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 Regulated competition in the health insurance market > 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 Regulated competition in the health insurance market > 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 Cost sharing > 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 Cost sharing > 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)

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 8

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 9