How spiralling costs are jeopardising Switzerland's healthcare system
Switzerland has one of the costliest healthcare systems in the world, and most of the participants in this lavish system, including the public, have an ingrained tendency to spend too much. Clare O’Dea warns that rising costs are jeopardising the whole system.
The Swiss healthcare system is a runaway train. It may be a well-staffed beautiful train with comfortable seating and a nice quiet engine but it’s still out of control. And Swiss households are left to pick up the bill, paying around 60 per cent of the total cost through their premiums and out-of-pocket expenses.
Over the past 20 years, costs have risen at twice the rate of economic growth, resulting in health insurance premiums that are 90 per cent higher than 2002. According to a recent study by the Boston Consulting Group (BCG), if we continue on the current course, health costs will more than double by 2040.
The total per capita spend on health in 2020 was CHF 9,648 and that year the burden on the individual was 64 per cent. Although patients would benefit the most financially from trimming, we can’t seem to stop ourselves from splurging on health. In the medium term, this trend could end up limiting access to healthcare.
Under Swiss law, every Swiss resident must purchase a health insurance policy that covers a defined basic package of health needs. There is a range of non-profit health insurers to choose from. The system attempts to be equitable, but the Federal Office of Public Health admits there are “unequal health opportunities depending on socio-economic status”.
The Centre party, currently campaigning for a referendum for lower premiums, has raised the alarm that the government may be forced to reduce what is covered by the basic universal package if other measures don’t work. That would mean the introduction of a two-tier system as is found in many other countries with a public-private mix of coverage.
Rather than wait until we get to the point that the general public has to take the hit, how can the more influential players – hospitals, doctors, pharmacies, manufacturers – change their systems and practices to save money? And who will force that change upon them?
With a sharp rise in premiums expected for 2023, there is an effort across the political spectrum and within the sector to come up with ideas but a lack of consensus and focus means nothing much happens. It looks like Switzerland needs a health tsar to push through some meaningful long-term reforms.
Some of the current political ideas are short term in nature, more about redistributing the costs rather than controlling them. The Swiss People’s Party wants to make health premiums fully tax deductible. The Social Democrats also have an initiative going through the works seeking to place a cap on premiums of 10 per cent of income.
Healthcare, life-saving and life enhancing, is not like any other service. It is perceived as essential, and the more money and access you have, the more essential it seems to become. It is also constantly expanding thanks to scientific and technological progress. This combination of expanding demand and availability pushes costs only one way.
Apart from the obvious drivers of high spending on health – economic growth and the ageing population, lack of oversight plays a significant role. It is difficult to look over the shoulder of the provider as they write their bill or make a medical decision. More transparency is needed.
Swiss health insurers recently confirmed that patients in Switzerland are charged three billion more than they should be each year by doctors and hospitals. Three billion out of an annual cost of CHF 83 billion (2020) is significant.
Even worse is the problem of overtreatment. According to a recent Federal Office of Public Health survey, the more lucrative patients who have supplementary insurance for private care had a higher frequency of operations. In its arguments for cutting costs, the Centre party claims that 16,000 unnecessary meniscus operations are carried out in Switzerland every year where no injury is present.
According to analysis carried out by the insurer Sympany, there are also too many inefficiencies in the Swiss system. One example is having too many expensive machines that are underutilised.
MRI machines cost CHF 700,000 to 2.5 million plus maintenance and Switzerland has 25 machines in its hospitals per million population, the third highest rate in the OECD after Finland and Korea.
Surprisingly in a country famed for innovation, digital technology is not being used to its full potential. Switzerland is lagging behind many of its neighbours in terms of healthcare digitisation despite fulfilling many of the requirements for this transition.
A new study by ETH Zurich professors Elgar Fleisch and Florian von Wangenheim describes how the Swiss healthcare system could have saved over eight billion francs in 2019 by exploiting currently available digital technologies. Technological and digital transformation is one of the main priorities identified in the government’s health strategy for 2030 so there is some hope there.
On an individual level there is more that we can do. Prevention doesn’t just mean funding public health campaigns. Each person can do their bit to adopt a healthier diet and lifestyle.
Some things cannot be changed, like the fact that people in Switzerland have a high life expectancy but suffer from chronic, care-intensive diseases at the end of life. But the quest to curb spiralling costs must be pursued as fairly as possible, ideally distributing the pain across all players who make money in the system. It’s not that the problem is too big to fix, it’s too big not to fix.