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HEALTH

EXPLAINED: How Switzerland wants to cut soaring healthcare costs

Swiss health costs have been rising in recent years, with further spikes, including in insurance premiums, seen as inevitable. The government is proposing measures to counter this upward trend.

Published: 8 September 2022 11:45 CEST
EXPLAINED: How Switzerland wants to cut soaring healthcare costs
Switzerland wants o implement coordinated medical networks to save costs. Photo: Rodnae Productions on Pexels

Based on the information released by Santésuisse, an umbrella group for health insurance companies, an overall increase of around 4 percent for 2023 will be the norm.

Unfortunately for the consumers, who are already hard-hit by rising energy costs, premiums for compulsory health insurance will likely rise by an average of 5 percent in the fall, according to online price comparison site, Comparis.

And many people could even see their premiums soar by more than 10 percent in 2023 — the sharpest hike in premiums in 20 years.

The exact amounts of premiums for all policyholders will be released by the end of October.

The price hikes are not a new phenomenon per se: over the past 20 years, costs have risen at twice the rate of economic growth, resulting in health insurance premiums that are 90 percent higher than in 2002.

READ MORE: How spiralling costs are jeopardising Switzerland’s healthcare system

Why have these costs been increasing so much?

Part of the reason is the fact that people in Switzerland have a high life expectancy, but as they get older, they tend to suffer from chronic, cost-intensive diseases.

The more recent hikes can be attributed to higher medical costs incurred during the two years of coronavirus pandemic, estimated to cost insurers over one billion francs so far, not even taking into account about 265 million spent for Covid vaccinations in 2021.

Add to that the cost (paid for by the government) of Covid tests, as well as booster shots administered in 2022, and those still to be given once Switzerland rolls out second doses in 2023.

How will the government cut these costs?

Santésuisse has been urging the Federal Council to implement a range of reforms to reduce costs and ensure that not so many are passed on to consumers. 

On Wednesday, authorities announced a package of measures aimed at controlling costs. “These measures will improve medical care and contain rising costs in the healthcare system”, the Federal Council said.

Coordinated networks

These care networks are seen as a way to reduce unnecessary medical services. 

“They bring together health professionals from several disciplines to provide ‘all-in-one’ medical care. They improve coordination throughout the treatment chain, for example when various specialists are caring for an elderly person with several chronic diseases”, Federal Council said in a statement.

Hospitals, pharmacies, and various therapists would be attached to the network, and all treatments “will be invoiced at once, as if it were a single supplier”.

Right now, all service providers invoice insurance carriers separately, which adds to administrative costs; the new system is also believed to provide a better oversight and control, and eliminate unnecessary or redundant medical treatments, Health Minister Alain Berset said during a press conference in Bern on Wednesday.

Faster and cheaper access to medicines

The government also wants to guarantee “fast and as inexpensive as possible access to expensive innovative medicines”.

To achieve this, it wants to “anchor in the law” an already widely-used practice: to conclude pricing agreements with pharmaceutical companies. It would mean that drug manufacturers would have to reimburse a portion of the price to insurers.

“This measure makes it possible to guarantee rapid access to these drugs, while limiting their price”, authorities said.

Electronic invoicing

Another measure will require all providers of inpatient and outpatient services to send their invoices to insurance companies in electronic form — seen as a quicker, more effective and cheaper way to transmit billing information.

These measures “will make it possible to curb the rise in costs,” the Federal Council said, adding that “it is not yet possible to estimate the concrete extent of these savings, which would depend on how the health system will implement the measures”.

It is now up to the MPs to debate these proposals.

READ MORE: Why Swiss health premiums are set to rise — and what you can do about it

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HEALTH INSURANCE

How Switzerland’s political parties want to curb surge in health costs

As voters in Switzerland are set to weigh in on two initiatives seeking to lower insurance premiums, the country’s politicians are proposing their own cost-cutting measures.

Published: 3 May 2024 13:02 CEST
How Switzerland's political parties want to curb surge in health costs

On June 9th, the Swiss will cast their votes on two issues aiming, though in different ways, to curb the continually increasing cost of the obligatory health insurance (KVG / LaMal).

One calls for capping the insurance rates at 10 percent of income, while the other provides for a ‘brake’ on health costs, which should evolve according to the economy and wages.

READ ALSO: How Switzerland’s two crucial health insurance referendums could impact you 

Each initiative has its supporters and opponents, but regardless of what happens on June 9th, the issue of health insurance premiums, and health costs in general, will remain the focus of many political debates.

But while everyone in Switzerland agrees that health insurance is too expensive for most people, opinions on how to make it more affordable  differ along the political lines.

These are some of the main views, as reported by Swiss media.

Social Democrats 

The party that has spearheaded the ’10-percent of income’ initiative to be voted on June 9th, is also calling for scrapping of multiple private carriers  in favour of a single, government-run health fund.

The party argues that such a system would help keep the costs low.

Others, however, disagree, saying that lack of competition would have just the opposite effect: instead of reducing costs, it would increase them further.

They also point out that a private insurance system offers more choices  and provides a higher quality of services — including better access to specialists and shorter wait times for medical procedures —  than a public option.

READ ALSO: Could Switzerland ever change to state-run health insurance scheme? 

The Greens

The party has also spoken in favour of a single health provider, in addition to premiums based on income and wealth.

While the idea has gained support in some circles, others, including the Federal Council, have pointed out that the current system is “already income-based,” because low-earners are eligible for government subsidies if health insurance premiums exceed 8 percent of their revenue. 

The Greens also consider the fight against global warming as a health policy, saying that in Switzerland alone, more than 2,000 people die each year from diseases caused by air pollution.

Liberal-Radicals (PLR)

The party supports the system where patients voluntarily choose generic rather than brand-name drugs in return for lower health insurance premiums.

Under the current scheme, those who choose generics are only responsible for a 10-percent co-pay, while it is 40 percent for brand medicines. 

But “if policyholders can actually choose the model they want, we can definitely consider [this option],” said health economist Willy Oggier.

Swiss People’s Party (SVP)

Perhaps the most radical proposal comes from the party that is most right-wing.

Its proposal: the compulsory health insurance must be abolished altogether.

Not only is this idea drastic, but it is not implementable under the current law.

That’s because the current legislation is the outcome of the 1994 referendum, when voters accepted a general obligation for health insurance.

To repeal it, another referendum would have to be held, with the majority voting to scrap this law.

But even if the compulsory insurance were to be abolished, people would have to pay even more for health care, Oggier said.
 

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