The Swiss healthcare system is organizationally complex. Private actors, including health insurance funds, hospitals and medical associations, play major roles. Federalism also influences administration, as the cantons have extensive powers. Since the 1990s, the national government has been trying to standardize regulations and to institutionalize cost-saving incentives.

Until the first Swiss Health and Accident Insurance Act (KUVG) was passed in 1912, the national government had only limited influence over the health sector. Health insurance was dominated by private assistance funds, in which members insured themselves against loss of earnings due to illness. These funds were self-governing and self-regulating.  The municipalities were in charge of the hospitals. The national government had acquired limited responsibility for health matters with the founding of the Federal Office of Public Health (FOPH) in 1893, its new tasks including implementing the Epidemics Act and overseeing food inspection as well as medical certification examinations .

The Organization of Public Health (1912-1994)

The KUVG Act of 1912 paved the way for how the health care system in Switzerland would be organized over the longer term, along with setting national health policy. The national government refrained from centralization, such as by mandating coverage through a national health insurance scheme or by merging health insurance funds. Insurance coverage remained voluntary and the insurers (health insurance funds) were organised under private law. Nevertheless, the government did expand their regulation of the health insurance system. Health insurance funds could now apply for subsidies from the national government, but to do so had to meet legal requirements regarding benefits, admission to the fund, and financing. In particular, they had to admit women and men on equal terms, had no choice about covering certain medical services, and had to allow for free switches between health insurance funds. Beyond this, however, these funds were self-administrating.  Additionally, the health insurance funds receiving subsidies had to be recognized and supervised by the national government. The founding of the Federal Social Insurance Office (FSIO) in 1912 was a direct consequence of these new national powers. The FSIO became the second national office after the FOPH to have responsibilities for public health matters; both belonged to the Federal Department of Home Affairs.

The KUVG also established a division of labour in health policy between the Swiss Confederation and the cantons. Cantons and municipalities were free to declare health insurance compulsory in their territories, and by the late 1920s, more than half the cantons had established compulsory health insurance schemes, though usually only for those segments of the population with little income. Only the cantons of Jura and Neuchâtel introduced compulsory health insurance for the entire population in 1979. Individual cantons, such as Basel-Stadt, or rural cantons like Graubünden subsequently followed suit by establishing public health insurance funds. But in most cantons, compulsory health insurance continued to be provided by officially recognised private health insurance funds.

The healthcare system in Switzerland was thus federalist in character, with numerous cantonal features.  Early on, the cantons established platforms aimed at harmonization, including the Swiss Conference of Health Directors (est. 1919), renamed the Swiss Conference of Cantonal Health Directors (GDK) in 2004. Specialised health departments were created within cantonal administrations, responsible for enforcing national laws in the health sector, enacting health policy provisions, and supervising the health services. In addition, cantons were responsible for drug monitoring as well as for setting the rates for doctors’ services in their canton, usually in consultation with health insurance funds and medical associations.

The cantons played a key role in the hospital sector. Though hospitals were a municipal responsibility at the outset of the 20th century, by the 1950s this had increasingly shifted to the cantons, and since then most cantons have been involved in hospital planning. Cantonal subsidies covered a substantial part of the cost of public hospitals, not just in infrastructure but also in their operating costs. By the 1980s, 46% of hospitals were receiving public funding. In addition to the public hospitals set up by the cantons, municipal hospitals and private clinics also existed, some subsidised by the cantons. The lack of national regulation, however, resulted in large regional disparities in inpatient care.

It is not just the health insurance funds that reflect the strong private law tradition of the Swiss healthcare system: dental care and pharmacies were also largely privately organised. Particularly in cities, however, municipal authorities set up dental clinics for adults and for schools, financing them largely out of the public purse. Most doctors were self-employed, though the proportion of doctors employed by hospitals grew from 10% to almost 50% over the course of the 20thcentury. As a result, the national FMH Swiss Medical Association was long dominated by the interests of doctors in private practice.   

Basically, the division of tasks and the areas of competence defined by the KUVG were very stable. It would only be in 1964, due to the difficult financial situation of the health insurance funds at the time, that the KUVG would be partly revised.  In doing so, the national  government expanded the scale of its subsidies by linking them to how health insurance fund expenditures developed.  The intent was to cover 30% of expenditures, so the greater part of health care costs continued to be financed by health insurance premiums.

Expansion of National Competencies and Concentration of Tasks (since 1994)

In 1994, Swiss voters adopted the new Health Insurance Law (KVG) in a plebiscite; it came into force in 1996. The KVG introduced compulsory basic insurance at the national level. This basic insurance scheme defined a catalogue of benefits to be provided by the health insurance funds, with hospital care now also uniformly insured under this scheme. The insured remained free to choose their own physicians, and the status of the health insurance funds was not fundamentally changed by the reform. Most health insurance funds continued to be organised under private law within a state-regulated environment, with the KVG itself strengthening national supervision of the activities and organisation of the health insurance funds.

