Healthcare referendum rejected: Switzerland will not change their private insurance company system to a single national insurance provider

To obtain healthcare insurance in Switzerland is obligatory by law. Switzerland has 61 private health insurance companies that serve as the public health insurer, and who compete on the market for clients. The insurance companies are regulated as such, that they must offer the same basic insurance packages in terms of content; however the prices of monthly premiums vary across the nation.

Premium rates depend on the Canton of residence, the insurance company, the chosen deductible, and whether or not the selected package is a basic or a Managed Care model. Insured clients are entitled to change insurance provider up to twice a year.

The “For a Public Health insurance” referendum

In September 2014, a referendum “For a Public Health insurance” was presented, suggesting to restrict all the private insurance providers to only offering supplementary insurance, and to replace the current system with a single national public insurance provider.

The new public insurance scheme would be managed by a national institution and regulated by public law. This system would grant the decision-power regarding premium prices to cantonal and intercantonal agencies, and make them responsible for premium collection and medical reimbursements.

From the beginning, the Federal Swiss Assembly and the Parliament objected to the initiative, arguing that the service provisions and quality are guaranteed to be higher within a competing (private) insurance market; that overall healthcare costs will be lower, and that the new proposed system brings along with it too many uncertainties to risk such a change.

Those in favor of a single national insurance system believe this new system would reduce administrative costs and free funds for other healthcare purposes. They also believe a single system would eliminate “good risk” campaigns and other marketing expenditure that targets young and or “healthy” client groups.

The referendum was rejected

Healthcare prices are rising and budgets are tightening as morbidity complexities increase, paired with an ageing population and incremental technological costs. However, at this moment, switching insurance schemes is not a favored solution for Switzerland.

Switzerland notoriously has one of the highest expenditures per capita on healthcare worldwide (7,661 Euro), one of the highest out-of-pocket contributions per individual household in the EU (27%), and one of the highest expenditures as a percentage of GDP on healthcare (11.6%).

In contra of the reform: The current competition amongst the private insurance firms controls costs and drives innovation.

The private nature of the public Swiss insurance, as argued by the Swiss Federal Assembly, incentivizes the insurers to control reimbursements efficiently, be sensitive to patient satisfaction, and to devise innovative cost models in order to remain competitive and retain clients.

The opposition of the referendum believe that a single state-run insurance could reduce the freedom of doctor-choice of the patients and that the elimination of competition will lower the overall quality of healthcare on offer.

In favor of the reform: A state insurance system would have a greater commitment to prevention and a stronger price-negotiation position.

Supporters of the proposal argue that the current system is unsustainable for lower income households. Currently around one third of the Swiss population relies on a state subsidy to cover the cost of their basic health package premium; a state managed system would ensure universal affordability.

Furthermore, there is a concern that the current privately managed schemes offer too many and too complex insurance deals; over 300,000 different insurance products are on offer in Switzerland. This along with other factors creates a lack of transparency.

A unified system would not need the same marketing and advertisement campaigns as the multitude of private firms use, and no expenditures would be ill-spent on winning clients, argue the supporters.

For further information on Swiss healthcare, its insurance system and the macroeconomic climate, please look into our Business intelligence platform or order the TforG Deep Dive report for Switzerland containing volumes of 620 surgical procedures in 13 specialisms.

About Laura Weynants

Performs primary and secondary market research to create country reports at TforG. Interviews KOLs and medical sector professionals to build on TforG’s healthcare market expertise and competence networks. Complementing five years of sustainability policy and CSR communication, she now focuses on grasping key medical market trends, structures and opportunities in medical sectors worldwide. Coming from an international background of living in Germany, Spain, USA, UK and Belgium, she has gained a keen insight in international organizations and language skills to perform first hand investigations. She graduated from Sussex University Brighton, UK with a BA English Literature and Sociology and achieved a Master Degree in Sustainability and Corporate Social Responsibility in EOI Business School in Madrid, Spain.