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Swiss deny more competition in health insurance

Partner Institute: 
Università della Svizzera Italiana, Lugano
Survey no: 
(12) 2008
Luca Crivelli (proof-reading by Mary Ries)
Health Policy Issues: 
Role Private Sector, System Organisation/ Integration, Funding / Pooling
Reform formerly reported in: 
Anchoring competition in the Constitution
Popular initiative for lower insurance premiums
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no yes no no no


On 1 June 2008, with a clear majority, the Swiss people rejected a counter-project which was drawn up by Parliament as an alternative to the Swiss People?s Party initiative ?Yes to a reduction in compulsory health insurance premiums?. The aim of the counter-project was to include some principles in the Federal Constitution which the Swiss health insurance system is based on today, but also to make a break with the past.

Recent developments

In June 2008, the Swiss people were called on to make an important decision which could have broken down the compromise between market logic and state regulation in the present legislation.

Swiss People's Party initiative from 2004

In 2004, the Swiss People's Party launched an initiative based on two fundamental pillars: the transfer of part of the services presently included in the compulsory benefit basket to complementary private insurances and the strengthening of competition and market logic in the realm of compulsory health insurance (by suppressing mandatory contracting, accepting liberalization of the fees, and granting health insurers the role of single-buyer of health care services) [see 1]. In particular, market mechanisms would have been reinforced in the relations between insurers and insured and in the relations between insurers and providers of care.

Parliament's counter-project

Parliament drew up a counter-project to this initiative (called "For a More Effective and Better Quality Health Care System Thanks to Greater Competition"), with the objective of anchoring the most important principles of the initiative within the Federal Constitution and increasing the probability of acceptance [see again 1]. The most significant amendment was to give up the idea of shrinking the benefit basket. In January 2008 the Swiss People's Party decided to withdraw the initiative and completely supported the counter-project of the Parliament.

Counter-project rejected by voters and cantons

On 1 June 2008, 69.5 percent of the voters and all cantons decided to reject the counter-project, opting once again for the status quo; to approve a constitutional change a dual majority rule is required, i.e. at least 50 percent of the population and the majority of the cantons. A posteriori, the result could have been taken for granted. From 1974 till today, the Swiss people have rejected at least nine reform proposals of the health insurance in popular ballots (six people's initiatives, two counter-proposals and one referendum), in each case with an overwhelming majority (between 60 and 76 percent). However, two months earlier ballot surveys realized by Swiss Television had outlined a different picture; six Swiss out of ten claimed to be in favor of the counter-project, two were against it and two undecided. The fact is that the citizens' opinions change as soon as the voting campaign heats up. In a survey conducted a year before the vote on the single sickness fund (rejected in March 2007), a majority of citizens had also declared they would prefer a system managed by one insurer only.

Exit or voice?

Till now the interest groups, especially those who see a real threat to their own future in a given change in the legislation (the insurers in 2007, doctors, pharmacists and cantonal authorities in 2008) have managed to convince the citizens to vote to maintain the status quo. However, the outcome of the ballot is not completely irrational. As shown in figure "Correlation in the cantonal results of the 2007 and 2008 popular ballots", the result of the 2008 popular ballot and that of the previous ballot on the introduction of a single health insurance bear witness to a clear negative correlation between the preferences of the population of the twenty-six cantons. Both reform projects were still far from obtaining the required dual majority (of the people and of the cantons), but they had the merit of pushing the debate on the reforms toward a well-defined strategic choice between the role given to market mechanisms and to state regulation. Basically it needs to be established which instruments have to be offered to the citizens-insured persons so that they can show their dissatisfaction and press the insurance and health care systems to promote quality and efficiency; is it right that citizens assume the role of consumers only, addressing what the market is able to offer with their own buying behavior (exit, choice of sickness fund, of a given doctor / hospital)?; or is it appropriate that citizens are able to participate more in the definition of health care supply and of the features which characterize it by means of direct democracy and the choice of the political system (voice)?

