KOF-NZZ survey: economic researchers reject premium-reduction and cost-capping initiatives

The cost of health insurance premiums for Swiss households has risen steadily in recent decades. It was against this background that the premium-reduction initiative was launched. It stipulates that insured individuals should not have to spend more than 10 per cent of their disposable income on health insurance premiums. If this limit is exceeded, the federal government and cantons are to intervene and reduce premiums. Swiss economists surveyed in May 2024 were asked whether they were persuaded by this initiative from an economic perspective. Almost 65 per cent of the economists who responded rated the initiative as (mainly) negative, just under 4 per cent as neither positive nor negative (i.e. neutral) and almost 32 per cent as (mainly) positive.

Measures for implementing the cost cap: doubts about the competence of the authorities

The second initiative – a cost cap – focuses on the rise in healthcare costs. The initiative calls for the federal government, in cooperation with the cantons, to take measures to reduce costs if the average costs per individual with compulsory health insurance rise significantly faster than nominal wages and economic output. Compared with the premium-reduction initiative, economists are less unanimous on whether the initiative should be supported from an economic perspective. While 38 per cent are (mainly) in favour of accepting the initiative, 51 per cent are (mainly) against it. The remaining 11 per cent are undecided. The negative group is also more clear-cut in its opinions: 24 per cent strongly oppose the initiative, while only 1 per cent strongly support it.

As no specific measures to reduce costs are defined in the text of the cost-capping initiative, the authorities responsible would have to devise and implement measures as soon as the cost cap takes effect. The question is therefore whether, in this case, the authorities will take measures that are efficient from an economic point of view. The economic researchers surveyed are sceptical: just under 21 per cent have no confidence that efficient measures will be implemented, almost 70 per cent have a fairly low level of confidence in this respect and 10 per cent have a fairly high level of confidence. None of the respondents has complete confidence in the authorities.

Greater efficiency through more competition in the pharmaceutical market

Measures to increase efficiency in the healthcare system can lead in different directions. The survey of economists asked respondents to select from a list the three measures that they considered the most suitable for improving efficiency in the healthcare system. Allowing parallel imports of patent-protected medicines is seen as the most effective and was chosen by 63 per cent of respondents. The second most frequently chosen measure – lowering prices by boosting competition – points in a similar direction: 42 per cent would recommend applying antitrust law to the healthcare system in order to prohibit tariff negotiations between associations.

Measures relating to insurance models were chosen more frequently than average: 34 per cent of respondents would increase cost-sharing (deductible and excess) for insured individuals, while 32 per cent would set managed care models (restricted choice of doctor, gatekeeper) as the standard for basic insurance. A less popular measure with regard to insurance models would be the introduction of basic insurance models with different types of benefits (23 per cent).

Some measures are considered more suitable than others in terms of reconfiguring the hospital system even though they were not mentioned with above-average frequency overall. According to the economists surveyed, allowing state (rather than cantonal) planning of the hospital system (27 per cent) and reducing the number of hospitals (23 per cent) are preferable to the two rarely mentioned measures of reducing the number of specialist doctors (8 per cent) and privatising public hospitals or no longer covering deficits (7 per cent). The introduction of a single health insurance fund for basic insurance is mentioned by relatively few economic researchers (22 per cent) as one of the three most effective measures.

Per-capita premiums and income-related premiums are proposed almost equally frequently for funding

Under the current system, compulsory health insurance is financed by insured individuals’ contributions, which are standardised within a particular premium region and age group regardless of income. Insured individuals of modest financial means as well as children and young people in full-time education are entitled to premium reductions. Compulsory health insurance is therefore mainly financed by per-capita premiums; alternative options would be income-related premiums, risk-based premiums or funding through general tax revenue.

The majority of economic researchers surveyed are of the view that the per-capita premium should remain the main source of funding in future. 34 per cent of respondents chose this option. However, many economists (31 per cent) consider income-related premiums to be the preferred option. By contrast, funding through risk-adjusted premiums (21 per cent) and funding through general tax revenue (8 per cent) are less popular. 6% prefer other systems.