EXPLAINED: Why are Swiss health insurance premiums set to rise?
In 2023, premiums on Switzerland’s compulsory health insurance are expected to increase by 10 percent on average — the sharpest hike in the past 20 years.
Unlike other recent increases in the cost of living, the more expensive healthcare system can’t be blamed on the war in Ukraine or the higher inflation rate.
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?
The newest and ever-changing technology — the latest medical equipment and treatments that Swiss patients have come to expect — isn’t cheap.
But that is only a small part of soaring costs.
An important reason is 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, however, 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, in 2023.
But there are other reasons as well.
As The Local reported in May, “Some doctors and hospitals in Switzerland overcharge their patients by either invoicing services that have not been provided or billing more than is necessary".
READ MORE: Why Swiss health premiums are set to rise — and what you can do about it
Whether they do it intentionally or by mistake, the fact remains that without these additional charges, healthcare premiums in Switzerland could be 10 percent cheaper, according to country’s healthcare insurers.
Matthias Müller, spokesperson for health insurance umbrella organisation Santésuisse, confirmed that certain doctors charge too much.
“We see this problem particularly in the outpatient care, where doctors can choose from numerous tariff positions”, he said.
Who determines premium amounts each year?
Even though health insurance is offered by private carriers rather than the government, they can’t unilaterally set their own rates for the compulsory basic insurance (though they can do so on supplemental policies).
These rates are subject to approval by the Federal Office of Public Health (FOPH).
The Health Ministry also acts as the consumers’ advocate; it supervises insurers’ finances, budgets, and annual reports.
Therefore, each increase in premiums must be fully justified.
What is the government doing to curb the costs of healthcare?
In September, the Federal Council proposed a package of measures (which must now be approved by the parliament) ,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”.
READ MORE: EXPLAINED: How Switzerland wants to cut soaring healthcare costs
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Unlike other recent increases in the cost of living, the more expensive healthcare system can’t be blamed on the war in Ukraine or the higher inflation rate.
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?
The newest and ever-changing technology — the latest medical equipment and treatments that Swiss patients have come to expect — isn’t cheap.
But that is only a small part of soaring costs.
An important reason is 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, however, 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, in 2023.
But there are other reasons as well.
As The Local reported in May, “Some doctors and hospitals in Switzerland overcharge their patients by either invoicing services that have not been provided or billing more than is necessary".
READ MORE: Why Swiss health premiums are set to rise — and what you can do about it
Whether they do it intentionally or by mistake, the fact remains that without these additional charges, healthcare premiums in Switzerland could be 10 percent cheaper, according to country’s healthcare insurers.
Matthias Müller, spokesperson for health insurance umbrella organisation Santésuisse, confirmed that certain doctors charge too much.
“We see this problem particularly in the outpatient care, where doctors can choose from numerous tariff positions”, he said.
Who determines premium amounts each year?
Even though health insurance is offered by private carriers rather than the government, they can’t unilaterally set their own rates for the compulsory basic insurance (though they can do so on supplemental policies).
These rates are subject to approval by the Federal Office of Public Health (FOPH).
The Health Ministry also acts as the consumers’ advocate; it supervises insurers’ finances, budgets, and annual reports.
Therefore, each increase in premiums must be fully justified.
What is the government doing to curb the costs of healthcare?
In September, the Federal Council proposed a package of measures (which must now be approved by the parliament) ,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”.
READ MORE: EXPLAINED: How Switzerland wants to cut soaring healthcare costs
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