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Urgent measures to curb costs and control premiums

Partner Institute: 
Universit della Svizzera Italiana, Lugano
Survey no: 
(14) 2009
Luca Crivelli (proof reading by Mary Ries)
Health Policy Issues: 
Funding / Pooling, Access, Remuneration / Payment
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no yes no no no


The next few years will be bitter for Swiss insured. In 2010, health insurance premiums will rise by 8.7 percent on average and the increase will not stop there in the years to follow. The federal government presented a plan of urgent measures to contain the future increase of the premiums. The bill was watered down and then even annihilated by Parliament, exposing the present incapacity of the Swiss political system to find a consensus to solve the problem of the explosion of health care costs.

Purpose of health policy or idea

The objective of this policy is to avoid substantial premium increases in 2010 and 2011 by means of specific (narrow) but immediate interventions.

Main points

Main objectives

To control expenditure but in particular to avoid a further rise in mandatory health insurance premiums of the future, since these are considered as politically unsustainable.

Type of incentives

  1. Reduction of fees
  2. Shift of part of the financial burden onto payers other than the insured
  3. Supply control through planning and regulation 
  4. Co-payment to reduce health care demand and moral hazard

Groups affected

Patients as well as good risk from the insurance point of view, Providers (physicians, hospitals, pharmaceutical industry), Health insurers

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Characteristics of this policy

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

Much ado about nothing. The parliamentary debate seems destined to produce nothing or very little. However, it must be emphasized that the urgent measures, if they would be approved, would mainly bring about a transfer of burdens, with a minimal impact on efficiency and quality, but important consequences in terms of worsening of equity.

Political and economic background

In Switzerland in the last two years (2008 and 2009), the growth in health care costs reimbursed by the mandatory insurance was higher than the increase in the revenues collected from premiums (see Figure 1). This evolution reflects at least in part the will of the government to diminish the stock of reserves held by the health insurers by means of the reduction of the minimum legal standard (see report 12/2008).

The explosion of the financial crisis together with its consequences has caused a dramatic deterioration of the financial health of the insurers. The crisis had an impact on health insurers both in terms of worsening the socio-economic determinants of health, such as unemployment and stress, which in turn have caused an increase in requests for health care, as well as in terms of the evolution of the financial markets which has brought about the need to rectify accounting values of the reserves. The insured have also contributed to this evolution by switching their insurers between 2008 and 2009 to a greater extent than in the past ( estimated the percentage of changes at 12 percent against 2 percent in the previous year, see [1]). Due to the choice of cheaper sickness funds and the selection of higher deductibles the total amount of premium revenues has decreased (even in 2008 the revenues collected had stagnated and in 2009 the health insurers recorded revenues which were much lower than expected). As a result, since spring 2009 santésuisse has started to make advance announcements of premium increases to the order of 15 percent for 2010 and 2011, thus engendering a heated political debate in the whole country.

Figure 1: Index of total reimbursed cost, total premium revenues and average premiums

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

Origins of health policy idea

To make amends and avoid the social and political consequences of this premium increase (moreover in a time of economic crisis), the Minister of Health, Pascal Couchepin, summoned the various stakeholders of the Swiss health care system (in particular the cantonal ministers of health and the health insurers, see [2]) to a planning table in March 2009. Then at the beginning of May he illustrated the urgent measures he intended to suggest to the government (see [3]), on 25 May he summoned the representatives of the cantons and the insurers again (see [4]) and on 29 May he submitted the bill containing a package of urgent measures to Parliament; this was linked to the extraordinary steps adopted by the Confederation to combat the economic crisis (see [5]).

As we will discuss in detail later, the measures proposed by the Minister (with a limited validity of three years) will mainly affect the ambulatory sector. In this ambit, in fact, after five years of discussion for none of the reform draft bills drawn up in 2004 (abolition of mandatory contracting, integrated networks of care, increase in co-payment) was a consensus reached. Behind this ineffective outcome there are many conflicts of interest between the political arrays and the various lobbies represented in Parliament.

Thus, resorting to urgent measures was deemed by the Health Minister to be the only step to be taken in order to avoid the expected rise in premiums, as there was no time left to reach consensus on the controversial dossiers on Parliament's agenda which are still to be dealt with.

Further technical measures, with a potential reduction impact mainly on pharmaceutical costs were, in fact, announced in July 2009 (see [6]) and will come into force on 1.1.2010. Since these are measures adopted by amendment of the decree, for which the government alone is responsible, it was not necessary to seek Parliament's approval. 