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Characteristics of this policy

Degree of Innovation traditional neutral innovative
Degree of Controversy consensual controversial highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low high very high
Transferability strongly system-dependent system-dependent system-neutral
current current   previous previous

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no yes no no no

Initiators of idea/main actors

  • Government
  • Parliament
  • Providers
  • Payers
  • Patients, Consumers
  • Political Parties

Stakeholder positions

A campaign marked by slogans, for a bill permeated by ideology  

The counter-project drawn up by Parliament seemed to be permeated by ideology; it presented the introduction of competition in health care as a change which in any case would automatically help to increase quality and reduce costs [see 2]. On the other hand, the Federal Council's position was more moderate; it was made known through the Federal Office of Public Health [see 3]. The support of the government for the counter-project was not very staunch and it was caused by the obligation to respect an institutional constraint, which expects the executive not to dissociate itself formally from Parliament's proposals.

In fact the empirical reality about the relation between liberalization, prices and quality in the health care field is somewhat contradictory. It is sufficient to remember that the quality of a health care system which is strongly deregulated like the American one is certainly not better than that in the European systems although the costs and prices in the USA are decidedly higher [see 4]. In the public presentations of the counter-project the problems linked to the failures in the health care market [see 5] seemed in fact to disappear in a flash as if the countries which tried to construct their own health care system on the free market had automatically succeeded in solving them. Competition is not a natural balance toward which the market spontaneously converges, it is a fragile, precarious condition. A statement by the German Minister of Health, U. Schmidt expresses this idea very eloquently: "Whoever calls for more market orientation will usually not want to have that principle applied to him or herself. This is true both for political parties and for players involved in the health system. Whoever claims to be committed to deregulation will often end up making proposals that by far exceed the volume and intensity of existing regulations" [see 6]. No company driven by the search for profits likes competition; it will do everything in its power to strengthen its own market power, by allying with other firms for example in order to beat the competitors. For those in favor of laissez-faire economy this is already competition; to use a sports metaphor, it is the essence itself of the market economy, according to which the essential element is to enter the race, by privatization or deregulation. But for economists competition is a final result, which can be completely measured in terms of "creation of value for the consumers." This presupposes prices which are very close to the minimum cost of production and to the level of quality desired by the consumers. In complex contexts like health care, where prices are altered by the existence of an insurance cover and quality is difficult to measure, competition must be supported and encouraged by the recourse to regulation mechanisms. For this reason, if more market is desired, institutions (especially independent regulation agencies) must be set up which are able to set themselves free from political power and to whom the necessary resources are entrusted to sustain virtuous competition over time.

Promoters of counter-project

The ideology of the promoters of the counter-project was shown mainly in the arguments put forward during the information campaign, conducted around two key concepts: the constitutional article would have led to more "transparency" and created more "freedom" [see 7]. To realize more transparency is a sacrosanct objective when collective resources are used in a health care system with universal access. But a clear strategy is required in order to realize transparency. It is not enough to write the word "transparency" into the Constitution for the profound asymmetries in information which exist in the health care market to disappear and for a quality culture based on impartial, evidence-based information to become established. More transparency is not obtained through simple deregulation of health care markets, but by adopting better regulation. The idea of freedom, associated with cost reductions, seems unrealistic. If costs are to be contained, the road followed more or less everywhere has been "the integration of care processes", which has the advantage of overcoming the present fragmentation of health care supply but also results in the reduction of the citizens' freedom to "shop around" in the health care supermarket. In particular, instead of explaining "how" the market and competition would have managed to solve the ambiguities which individual choices imply in the health care context (remember that when individuals are faced with mandatory insurance, which is expected to unite mutuality and solidarity, their behaviors always have collective impact), the promoters of the counter-project spoke about the "end of planning by the Central State" [see 8]. In this rhetoric they forgot, however, that Swiss health care is based on federalism, a form of government which is very close to the citizens and under democratic control.

