If you are living in Switzerland you will be part of a Canton or a Gemeinde, they call it, which means a commune and is the smallest administrative division of local government having corporate status and powers of self-government. This looks on paper similar to the municipality in any other country but with a huge difference.
The income tax that you pay goes to this Canton or Gemeinde, so these are for all practical purpose the only arm of government that you will ever have recourse to. They are rich but they are run by the people of the Canton.
If the community wants a park instead of a road, the people of the Canton must decide by majority voting. How many schools and hospitals must be there in the Canton will be decided by the Canton.
Even how many doctors and plumbers should be there in the Canton is decided by them.
It may seem odd that the number of doctors and plumbers are the least; they seem to be in short supply not because there are really very few doctors or plumbers available but because the demand for doctors and plumbers is relatively low as well. For price of a service to be what can be termed as fair, there is a need to modulate supply. Modulation and moderation is best executed in Switzerland.
If you visit any hospital in any Canton, you will find large facilities, very clean and aesthetically built. But very few patients you can find in them. The patients are mostly those who are very old or some who could be terminally ill.
The Emergency ward is the most empty of all wards as emergency medical care is far less the need of the hour than planned health care.
The economics of health care is better understood in Switzerland than any other country by delving deep into the concept of ‘Moral Hazard’.
It is easy to understand, if you have taken car insurance for theft, you will take little care of your car for theft reasons. Similarly if you have ensured yourself fully for healthcare, you will not take care of your health.
The solution to this puzzle is as much embedded in economics as in socio-political framework of the economy. But forcing people to understand about health care has to start with the society’s understanding of what constitutes basic health conditions.
If you are going to eat healthy food and taking a moderate doze of exercise, you will probably be far better off in terms of your basic health conditions. Once that is done, the next step would be to build on that in areas of deficiencies like a person with high sugar would need a particular type of regimen as a preemptive step or someone with weak lungs or heart condition would need additional preparation.
Preparing throughout the life for a better health condition needs more than just the individual effort; it needs collective wisdom of the society to be aligned to this.
Think of a country which makes unhealthy food the main staple and makes it abundantly available and at low prices. The basic health of that country will definitely deteriorate. In such a country you will see that healthy food is very expensive while the food in the category of high carb, high fat or high sugar will be rather cheap.
Here clearly the cheap food is getting subsidized at the cost of health. Most advanced countries have struck a balance, in fact in some unhealthy food is not easily available.
So much of debate happens on health care but very little is spent on the subject of unhealthy food.
Making health care free would not solve any problem unless this is sorted out. But more importantly free health care will only increase moral hazard by influencing people to take on more of the unhealthy stuff which could be very appealing in taste but bad for the body.
The Swiss have solved this by firstly making the populace responsible for their own health. The first part payment for every hospitalization up to a percentage has to be borne by the patient herself. This simple action makes everyone responsible and reduces moral hazard.
The second is that for every ailment there is a generally accepted rate for treatment by the doctor or the specialist or by the hospital. There can only be very exclusive rates for the very rich, but the rest have one single pricing system.
Competition laws in health care is strong and awareness is all pervasive; there is no way that there can be pricing left to the whims and fancies of the hospital or doctor.
The price for a service, when it is not too far-fetched from the marginal cost, it only means that there are controls in place for making healthcare not be the paradise for agents seeking to profit at the cost of the customer, which in this case is the patient.
The economics is so simple, for every insured in health care the more the awareness for health the more the chance of the overall cost of healthcare coming down leading to lower premium.
On the other hand the more the controls, the better are the chances that the price of service is in line with the quality of service and not on other extraneous factors.
The Swiss have done both, they have made the populace more aware, they have influenced them positively to healthy food and a regime for healthy exercises, while making the service part less expensive as well.
You cannot do one without the other, so the Cantons have a vital role to play in ensuring that both sides of the equation are balanced.
Many countries are struggling to balance these while much of the debate in the public domain is about reducing cost and improving service. No wonder the Swiss spend 12% of GDP on healthcare whereas U.S. spends 17%.
Generous healthcare is good but who will pay for it finally is the question. Nothing is free.