The urgent measures proposed in the bill of 29 May (and those inserted in the decree) can be grouped into four categories:

1. Measures to control expenditure by tighter fee schedules 
This is a classic method of intervention on expenditure (see [7], Cutler, 2002), whose problem, especially in the case of a fee-for-service payment system, lies in the fact that the operators might react to the price cuts with an increase in quantities. In order to keep their own income constant, the service providers could, in fact, try to neutralize the effect of lower fees by increasing the quantity of services prescribed. If this were so, the impact of the measure on expenditure would be limited to a brief period, namely the time required by the providers to increase the volume of services. 
The Federal Council's bill contains the proposal to entrust greater competences regarding fee reduction to the federal government; at present it is the individual cantons, in very special cases, who can decree a freezing of these fees.

We must remember that in the corporatist tradition in the Swiss health care system fees are the result of a negotiation between third-party payers and provider associations at cantonal level (i.e. health insurers and medical / hospital associations). At the beginning of the year the Minister of Health had already exploited the leeway at his disposal in the matter of fees, when he decided on a reduction in fees relating to laboratory analyses carried out in doctors' surgeries (see [8]); the definition of these prices falls within the competence of the Federal Department of Home Affairs. The amendments came into force on 1 July 2009, attracting vehement criticism on the part of the doctors, who organized a strike and a demonstration on the streets on 24 March in Geneva and Lausanne and on 1 April 2009 in the rest of the country in order to express their disapproval of the Minister's action (see [9]). 
The measures decided on by means of amendments to the decree concern the price of drugs. In order to exert pressure on these prices, a series of expedients were introduced, such as the reduction in the maximum margin allowed to be charged by the retailer, a greater price differential with respect to the original drug when setting the reference price for generic drugs and other technical expedients able to lower the prices of drugs (see [10]).

2. Measures to shift part of the financial burden onto payers other than the insured or to redistribute the burden among the insurers differently
This too is a traditional strategy for cost containment, which does not impact on the total of health care expenditure but lightens the weight of the premiums shouldered by the insured. 
In the first place the proposal contained in the bill concerns an extraordinary increase (for 2010 equal to 200 million, i.e. + ten percent) in the federal grants used to reduce premiums of low-income households. This implies a transfer of a small part of the premium burden of the most fragile households toward public expenditure.

The second measure concerns the optional deductibles. Those who accept a higher deductible assume a greater share of risk in exchange for a premium reduction. Since it is usually good risks who choose these deductibles, the discount is higher than the expected cost to be borne by these individuals, thus determining a lower degree of insurance solidarity sustained by these people. On the one hand, the Federal Council decided to reduce the maximum discount granted to the insured who opt for high deductibles by means of a decree. In 2010 this passes from 80 percent to 70 percent of the deductible differential. If an insured person chooses Fr. 2500 instead of the Fr. 300 ordinary deductible, his/her premium discount from 2010 will total a maximum of Fr. 1540 (70 percent of 2200) instead of 1760. Moreover, in its bill the Federal Council suggests increasing the duration of contracts with optional deductibles to two years.Today, even those who have an optional deductible can switch sickness fund twice a year, in case of a premium increase. After strongly supporting greater individual responsibility through the choice of high deductibles, the Minister of Health is now trying to discourage the process of de-solidarity which is taking place and in some cases is assuming a strategic nature; a high deductible is chosen in year t, health care is not consumed but a discount is granted on the premium; in the following year, t+1, the minimal deductible is chosen and services are consumed for both years. For this reason the bill proposes binding the contracts with optional deductibles to two years, thus preventing these people not only from changing their deductibles but also from switching their sickness funds.

The third measure concerns the most widespread, and the lightest, form of the managed care contract today. At present some sickness funds offer their insured a premium discount of about eight percent if they accept a telephone consulting service before going to the doctor. The bill proposes obliging all insurers to offer a general, independent telephone consulting service, but leaving the insured the freedom of choice to use it or not. In was not completely clear if the present contracts with a premium discount for those accepting the bind of relying on the call center before they consult a physician would continue to exist or not. In the second case the measure would determine a different distribution of the premium burden among the insured if the discount were eliminated.

3. Measures to control supply through regulation 
The measure proposes extending the planning competence of the cantons, which at present is linked to the inpatient hospital sector, also to the hospital services offered in the outpatient sector or day hospitals. It is in this ambit that the greatest growth in expenditure and in the volume of services is recorded. However, while the cantons participate in the financing of the services in the inpatient sector through public expenditure, the costs of the outpatient sector are covered entirely by the health insurers. The Federal Council's proposal is to grant the cantons the faculty to stipulate service contracts with hospitals also in relation to the care offered in outpatients, so as to establish expenditure caps.

