Healthcare insurance in Switzerland: Private insurance companies providing Swiss public health coverage
Switzerland has earned a reputation for its neutral positioning in international affairs, its safe-haven banking sector, its highly developed service and pharmaceutical sector, and its high level of income and standard of living. Switzerland enjoys a wealthy modern market economy and one of the highest per capita GDPs in the world, reaching €60,498 per capita with a nominal GDP of €599 bn in 2015. Its per capita GDP is over twice that of the United Arab Emirates (€27,780).
Switzerland ranks highly on life-quality indicators; e.g. for having one of the highest life expectancies and highest disposable incomes worldwide. Healthcare spending in Switzerland as a percentage of GDP in 2015 is around 11.6%, equivalent to €8,393 per capita. The comparative spending in Germany is 11.6% of GDP with €4,258 per capita, and 11.3% in Austria with €4,416 per capita.
Of the total government expenditure in 2015, 22.8% is spent on public health provisions. In terms of the total healthcare expenditure within Switzerland, 65.9% of the spending originated from public sources, and 34.1% came from private funds.
Universal health insurance
To obtain healthcare insurance in Switzerland is obligatory by law. The law regulating the health insurance in Switzerland is called the Bundesgesetz über die Krankenversicherung (KVG, German) or Loi fédérale sur l’assurance-maladie (LAMal, French). The Federal Office of Private Insurance (FOPI) is the regulatory body for private insurance.
The health insurance companies in Switzerland are private and competing with one another, though there are certain basic guidelines and competitive restrictions. All insurance companies are obliged to offer the same fixed basic insurance package in terms of content.
In the basic healthcare package, the patient may only seek consultation and treatment within their corresponding canton, unless in case of an emergency or when requiring a specialized surgery, e.g. a transplant.
The basic package includes an approved list of medicine coverage, and in theory services are reimbursable if they follow the principle of wirksam, zweckmässig und wirtschaftlich (WZW, translates as, ‘effective, expedient and economical’).
The Federal Department of Home Affairs is responsible for evaluating whether a performance is insured, i.e. reimbursable or not.
Public – funded i.e. insured physicians – can be investigated by the insurance company they are affiliated with if the insurance company finds that the volume of medicine prescribed or services provided for the patient are too high. If the physician cannot justify the amount of prescriptions for a particular patient, then he/she can be asked to pay part of the costs. This increases pressures on the physician to make financially justifiable decisions.
In 2015, around half of Swiss GPs and more than 400 specialists were members of physician networks, of which 85% are associated with insurance providers, meaning they commit to sharing budgetary responsibilities and to adhere to established costs for certain patient groups.
Pressure on cost-containment and prescriptions
The private Swiss health insurance companies have a substantial grasp over healthcare costs and are a weighted authority on expenditure and cost-containment in the public healthcare sector.
Physicians that treat patients registered with health insurers; i.e. practitioners who are reimbursed by a health insurance company, must be able to justify the volumes and expenses of the prescriptions they prescribe their patients. If unable to justify the expenses the physician can be requested to repay part of the costs him/herself.
There is a blue letter which a doctor could receive if they prescribe too much medication or notably expensive treatments or procedures. This letter serves to warn the physician provider and keep their spending in check.
An estimated 3% of Swiss physicians receive such a letter in an average year, of which less than 1% is in fact requested to supplement the treatment cost.
Basic health insurance and Managed Care Plans
Insurance clients are at liberty to change insurance provider up to twice in one year. The package is divided into sickness insurance, maternity insurance and accident insurance.
The following are examples of the services it covers:
- Hospital (from an accredited hospital list) and outpatient stay in a general ward within the respective canton
- 9 sessions of physiotherapy and ergotherapy
- Domestic consultation by a physician or chiropractor
- Prescribed rehabilitation, including health spas
- Inevitable dental services
- Supplementary medication, including alternative and homeopathic treatments, following a physician referral
Managed Care Plans (MCP) consist of care-tracks that are managed by a Managed Care Organization (MCO) which reduce the patient’s provider choice to pre-approved funded practitioners. MCPs are designed to be the cheaper insurance and healthcare option. MCPs are selected by approximately 15% of insured members. Often the MCO will pre-select their own medical centers, when they have such resources available to them, and rely on physician networks where GPs apply gatekeeping policies.
Public premiums and retention
The basic health insurance is paid for with a per capita premium paid monthly by the insured, which is unaffected by health risk factors.
Premiums for healthcare are dependent upon several factors and vary across Switzerland, such as:
- The canton of residence
- The health insurance company
- Whether it is a basic or Managed Care model
- The chosen deductible category
In 2015, around 70% of the Swiss population had a basic insurance model with a low deductible level.
GPs associated with insurance companies can serve as gatekeepers, and the patient can benefit from a rebate of 10 to 20% by following their recommendations. However, this is not seen as a substantial influence upon the market.
Individuals unable to afford the basic package premiums are eligible for tax-financed means-based subsidies. Around 32% of insured Swiss residents were reliant upon such subsidies in 2013.
Around 70% of Swiss residents have some kind of additional health insurance coverage. Private insurance facilitates complementary and supplementary benefits.
Voluntary health insurance (VHI) is also obtained in order to earn greater freedom of choice regarding service providers who work outside of insurance networks.
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