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HEALTH

EXPLAINED: How Switzerland wants to cut soaring healthcare costs

Swiss health costs have been rising in recent years, with further spikes, including in insurance premiums, seen as inevitable. The government is proposing measures to counter this upward trend.

EXPLAINED: How Switzerland wants to cut soaring healthcare costs
Switzerland wants o implement coordinated medical networks to save costs. Photo: Rodnae Productions on Pexels

Based on the information released by Santésuisse, an umbrella group for health insurance companies, an overall increase of around 4 percent for 2023 will be the norm.

Unfortunately for the consumers, who are already hard-hit by rising energy costs, premiums for compulsory health insurance will likely rise by an average of 5 percent in the fall, according to online price comparison site, Comparis.

And many people could even see their premiums soar by more than 10 percent in 2023 — the sharpest hike in premiums in 20 years.

The exact amounts of premiums for all policyholders will be released by the end of October.

The price hikes are not a new phenomenon per se: over the past 20 years, costs have risen at twice the rate of economic growth, resulting in health insurance premiums that are 90 percent higher than in 2002.

READ MORE: How spiralling costs are jeopardising Switzerland’s healthcare system

Why have these costs been increasing so much?

Part of the reason is the fact that people in Switzerland have a high life expectancy, but as they get older, they tend to suffer from chronic, cost-intensive diseases.

The more recent hikes can be attributed to higher medical costs incurred during the two years of coronavirus pandemic, estimated to cost insurers over one billion francs so far, not even taking into account about 265 million spent for Covid vaccinations in 2021.

Add to that the cost (paid for by the government) of Covid tests, as well as booster shots administered in 2022, and those still to be given once Switzerland rolls out second doses in 2023.

How will the government cut these costs?

Santésuisse has been urging the Federal Council to implement a range of reforms to reduce costs and ensure that not so many are passed on to consumers. 

On Wednesday, authorities announced a package of measures aimed at controlling costs. “These measures will improve medical care and contain rising costs in the healthcare system”, the Federal Council said.

Coordinated networks

These care networks are seen as a way to reduce unnecessary medical services. 

“They bring together health professionals from several disciplines to provide ‘all-in-one’ medical care. They improve coordination throughout the treatment chain, for example when various specialists are caring for an elderly person with several chronic diseases”, Federal Council said in a statement.

Hospitals, pharmacies, and various therapists would be attached to the network, and all treatments “will be invoiced at once, as if it were a single supplier”.

Right now, all service providers invoice insurance carriers separately, which adds to administrative costs; the new system is also believed to provide a better oversight and control, and eliminate unnecessary or redundant medical treatments, Health Minister Alain Berset said during a press conference in Bern on Wednesday.

Faster and cheaper access to medicines

The government also wants to guarantee “fast and as inexpensive as possible access to expensive innovative medicines”.

To achieve this, it wants to “anchor in the law” an already widely-used practice: to conclude pricing agreements with pharmaceutical companies. It would mean that drug manufacturers would have to reimburse a portion of the price to insurers.

“This measure makes it possible to guarantee rapid access to these drugs, while limiting their price”, authorities said.

Electronic invoicing

Another measure will require all providers of inpatient and outpatient services to send their invoices to insurance companies in electronic form — seen as a quicker, more effective and cheaper way to transmit billing information.

These measures “will make it possible to curb the rise in costs,” the Federal Council said, adding that “it is not yet possible to estimate the concrete extent of these savings, which would depend on how the health system will implement the measures”.

It is now up to the MPs to debate these proposals.

READ MORE: Why Swiss health premiums are set to rise — and what you can do about it

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For members

HEALTH INSURANCE

REMINDER: Key tips on changing your Swiss health insurance as deadline nears

If you are unsatisfied with your health insurance plan or want to take out a cheaper one, you need to act fast — the November 30th deadline is fast approaching. Here are a few last-minute tips.

REMINDER: Key tips on changing your Swiss health insurance as deadline nears

What’s happening?

Switzerland’s world-class healthcare system comes with a price, but while most options are costly, choosing the right plan can save you hundreds of francs per month. 

This is all the more relevant now, as the cost of premiums for the compulsory (KVG / LaMal) coverage is set to increase by 6.6 percent on average in 2023 — and in some cantons by even more.

For instance, the highest, above-national-average premiums will hit Neuchâtel (+9.5 percent), Appenzell Innerrhoden (+9.3 percent), and Ticino (+9.2 percent).

Residents of Zurich will see their premiums increase by 7 percent.

READ MORE: Which Swiss cantons will see the biggest increase in health insurance premiums?

Rates are set by the cantons, but while changing your place of residence just to get a cheaper health insurance may not be a viable option, in many cases, you can get the same benefits as you currently get for a lower price just by changing your carriers — not cantons.

However, f you want to switch your provider for 2023, you must do this by November 30th.

This can be the case particularly for foreigners in Switzerland, who may have come to the country and been signed up for an insurance plan – for instance through recommendations from friends or workmates – without properly knowing the ins and outs of the healthcare system. 

The following guide provides info on how to change your healthcare provider, but keep in mind that if you want to cancel your current plan and switch to another one, you must notify your carrier, by registered post, by November 30th at the latest.

However, there is a certain process you must follow if you are changing carriers.

This is what you should do

If you do decide to part ways with your current provider, make sure you have another policy in its place before making the switch. Health insurance is compulsory in Switzerland for every resident, whether Swiss or foreign, so you can’t be without coverage even for a short period of time.

As stated above, the insurance carrier must receive your termination letter, sent by registered mail, no later than November 30th.

You must attach proof that you have taken out a new insurance policy.

Any outstanding monthly premiums must be paid before you can make the switch.

You can use these templates in German, French, or Italian to create the cancellation letter.

READ MORE: How to change your health insurance carrier in Switzerland 

How do you find a cheaper plan?

Hopefully, you have done so already, but if not, you must really hurry to get this done in the few days that you have left.

These are the less expensive alternatives:

Health maintenance organisation (HMO)

Under this model, policyholders are required to consult a particular HMO practice. Two disadvantages of this alternative is a limited choice of doctors and you also need a referral to see a specialist.

However, the benefit is a premium reduction of up to 25 percent compared to the conventional insurance.

Family doctor model

Your family doctor, a general practitioner, will be designated by your insurance company and will be in charge of all your medical treatment.

He or she will refer you to a specialist if necessary. 

If you opt for this option, you could save 20 percent on your insurance.

The Telmed alternative

If you choose this option, you have to call a telephone service and get a referral to a doctor or hospital.

This does not apply to medical emergencies and other exceptions, such as eye exams and annual gynecological check-ups.

Total savings could range between 15 and 20 percent. 

Increase your deductible

In Switzerland, the deductible (franchise) ranges from 300 to 2,500 francs.

The lower your deductible, the higher your premiums, and vice-versa.

If you are young, healthy, hardly ever get ill, and don’t take any expensive medications, then you can save substantially with the highest franchise.

Keep in mind, however, that if you choose the highest deductible and end up needing medical care, you will have to pay a greater proportion of the costs.

Pay the premiums in one lump sum

Most insurance carriers will give you a 2-percent reduction if you pay your premiums upfront rather than on monthly basis.

So if you want to keep your current plan, this may be a good cost-cutting option, provided you can pay the hefty amount in one lump sum.

Keep in mind that November 30th is the deadline not only for switching from one insurance carrier to another, but also for notifying your current company about the changes you want to make to your deductible or any other tweaks to your policy.

READ MORE: Everything you need to know about health insurance in Switzerland

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