4. Measures to reduce health care demand 
In order to decrease the requests for care the bill proposes introducing a tax of Fr. 30 per consultation, which is not taken into consideration in the deductible but in "co-payment". Patients would be called on to pay Fr. 30 out of pocket for every consultation in a doctor's surgery or in hospital casualty. The law provides for some exemptions (children and maternity cases) and defines a maximum number of visits beyond which this tax would no longer apply; in this way chronically ill patients would not be excessively burdened. In exchange, the maximum amount of co-payment to be borne by the insured would be reduced from Fr. 700 to Fr. 600 per annum. The aim of this measure is clearly to deter medical tourism, which is encouraged by the freedom of access to specialists, and in this sense it could determine a reduction in the number of visits, and therefore of the reimbursed cost for medical services. At the same time, however, the intervention determines a transfer of the burdens borne by all those patients who have good reasons to consult the doctor. If it is considered that a normal visit to the surgery costs around Fr. 240, on average a further 15 percent of the costs would be transferred to the patient. 

Initiators of idea/main actors

  • Government
  • Providers
  • Payers
  • Political Parties

Stakeholder positions

As far as the stakeholders' position is concerned, since in the name of symmetry of sacrifices the bill causes at least one disadvantage to all parties involved (service providers, insurers, patients, insured, public finances), it is not surprising that it was criticized at least for some of its aspects by almost all stakeholders. In fact, the aspects of the bill considered controversial were not always the same, depending on the group of interests involved. In general, the speed with which the consultation process was carried out was not appreciated; only a couple of weeks to gather the stakeholders' points of view is an unusually short period of time in Switzerland. And this was the case even though the proposed measures will not come into effect in time to change the 2010 premiums since insurers have to set premiums for the following year before the end of July; they will only be able to have an influence in the years to come.

Among all the measures proposed the least controversial were without doubt the obligation for the insurers to offer a telephone consulting service for their members and the increase in federal subsidies for premium reduction; the first was opposed only by santésuisse and by the liberal party (FDP), the second was accepted by the various groups of interest, but criticized by the right-wing parties. Santésuisse expressed a favorable opinion regarding the other measures proposed in the bill (see [11]) whereas the liberal party feared the loss of an important element of competition among insurers if all sick funds were pushed to offer the same service by establishing a medical call center. In particular, the Association of Swiss Hospitals (Hplus) opposed the planning of outpatient hospital care, the introduction of the Fr. 30 tax and the intention to provide the Federal Council with the power of decreasing fees (see [12]). The FMH expressed a very negative opinion about the tax for consultations and the decrease in fees, while it would like to see stricter regulations concerning the hospital outpatient sector, although this should occur within a different legal framework (see [13]). The cantonal ministers of health showed opposition especially to the transfer of competences to the Confederation in the field of fee regulation; they would prefer to see the canton's leeway increasing in the ambit. Moreover, they consider further in-depth examination on the details of introduction of the Fr. 30 tax necessary; it should also be clear that the new tasks taken on by the cantons within the ambit of outpatient hospital planning will not imply any obligation on themselves to participate financially (see [14]). The left-wing and the FMH would approve the suppression of the optional deductibles, which is a much more drastic measure than blocking the contracts for two years, as proposed in the bill.

On 10 June 2009, at the end of the summer session, the National Council dedicated a two-hour debate to the announced increases in premiums and to the Federal Council's urgent proposals (see [15]). A week later an interparty working group presented some corrections to these proposals in a press conference, implying, however, that there were good starting points in Parliament for a compromise to be reached and for the outlined savings to be realized, so as to avoid huge premium increases in the years to come (see [16]).

