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Comment by ffgjgf1 | Hacker News Reader

Some countries are fully private, like Switzerland and I think Netherlands.

Basic health insurance in Switzerland is “private” but very regulated:

All companies offer completely exchangeable plans and are only allowed to take age, municipality and desired copay into account when calculating your premium. Every resident of Switzerland is also obligated to have this basic health insurance (if you don’t, the government just picks a random insurance for you and signs you up retroactively).

I would say it’s a great system…but Swiss health care costs are also among the highest in the world (and rising steeply), so it’s not a silver bullet.

To be fair, this particular system is probably not to blame for the high costs, but it also didn’t prevent them (though it leads to a bit of innovation around e.g. telemedicine, which is great).

> but Swiss health care costs are also among the highest in the world (and rising steeply),

But relative to GDP Swiss healthcare spending is lower than in Germany or France. Adjusted by PPP they aren’t even that much higher in absolute terms than in most other richer European countries. Of course there are some outliers like Denmark but if we consider income levels and outcomes healthcare in Switzerland seems relatively “cheap”.

> But relative to GDP Swiss healthcare spending is lower than in Germany or France.

But, sure, healthcare is a mix of labor and materials like most things, and the labor cost should scale loosely with local GDP per capita, but to the extent tradeable the materials cost shouldn't and should follow the law of one price, so Switzerland, with almost twice Germany's per capita GDP (and more than twice France’s) should have lower healthcare costs as a share of GDP, all other things being equal, because for the same mix of goods and services, the per-GDP materials costs is naturally lower.

They'd have to be doing something really wrong [0] for that not to be the case.

[0] like the U.S. is

The high costs can be easily traced to the insurers lobby. See their late huge profits while at the same time raising the prices because muh costs... all passing basically unchallenged even at the recent elections - not even by the left parties. While it's better than in many other places in the world, still we should complain, if only for awareness.

Health insurer profit margins are 2% to 6% (objectively not huge). Their medical loss ratios are 85% to 90% (the proportion of their revenue that gets paid to healthcare providers).

Let’s suppose they are eliminated completely. You save 15% at most from not paying insurers, and let’s say doctors’ offices spend 10% on all the paperwork dealing with insurance.

However, government employees have to do some of the same jobs as the insurance company employees, such as identifying overcharges/fraudulent charges, etc. Add 10% back for that work (5% on government side, 5% on provider side since it should be less paperwork since it’s only 1 entity they are dealing with).

So all in, that is 15% savings, in an ideal case. With 90% medical loss ratios, it is 10% savings (more likely).

The Netherlands is an insurance health system, delivered by a mix of different types of organisations, private, non-profit, religious etc. The insurance market is very regulated and all residents have cover - it’s compulsory. If you are poor, your municipality makes sure you have an insurance policy. Most people get a window once a year to change plans and insurers, but the policies aren’t all that different (physiotherapy and alternative medicine options, as well as own-risk components seem to be where most of the difference lies).

This regulated market isn’t very “private” - and it’s not very capitalist either. Outcomes are ok, but as always could be better, which is at least as much cultural as how it’s all funded.

I survived a majorly serious illness during 2001 in the Netherlands. I am a type 1 diabetic and had a staff infection spread into both my lungs. I was on a ventilator for 17 days and spent around 30 days in the hospital total. The entire bill was under 20K Euros when EUR/USD was about even. The bill in the USA would have been insane but there they just did it for just costs. Any system would be better than here in the USA. From what I've heard the issue in Canada is they under spend and that creates logjams with the tech heavy things like MRI and elective surgeries.

Healthcare in Switzerland is among the most expensive in Europe.

Median income in Switzerland is also higher than anywhere else by quite a margin.

Relative to GDP the Switzerland spends less than Germany or France. Relatively to average net monthly salary healthcare is cheaper by about 30-40% or so compared to Germany.

The OECD paints a much less rosy picture. In their words:

  …higher levels of AIC correspond to higher price levels for hospitals
  as richer countries have generally higher price levels than poorer ones.
  The correlation is, however, not perfect: as an example, the hospital
  price level in Switzerland is twice the level observed in Germany, for
  comparable consumption levels.

https://www.oecd.org/health/health-systems/International-Com...

Edit:

I found it relatively difficult to make an apples to apples comparison as much of the details seem to only be available in French. However, nothing I saw put the Swiss rate of savings at 19%.

FT put the German rate at around 10% for 2018, and a source citing the BFS put the Swiss rate at over 12% for the same year (with a peak of 18.7% in 2020). So no, I don't buy that per-capita consumption is an inaccurate method here. Swiss health care is expensive even if you adjust for the overall wealth of the nation.

The data in that report is somewhat outdated because healthcare costs grew considerably faster in Germany since 2016 compared to Switzerland.

Also looking at PPP disposable income per capita and PPP healthcare spending the gap is much narrower (Germany still has lower costs but only by ~10% or so).

IMHO using per capita consumption seems a bit disingenuous because household savings rate in Switzerland is considerably higher than in Germany (19.3% vs 11.1%). So yeah while it’s accurate that the Swiss spend more on healthcare relative to the other goods and services they consume that largely makes sense because almost all healthcare services have to be ‘produced’ locally and can’t be imported.

Even with social transfers nominal disposable income is about 50% higher in Switzerland. So of course the Swiss will spend a smaller share of their income than the Germans to maintain comparable levels consumption just because a lot of the goods they buy cost more or less the same. The Swiss could consume more and save as little as the Germans and if they did so that would somehow decrease relative healthcare costs according to that report. That seems somewhat flawed?

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