The KVG newly obliged health insurance funds to extend basic health insurance to all who were resident in Switzerland, and to charge the same premiums regardless of sex, age, or health risk. The law allowed for some flexibility in premiums, owing to cantonal and sometimes intra-cantonal differences, depending on the respective per-capita costs and health insurance fund-specific differences based on the type of insurance. Financing was pay-as-you-go, with insurers paying the ongoing expenses out of income received at the same time, largely meaning the premiums. In addition, the funds were required to invest minimum reserves.  A risk equalisation fund was established to compensate for the unequal distribution of risks between insurers, owing, for example, to differing average ages of the insured in a given health insurance fund.  The idea was to prevent health insurance funds from searching for "good risk" clients.  Furthermore, health funds that insured a large number of low-risk individuals had to pay balancing or compensatory amounts to help other funds which did not.

Despite the expansion of basic health insurance, private supplementary insurance remained an important source of business for health insurers. Supplementary insurance policies covered non-statutory benefits such as dental treatment or special hospital privileges. Here, insurers had greater leeway and could exclude insured persons. Supplementary insurance fell under private insurance law, and was therefore supervised by FINMA, the Swiss Financial Market Supervisory Authority. The expansion of compulsory basic insurance has led to a decline in the importance of supplementary insurance since 1996. While the net amount in basic insurance has almost doubled since, the net amount in supplementary insurance has even decreased slightly (4.3 billion CHF in 1996, 4.0 billion CHF in 2012). Income from supplementary insurance premiums has also increased far less than income from compulsory basic insurance.

The KVG obliged insurers to also expand their health maintenance efforts. In 1996, the cantons and health insurers established the "Health Promotion Switzerland" foundation, its activities financed by the insured. The purpose of the foundation is to initiate, coordinate and evaluate health-promoting and disease prevention measures.

Passage of the KVG has led to standardisation in some healthcare areas. Among others, it prescribed uniform tariffs for physician services throughout the country, and this led to introducing Tarmed, the first national tariff structure, in 2004. The medical profession, health insurers, hospitals and social insurance companies jointly supported this structure. Since 2013, the Federal Council has also been empowered to adapt the Tarmed tariff structure on its own should the parties involved prove unable to reach an agreement. The Federal Council made use of this authority in 2014 and again in 2018.

At the national level, starting in 2004, the FOPH took over FSIO’s regulatory and supervisory functions in the health insurance sector.  It was now the FOPH’s responsibility to supervise the decentralised health insurance fund system, and make sure insurers were applying the KVG uniformly and meeting their financial obligations. The FOPH's supervisory functions are governed by the Health Insurance Supervision Act (KVAG), introduced in 2014.  It contains provisions about the assets and reserves of health insurers and the criteria for approving premiums.

Switzerland has never genuinely questioned the system of levying "per head" premiums, even it means the financial burden is greater for low-wage earners than those with higher income.  To counteract the unequal financial burdens, the KVG introduced an individual premium reduction instrument in 1996. It specified that those among the insured with only modest financial means would receive individualized reductions in their premium payments. Implementation was left to the cantons, though this led to disparate regulations regarding entitlement; financing was provided by the national government and the cantons. The instrument soon became a major redistributor of social benefits, and by 2017, more than a quarter of the insured were entitled to premium reductions. The distributed funds amounted to 4.5 billion CHF - considerably more than all the subsidies provided to agriculture by the national government.   

Furthermore, cantons could introduce their own health legislation, though it has to be in compliance with national law. The planning, management and partial financing of public hospitals​​​​​​​, as well as emergency medical services, continued to be their responsibility. The KVG had regulated hospital planning in 1996: now lists of designated hospitals determined where patients, who were now compulsorily insured, could be treated. With the 2012 revision of the KVG, private hospitals could also be included on such lists.  From then on, treatment at listed hospitals is financed by "flat-rate payments", 45% of which is financed by the health insurance funds and 55% by the public sector. The national government thus increasingly regulated cantonal competencies with respect to hospitals, in the hope of being able to institutionalize cost-saving incentives.

Literatur / Bibliographie / Bibliografia / References: Alber Jens, Bernardi-Schenkluhn Brigitte: Westeuropäische Gesundheitssysteme im Vergleich. Bundesrepublik Deutschland, Schweiz, Frankreich, Italien, Grossbritannien, Frankfurt am Main 1992; Uhlmann Björn, Braun Dietmar: Die schweizerische Krankenversicherungspolitik zwischen Veränderung und Stillstand, Chur/Glarus 2001; Oggier, Willy (Hrsg.): Gesundheitswesen Schweiz 2015-2017, Bern 2015; Website des Bundesamts für Gesundheit: www.bag.admin.ch; Ärztestatistik des FMH: www.fmh.ch; HLS / DHS / DSS: Gesundheitswesen, Spital, Krankenversicherung, Krankenkassen.

(05/2020)