Actors and positions

Description of actors and their positions
Minister of Health at federal levelvery supportivevery supportive strongly opposed
Cantonal ministers of healthvery supportiveneutral strongly opposed
Medical Association (FMH)very supportivestrongly opposed strongly opposed
Swiss hospital Associationvery supportivestrongly opposed strongly opposed
santesuisse (health insurer association)very supportivesupportive strongly opposed
Political Parties
left-wing partiesvery supportivestrongly opposed strongly opposed
center and right-wing partiesvery supportiveopposed strongly opposed

Influences in policy making and legislation

In the Parliamentary session in September the National Council examined the bill. The Committee of Social Security and Health (CSSH) of the National Council recommended that the plenum reject the Fr. 30 tax for the first six consultations as well as the extraordinary increase in federal funds to reduce premiums; it did, however, recommend accepting the other measures of the bill as well as four new proposals put forward by the interparty working group established in June: (1) forbidding the health insurers to offer commissions and to carry out telephone advertising; (2) in the absence of a uniform fee system at national level the cantons should apply a uniform value point valid for the whole canton (nowadays several fee communities co-exist in the same canton) and they should keep the price difference between cantons at below ten percent; (3) the right to substitute a prescription drug with another less expensive one if the active principles are identical and their therapeutic properties are equally suitable; (4) doubling the co-payment from 10 to 20 percent for those who consult a specialist directly, i.e. without first going to their general practitioner.

The National Council (see [17]) followed the recommendations of the commission, whose spokesperson had defined them as "measures in homeopathic doses to eliminate perverse incentives", and rejected the Fr. 30 tax and the extraordinary increase in federal funds. But it did decide to follow the recommendations of the president of santésuisse, also a parliamentarian, not to grant the cantons the mandate to plan and regulate the hospital outpatient sector, thus causing a further important deflation in the urgent decree proposed by the Federal Council. Moreover, it decided to block contracts with optional deductibles for three rather than the two years proposed in the bill and to increase the patients' contribution for a day spent in hospital, shifting another small share of expenditure to the patients. Finally, the lower house accepted the new measures drawn up by their commission almost entirely, denying only the obligation to bring the price differential across cantons, relating to a given national fee schedule, to below ten percent.

On the other hand, the attempt of some members of the commission to insert at the last moment the suppression of mandatory contracting as of 2012 by means of the urgent decree failed. With a close vote (87 against 80) the National Council preferred not to take such an important step within the ambit of a temporary measure linked to an urgent decree; we must remember that the controversial dossier has been on Parliament's agenda for many years. A curious detail worth mentioning is that the members of the National Council granted the Confederation the right to assume the vaccination costs in case of a phase six pandemic.

At this point the dossier passed into the hands of the Committee of Social Security and Health (CSSH)  of the Council of States, called on to draw up recommendations for the vote of the high chamber during the winter session. If approved, the urgent measures would come into force in 2010 and would lapse at the end of 2012. At the end of October, the Commission made its recommendations known. It will propose that the members of parliament also reject the obligation for the sickness funds to set up medical call centers, thus causing a further emptying of the bill (see [18]). Backpedalling too on the duration of the contracts with optional deductibles: once again two, not three years.

The Commission would prefer to introduce the other measures in a lasting way as proper law amendments (see [19]) and not by means of the urgent procedure, which can have only temporary value. For this reason, it recommends abandoning the urgent procedure in favor of lasting law amendments, thus nullifying the proposal of the Health Minister, Couchepin, who, in the meantime has resigned from this office and has been replaced by a new Federal Councilor, elected by the Federal Assembly in September. A fundamental aspect of the Commission's proposal is the generalized doubling of the insured's co-payment share, from ten to twenty percent; in this way it would not be limited to the direct choice of the specialist as proposed by the National Council. This principle would be linked to the reform of the managed care models; only those accepting affiliation to an integrated network of care with financial responsibility would continue to benefit from a co-payment of ten percent. All the others will have to take on the burden of 20 percent; this should act as a nudge for the insured and convince Swiss citizens to opt for managed care models in great numbers. A second measure intends to introduce a reference price on drugs, so that a given active principle could be reimbursed at no more than ten percent higher than the minimum price offered on the market. On the other hand, it is recommended abandoning the idea of giving the Federal Council the power to reduce fees, which is the last proposal left of the bill presented by Couchepin last May.

Legislative outcome


Actors and influence

Description of actors and their influence

Minister of Health at federal levelvery strongstrong none
Cantonal ministers of healthvery strongstrong none
Medical Association (FMH)very strongneutral none
Swiss hospital Associationvery strongneutral none
santesuisse (health insurer association)very strongneutral none
Political Parties
left-wing partiesvery strongstrong none
center and right-wing partiesvery strongstrong none
Minister of Health at federal levelsantesuisse (health insurer association)Cantonal ministers of healthcenter and right-wing partiesMedical Association (FMH), Swiss hospital Associationleft-wing parties

