KOF Expects Health Care Expenditures to Grow More Slowly
Although growth in Swiss health care spending slowed slightly last year, it is likely to accelerate to 3.9 per cent by 2019. While rising wages and an aging population are driving up health care expenditure, the political initiatives introduced should rein in costs to some extent. This year will see per-capita spending exceed CHF 10,000 for the first time.
These are among the findings of the twice-yearly KOF Health Care Expenditure Forecast, which has been compiled with a research funding provided by TopPharm.
As predicted by KOF, health care spending rose by 3.8 per cent in 2016 according to the preliminary figures published by the Swiss Federal Statistical Office. No official figures are available yet for 2017. Nominal wage growth was low last year, the number of elderly people rose less sharply than expected and, in addition, growth in the population as a whole was weaker than in recent years. A further factor is that spending on mandatory health insurance increased only moderately. For these reasons, KOF has revised downwards its forecast for last year’s health care expenditure. According to its spring forecast, this spending is likely to have risen by 3.5 per cent in 2017 (autumn 2017: 4.1 per cent).
This year, KOF expects wages to rise slightly more sharply and the number of elderly people to continue to increase. At the same time, political initiatives (reviewing drug prices or TARMED) should take effect, containing the growth in health care costs. Consequently, KOF is forecasting that health care spending will grow by 3.8 per cent in 2018. This year will see per-capita spending on health care exceed CHF 10,000.
In 2019, nominal wage growth is likely to accelerate while the elderly population continues to increase. On the other hand, additional – albeit modest – cost savings are expected to come from the measures taken to shift health care more from inpatient to outpatient treatment. As a result, health care expenditure is likely to rise by 3.9 per cent. Overall, outpatient treatment is expected to grow faster than inpatient care over the coming years. And, given the increasing number of people requiring care, the field of long-term care is likely to expand further.
The growing economic significance of health care is also reflected in the levels of consumer spending. While health care accounted for only 10 per cent of a representative basket of goods purchased by households back in 1993, now – 25 years on – it accounts for 15 per cent. The proportion of people working in health care (measured in terms of full-time equivalents) has also grown over this period and now stands at 7.1 per cent.
About the study
The forecast of ETH Zurich's KOF Swiss Economic Institute on the development of Swiss health care expenditure is published twice each year. The spring forecast is supported by the company external page TopPharm with a research contribution, whilst the autumn forecast is supported by the internet comparison service external page comparis.ch.