Opponents of counter-project

Certainly the coming onto the stage of the cantonal governments alongside doctors and health care providers changed the fate of the campaign and had a crucial impact on the ballot's final result. In the two months preceding the ballot, the extremely fierce campaign of the cantonal authorities succeeded in bringing about a sensational reversal in the outcome of the vote. The campaign of the opponents of the counter-project turned out to be especially effective on two fronts:

  • it maintained that the introduction of the constitutional article would in fact have brought about the abolition of mandatory contracting, offering insurers the chance to choose which doctors, hospitals or pharmacies to stipulate a contract with.
  • It raised doubts about the appropriateness of entrusting health insurers with the public money which at present is paid directly to the hospitals. [see 9a, 9b, 9c and 9d]

In fact, it would have been necessary to introduce an amendment in the federal health insurance law in order to abolish mandatory contracting. Therefore Swiss citizens would have had a second chance to express their opinion on the topic and to veto it. But it cannot be denied that this amendment would have been completely in tune with the spirit of the constitutional article. As far as the monist financing system of hospitals is concerned, it must be remembered that with the adoption of the new hospital financing model, which was decided on at the end of 2007, Parliament had already solved the main problems of the old system. The introduction of payment for services (SwissDRG) and the alignment of the interests of the two financing bodies (called on to share in a fixed percentage of the expenses) should enable the logic of "cost shifting" inherent in the present system to be overcome.

Correlation in the cantonal results of the 2007 and 2008 popular ballots

Actors and positions

Description of actors and their positions
Federal Councilvery supportiveneutral strongly opposed
Cantonsvery supportivestrongly opposed strongly opposed
Majority of both housesvery supportivevery supportive strongly opposed
Phisicians (FMH)very supportivestrongly opposed strongly opposed
Hospitals (H+)very supportivesupportive strongly opposed
Pharmasuissevery supportivestrongly opposed strongly opposed
Health insurers (santésuisse)very supportivevery supportive strongly opposed
Patients, Consumers
Consumer and Patient Associationsvery supportivestrongly opposed strongly opposed
Political Parties
CVP + left wingsvery supportiveopposed strongly opposed
FDP + CVPvery supportivesupportive strongly opposed
current current   previous previous

Actors and influence

Description of actors and their influence

Federal Councilvery strongstrong none
Cantonsvery strongstrong none
Majority of both housesvery strongneutral none
Phisicians (FMH)very strongstrong none
Hospitals (H+)very strongneutral none
Pharmasuissevery strongneutral none
Health insurers (santésuisse)very strongneutral none
Patients, Consumers
Consumer and Patient Associationsvery strongstrong none
Political Parties
CVP + left wingsvery strongstrong none
FDP + CVPvery strongstrong none
current current   previous previous
Majority of both houses, Health insurers (santésuisse)Hospitals (H+)FDP + CVPFederal CouncilCVP + left wingsPharmasuisseCantons, Phisicians (FMH), Consumer and Patient Associations

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Expected outcome

If it had been approved, the new constitutional article would have made a break with the past. The historical balance between effectiveness/efficiency and equity, and between market logic and public regulation would have been altered; till now the Swiss health insurance system has been based on these aspects. By its very nature, the Constitution should sanction the basic orientation the State rests on. In article 117a, proposed by Parliament, the concepts of competition and individual responsibility are confirmed, while a reference to solidarity, which is also the deepest root in the Swiss system of health insurance, is absent. Finally, also the reference to the task of regulation is somewhat bland; the joint role of Confederation and cantons in setting the framework conditions is hinted at.

