What the rest of the world can teach conservatives -- and all Americans -- about socialism, health care, and the path toward more affordable insurance

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Avik S. A. Roy

Yesterday, Pascal-Emmanuel Gobry posted a stimulating comparison between the American and French health-care systems. "From my outlook," he writes, "there's something that I haven't seen discussed and yet seems striking to me: how similar the French and U.S. healthcare systems are. On its face, this seems like a preposterous notion: whenever the two are mentioned together, it's to say that they're polar opposites."

Indeed, there are a lot of misconceptions about how America's health-care system compares to those of the other developed countries, including France. Both liberals and conservatives believe that the American system is a "free-market" or "capitalistic" one, and that European systems providing universal coverage are "socialized." In this article, I'll explain where both of these conceptions go wrong.




If anything, the U.S. figures understate government health spending, because they exclude the $300 billion a year we "spend" through the tax code by making the purchase of employer-sponsored health insurance tax-exempt.







But the pro-socialism argument has a glaring weakness: it ignores the two most significant examples of market-oriented universal coverage in the developed world, Switzerland and Singapore, where state health spending is far lower than it is in other industrialized nations. Neither Switzerland nor Singapore could be described as libertarian utopias--both systems contain aspects that conservatives wouldn't like--but they provide powerful examples of how market-oriented health care systems are more cost-efficient than socialized ones.

I've described Switzerland as having the world's best health-care system. In Switzerland, there are no government-run insurance plans, no "public options." Instead, the Swiss get subsidies, much like "premium support" proposals for Medicare reform or the PPACA exchanges, from which Swiss citizens buy health care from private insurers. The subsidies are scaled up or down based on income: poorer people get large subsidies; middle-income earners get small subsidies; upper-income earners get nothing.


The premium support system allows the Swiss to shop for their own insurance plans, which gives them the opportunity to shop for value--something that almost no Americans do. As a result, about half of the Swiss have consumer-driven health plans, combining high-deductible insurance with health savings accounts for routine expenditures.


The other important market-oriented counterexample is Singapore. Singapore has, arguably, the most market-oriented system in the world. Singapore's GDP per capita is about 20 percent higher than America's, with comparable (if not higher) health outcomes, and spends an absurdly low amount on health care relative to the West. How do they do it?

The key to the Singapore system is mandatory health savings accounts: again, something that libertarians and many conservatives wouldn't like. Matt Miller of the Center for American Progress describes Singapore as "further to the left and further to the right" than the American system--something that could also be said of Switzerland.





Singapore installed this system relatively recently. Prior to 1984, the former British colony had a system quite similar to that of Britain's National Health Service. In that year, the government reversed course, with impressive results. Singapore, of course, isn't a democracy--which allows the government to install sweeping changes that wouldn't be realistic here. (And in no way should my praise of Singapore's health-care system be interpreted as an endorsement of the country's political system.)





My message to conservatives is: wake up. America's health care system has many qualities, but it is far more socialized than you think, and we can learn from the experience of other countries to make it better. My message to liberals is: if universal coverage is your goal, the possibility for bipartisan compromise exists, if you're open to considering market-oriented approaches like those in Switzerland and Singapore. Let's put our heads together.

Follow Avik on Twitter at @aviksaroy.