower-quality services. Knowledgeable consumers will choose to “shop” elsewhere, and providers that don’t cater to the demands of the free market will be forced to shutter their businesses.

But this idea, like the ideas of most economists, is based on pseudo-realities and wild presuppositions that don’t reflect reality as we all know it to be.*32 As the markets in Netherlands and Switzerland clearly indicate, competitive insurance markets alone are not enough to bend the cost curve.

In Switzerland, the hospital sector is the main driver of rising healthcare costs, most likely because their health reforms have focused solely on insurance purchasing. Because the Swiss have not regulated contracting between insurers and hospital providers, costs continue to spiral out of control as providers demand high prices for services that might be superfluous or of poor quality. Even in spite of its insurance market regulations, most Swiss insurance plans are woefully inadequate for enrollees. Almost 90 percent of Switzerland’s insured population is forced to purchase supplemental insurance on top of their main insurance plans to cover the dental and other services that their primary insurer refuses to provide.29 Supplemental plans, in both the Netherlands and Switzerland, need not abide by some of the most crucial consumer protections baked into their respective primary healthcare markets. These plans can, for example, reject applicants and engage in risk-rating to keep their costs down. The many different

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