A second problem with this counter-project is to be seen in the method plan and in respect for democracy. Many elements taken from the constitutional article have in fact been awaiting Parliament's attention for some time and some of them have even been acknowledged by the law on health insurance. Others, especially the passage to a monist financing system of hospitals and the freedom to contract, required the mediation of a democratic, open debate in Parliament in order to be transformed into inspirational principles for the future structure of the Swiss health care system. The speed with which the project was formulated took away the opportunity for a proper democratic debate. At the consultation stage the Swiss system recognizes stakeholders involved in an inescapable role where they have to realize the consensus and balance necessary for a constitutional amendment. Moreover, an ample parliamentary debate is considered a source of points that cannot be disregarded and that can give an interpretation to the spirit which had animated the drawing up of a draft bill, in case of doubt on its application. In this case the consultation did not take place and the parliamentary debate did not have the space which a change of this degree would have been entitled.

The third problem concerns an important gap in the constitutional text. In fact, the project did not deal with a thorny topic, with consequences contrary to the principle of fiscal equivalence. If approved the constitutional article would have increased the Confederation's power (which, in conjunction with the cantons, would have been entrusted with the responsibility of guaranteeing the citizens' health care supply, together with the historical task of regulating the social insurances), without causing an adjustment of the financial burdens.  

The result of this ballot will not fail to have important consequences on other dossiers which are at present on the agenda of the Swiss Parliament, first and foremost the promotion of the models of managed care and the abolition of mandatory contracting. In fact, from the ballot it can be seen that the Swiss citizens' trust in the health insurers is reduced. In future it could be politically arduous to sustain reforms which will determine a further strengthening of the health insurers' role as players called on to regulate the Swiss citizens' access to health care.

Impact of this policy

Quality of Health Care Services marginal neutral fundamental
Level of Equity system less equitable two system more equitable
Cost Efficiency very low neutral very high
current current   previous previous


Sources of Information

  1. Bundesbeschluss über die Volksinitiative «Für tiefere Krankenkassenprämien in der Grundversicherung» vom 21. Dezember 2007.  
  2. Grundargumentarium des Komitees «Für mehr Qualität in der Gesundheitsversorgung. Gesundheitsartikel JA am 1. Juni»:  
  3. Argumentarium des Bundesamt für Gesundheit  
  4. Anderson, GF., UE. Reinhardt, PS. Hussey and V. Petrosyan (2003). "It's the prices, stupid: why the United States is so different from other countries". Health Affairs 22, 89-105.  
  5. Hsiao, W. (1995). "Abnormal economics in the health sector". Health Policy 32, 125-139.  
  6. Schmidt, U. (2005). "How sustainable is a market-based approach to the German health system?". Euro Observer 7(1), 1-3.  
  7. Gutzwiller, F. (2008). "Ja zur Gesundheitsverfassung - im Interesse der Ärztinnen und Ärzte". Schweizerische Ärztezeitung 89(15), 620-622.  
  8. Gutzwiller, F. (2008). Die Gesundheitsverfassung als liberale Rahmenordnung für bessere Qualität, mehr Wahlfreiheit und wirksamere Kostenkontrolle in unserem Gesundheitswesen, Forum Gesundheit Schweiz: Veranstaltung vom 5. März 2008 zum Verfassungsartikel "Für Qualität und Wirtschaftlichkeit in der Krankenversicherung"  
  9. Schweizerische Konferenz der kantonalen Gesundheitsdirektorinnen und -direktoren (2008). Breites Komitee der Kantone gegen den Verfassungsartikel. Medienmitteilung vom 29.04.2008. Gemeinsame Aktion der Gegner des Verfassungsartikels. Medienmitteilung 20.5.2008 Kantone rufen zur Urne. Medienmitteilung vom 29. Mai 2008. Gegenvorschläge zur Prämiensenkungsinitiative - Auf hohem Seil.

Reform formerly reported in

Anchoring competition in the Constitution
Process Stages: Policy Paper, Idea
Popular initiative for lower insurance premiums
Process Stages: Policy Paper, Idea

Author/s and/or contributors to this survey

Luca Crivelli (proof-reading by Mary Ries)

Suggested citation for this online article

Luca Crivelli (proof-reading by Mary Ries). "Swiss deny more competition in health insurance". Health Policy Monitor, September 2008. Available at