All of a sudden, health costs are stagnating – in the short term, at least, that’s something to smile about

Jeune femme calculant le montant de ses frais de santé. | Keystone / Martin Ruetsch

Last year was the first time mandatory basic health insurance costs did not rise. Although exceptional factors have also had a part to play in this, the increase has been slowing down for quite some time now anyway. Despite this, physicians are vehemently opposed to any “cost target”.

Nought percent: According to the official statistics on mandatory health insurance, overall costs per capita did not increase in 2018. In fact, they have even fallen slightly into the negative, going from 3,849 to 3,848 francs per capita. This is a first in the 23-year history of mandatory basic health insurance. No-one should start cheering just yet, however. There are also exceptional factors behind this lack of increase. The main impact of Health Minister Alain Berset’s (Social Democratic Party of Switzerland) interference in the TarMED outpatients tariff has been that hospitals are in arrears with billing. The latest figures for 2019 show that costs are once again on the rise.

Despite this: According to statistics released by the Federal Office of Public Health (BAG), for some time now, the expenses of the mandatory health insurance system have been increasing at a slower rate than previously. This is no doubt down to the fact that inflation overall was declining over this period. In any event, costs “only” increased by an average of 2.6 percent between 2008 and 2018. Between 1997 and 2007, that figure was 4.7 percent. These figures include the total costs per person, including that portion which patients themselves pay in the form of excesses and co-pays.

Premiums rising more than costs

The country’s top physician feels vindicated: “I expect the Federal Government and health insurance funds to take note of these figures”, says Jürg Schlup, President of Medical Practitioners Association FMH. Time and again, insurers accuse physicians of compensating for reduced revenue with increased volume. These new figures have once again been proven these allegations false. “As physicians, we are part of the solution”, Schlup stresses.

Many physicians and hospital representatives have felt irritated for some time. In mid-July, the health insurance fund association Santésuisse expressed its annoyance when it issued a dramatic warning in the “Sonntags-Blick” newspaper: “Shock diagnosis: Health insurance funds warn of new costs avalanche”. Even health insurance fund representatives shook their heads at that one, but none more so than physicians: “Just once, Santésuisse and the BAG should tell people why premiums have been rising more than costs in recent years”, says Jürg Schlup.

Premiums should fall in some Cantons

Since 2008, mean premiums per person have risen by 3.7 percent on average, with costs rising by only 2.7 percent. As a result, many insurers have been earning unexpected surpluses. However, that money is being kept in the system, since profits are prohibited in mandatory basic health insurance. Although individual funds, such as Sympany and Concordia, have repaid money to their policyholders, for the most part, health insurance funds have used this money to increase their reserves: since 2012, reserves have increased by 20 percent, going from 820 to 980 Francs per person.

In the short term at least, there is cause to smile. The 2020 premium round, which Berset will be informing the Federal Council about at the end of the month, looks set to be unusually moderate. Even though insurers expect higher costs in future, the surpluses of the last few years have provided them with enough of a cushion to increase premiums less than they need to – or even reduce them. In fact, according to the “NZZ am Sonntag” newspaper, large health insurance funds are promising a moderate premium round. Helsana boss Daniel Schmutz has said that most of his fund’s policyholders can even look forward to a reduction in their premiums. CSS also wants to reduce premiums in some Cantons, the overall increase being just under 1.5 percent.

The big question is whether this is just a brief respite or a trend shift. FMH President Schlup is optimistic and is calling for the policy to be restrained. In his view, it should be concentrating on the standardised financing system for in- and outpatient services but any further decisions should only be made using sound judgement. “We’re on track and now we need to stay on track.”

The biggest struggle is yet to come

It is obvious that physicians are calming matters. In the meantime, however, representatives of health insurance funds are also changing their tune. Helsana boss Schmutz told “NZZ am Sonntag” that there has been a change in thinking among policyholders. “They know it’s not good for them or the system if they go running to the doctor for any minor issue and get as many medical services as they can.” In saying this, he also contradicted the “costs avalanche” rhetoric espoused by Santésuisse. It should be added that Helsana is no longer a member of Santésuisse but in fact is one of the founders of the competitor association Curafutura.

Easing costs also has political consequences. Physicians are feeling emboldened in their resistance against the other cost saving measures currently being worked on by the Federal Government. These include a project that not only physicians but also most health insurance funds want to prevent: “Targets for cost trends”. This sounds technical but it is completely new territory. There are currently no guidelines on the taxation of overall costs in the healthcare sector. You pay for what you have done and that’s how physicians believe it should remain. They warn against a “global budget” that would lead to rationing and waiting lists.

Cost target should improve transparency

Healthcare economist Tilman Slembeck takes a different view on the subject. He was involved in the idea of a cost target in an expert capacity. He stressed in advance that he was “completely open” as to whether the new figures actually point to a trend shift. However, if this were the case, then, in his view, physicians and hospitals especially would have nothing to fear from a cost target, since this would first and foremost create transparency. The policy, together with insurers, physicians and hospitals, would determine how great any cost increase can be. Provided that the actual costs fall below that target, nothing would happen.

Even if costs are higher, corresponding budget cuts are not planned, according to Slembeck. Instead, physicians and hospital directors ought to be justifying themselves and should have to explain any excessive increase in costs. This should motivate them to take on more collective responsibility for cost trends and to no longer think just about themselves. If this does not help, Slembeck can even envisage sanctions in the mid-term, these for instance taking the form of degressive tariffs when targets are exceeded. In the long term, in contrast, binding global or individual budgets, if need be, are conceivable as a last resort.

Federal Head of Finance sees no changes

Serge Gaillard also warns against drawing false conclusions. The director of the Federal Finance Administration disputes the fact that the latest figures demonstrate a trend reversal. On the contrary, the Federal Government, in its 2020 budget, is once again expecting strong growth in overall costs amounting to 3.7%. In any case, the Federal Council is sticking to its plans and, at the start of 2020, will present its cost targets.