The Swiss Health Care System

1. The Swiss Health Care System Robert E. Leu University of Bern November 2008

2. The Swiss system in a nutshell • Highly decentralized (26 cantons/states) • Federal government acts mainly as regulator (Federal Health Insurance Law) and supervisor • Cantons are responsible for the provision of medical care • High physician and bed density with large regional variation • Wide availability of up-to-date medical services in high quality

3. The Swiss system in a nutshell • Good performance with respect to outcome indicators (life expectancy, etc.) • Good performance with respect to equity criteria (health and health care utilization by income) • High patient satisfaction • Relatively high overall cost

4. Regulatedcompetition in thehealthinsurancemarket • Health insurance as individual mandate, independent of employment • Universal coverage for all residents (# of uninsured < 1‰). • Comprehensive benefit package • Free choice between insurance companies and contract options • Free choice of physician and direct access to specialists in canton of residence (except for managed care plans) • Free choice of hospital (with regulatory limits)

5. Regulatedcompetition in thehealthinsurancemarket • Competing, predominantly private not-for-profit insurance companies • Open enrollment subject to timing rules • Community rated premiums • Insurers set premiums to cover costs; tight control by the Swiss Federal Office of Health • Premium subsidies for lower income families • Risk equalization scheme

6. Costsharing • Variable deductible ($ 272, $ 454, $ 907, $ 1361, $ 1815, $ 2269) with corresponding premium reduction ($ 145 to $ 1597) • Coinsurance rate of 10%, after insurance kicks in, up to stop loss amount of $ 600 • Coinsurance rate for original drugs 20% if generics are available and physician does not insist on original drug • Coinsurance is replaced by a fixed amount of $ 9 per day for inpatient care • Managed care plans may offer contracts without cost sharing

7. Costsharing • Available studies indicate that higher deductibles reduce utilization (moral hazard) by between 15% and 50% • Self-selection accounts for 50% to 85% (deductible can be changed every year)

8. Main Problems • Governance (fragmentation of responsibilities, multifunctional role of cantons) • Inefficient regulation (limited selective contracting, etc.) • Cantons too small as health regions • Quality monitoring on national level (benchmarking) • Incentives for disease management

9. Lessons for other countries • Regulated competition in health insurance • Health insurance as individual mandate • Achieving high insurance coverage • Cost sharing with no negative effect on access • Premium subsidies • Decentralized approach: advantages and disadvantages