Healthcare expenditure rises to over CHF 100 billion

Above-average growth in healthcare expenditure during the forecast period

According to KOF’s forecast, healthcare expenditure in Switzerland continued to rise by 3.8 per cent in 2023 compared with the previous year. KOF is forecasting that healthcare expenditure growth will increase to 4.4 per cent for the year ending 2024. The growth rate will then be slightly lower again at 3.7 per cent in 2025 and 3.4 per cent in 2026. The average annual increase over the forecast period is 3.8 per cent. The average rise over the previous ten years was 3.2 per cent and 3.4 per cent over the period 2003 to 2012. Per-capita annual healthcare expenditure is CHF 10,684 for 2023, CHF 11,003 for 2024, CHF 11,303 for 2025 and CHF 11,594 for 2026.

Growing relevance of the healthcare sector

According to KOF’s forecast, healthcare expenditure as a share of gross domestic product (GDP) amounted to 11.8 per cent in 2023 compared with 11.6 per cent in the previous year. Healthcare expenditure as a proportion of GDP will continue to grow in the future. KOF is forecasting that it will increase to 12 per cent in 2024, 12.1 per cent in 2025 and, finally, 12.2 per cent in 2026. By comparison, its share of GDP was only 9.1 per cent in 2000, which underlines the increasing relevance of the healthcare sector.

Volume growth mainly responsible for the rise in expenditure

As has often been the case in the past, real growth in healthcare spending will exceed nominal growth in 2023 and 2024. Prices are expected to rise slightly in 2025 before trending downwards again at the end of the forecast horizon. Consequently, the growth of expenditure in the healthcare sector will continue to be dominated by increasing volumes. This contrasts with other sectors such as hospitality and construction.

Health insurance premiums continue to grow sharply

The healthcare sector can be viewed from three perspectives: what services were provided, who provided them and from which source of funding they were paid for. The results of the forecast show that long-term care continues to grow at an above-average rate owing to demographic ageing. However, all key services are growth drivers. The main categories of service providers – hospitals, socio-medical institutions and doctors’ surgeries – are among the growth drivers in the healthcare system. This will be funded by rising cantonal payments and, in particular, by a sharper increase in compulsory health insurance, which is likely to be reflected in higher premiums.

Major challenges in the healthcare system

From a macroeconomic perspective it is not problematic per se for an economy with an ageing society to be devoting an increasing share of its total expenditure to healthcare spending. However, the Swiss healthcare system is facing major challenges ranging from efficiency, quality and distribution issues, digital services and the use of artificial intelligence to the safety of the supply of medicines and overcoming the antibiotic resistance crisis.