Positions and Influences at a glance

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

Expected outcome

The events narrated in this report are paradigmatic of the present political situation. Everyone agrees that the increases in health care expenditure and health insurance premiums are unsustainable. But when it is a question of intervening in a concrete way it is not possible to find a majority political consensus. The Swiss health care system seems to be incapable of co-habiting with the two health policy philosophies which inspired the 1996 Federal Health Insurance Act: solidarity in cost financing, state planning and regulation, on the one hand; market competition and individual responsibility, on the other. Today the political world is seen to be strongly divided over which philosophy should be embraced in the search for reforms; the center-right would prefer to liberalize health care further, as it recognizes that the cause of the present incapacity to control expenses and of the lack of incentives toward a rational consumption of care is to be found in public intervention and insurance mutuality and solidarity. On the other hand, the center-left is convinced that the problem is the failures both on the health care and health insurance markets and that the solution is stronger, more centralized public regulation. In the last few days the discussion has been centering again around the proposal of a single sick fund (see [20] and [21]). Since it is incapable of reaching a consensus, Parliament thus ends up hostage of the lobby interests, which earn huge rents in the health care sector and do their upmost to defend them.

Impact of this policy

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


Sources of Information

  1. zu den Krankenkassenwechseln 2009
  2. Medienmitteilung des Bundesamt für Gesundheit (23.03.2009). Obligatorische Krankenversicherung: Erste Gespräche am Runden Tisch geführt
  3. Medienmitteilung des Bundesamt für Gesundheit (06.05.2009).
  4. Medienmitteilung des Bundesamt für Gesundheit (25.05.2009).
  5. Botschaft betreffend die Änderung des Bundesgesetzes über die Krankenversicherung (Massnahmen zur Eindämmung der Kostenentwicklung) vom 29. Mai 2009
  6. Medienmitteilung des Bundesamt für Gesundheit (01.07.2009)
  7. Cutler, D. (2002), Equity, efficiency and market fundamentals: The dynamics of international medical-care reform, Journal of Economic Literature, XL(3), 881-906
  8. Bundesamt für Gesundheit. Bulletin 12/2009, pp. 206-209
  9. Mehr Aktionstag als Streik in der Westschweiz. Lautstarker Protest von Ärzten im Waadtland und in Genf , NZZ (24.03.2009)
  10. Verordnung über die Krankenversicherung (KVV), Änderung vom 1. Juli 2009 sowie Faktenblatt "Kostensenkende Massnahmen im Bereich der Medikamente" (1. Juli 2009)
  11. Santesuisse. Dringliche KVG-Revision. Stellungnahme santésuisse zum Revisionspaket (Fassung vom 11. Mai 2009).
  12. H+ Die Spitäler der Schweiz. Vernehmlassungsantwort Massnahmen zur Eindämmung der Kostenentwicklung (13.05.2009)
  13. FMH. Stellungsnahme zu den Massnahmen zur Eindämmung der Kostenentwicklung (15.05.2009)
  14. GDK-CDS. Dringliche Revision des KVG: Stellungnahme zu den Vorschlägen des EDI (15.05.2009)
  15. Amtliches Bulletin. Nationalrat - Sommer Session 2009 - Zwölfte Sitzung. Dringliche Interpellation Fraktion CVP/EVP/glp. Krankenversicherung. Sofortige Massnahmen zur Bekämpfung der Prämienexplosion
  16. Überparteilicher Effort zur Senkung der Gesundheitskosten. Alternativen und Ergänzungen zu den Sofortmassnahmen des Bundesrats, NZZ, 137 (17.06.2009), p. 15
  17. Amtliches Bulletin. Nationalrat - Herbstsession 2009 - Dritte und Vierte Sitzung. KVG. Massnahmen zur Eindämmung der Kostenentwicklung
  18. Dauerhaft statt dringlich. Höherer Selbstbehalt und tiefere Medikamentenpreise in der Krankenversicherung, NZZ, 244 (21.10.2009)
  19. Kurswechsel bei Massnahmen für tiefere Gesundheitskosten. Kombination mit Managed-Care-Vorlage angestrebt, NZZ (12.11.2009)
  20. SP setzt wieder auf Einheitskasse in der Krankenversicherung, NZZ (3.11.2009).
  21. Santésuisse bereitet sich auf den Kampf gegen Einheitskasse vor, NZZ (8.11.2009)

Author/s and/or contributors to this survey

Luca Crivelli (proof reading by Mary Ries)

Suggested citation for this online article

Luca Crivelli. "Urgent measures to curb costs and control premiums". Health Policy Monitor, November 2009. Available at