The end in sight for hospital subsidies

Report: André Weissen

The financing of hospital treatments in Switzerland is particularly complex. The current health insurance law (KVG) has no easy answers. Who covers the cost of treatment differs from district to district, depending on whether a treatment is carried out in a public or private hospital, whether carried out within a resident’s own district, whether out- or in-patient care or whether, or not, the hospital is listed on a district’s official list of providers.

In the case of public (= district) hospitals or those that receive public subsidies, the state and insurers share costs – but the ratio differs from district to district. Mostly, private hospitals do not receive subsidies, but even here there are exceptions. This situation all too often leads to problems and ambiguities when it comes to who has to pay how much for which type of hospital treatment.

KVG revision

During the last revision of the health insurance law an overhaul of the regulations on in-patient treatment was finally decided. From 1st January 2012 these changes will apply all over Switzerland. The most important alteration is that there are now standardised guidelines as to the extent the state (i.e. the districts) has to pay for treatment. Normally, the district will pay 55% of costs and the insurers bear 45%, which will be calculated based on DRGs (diagnosis related groups). Therefore, all Swiss hospitals will charge the same price for any specific type of treatment. Patients will also be given the right to choose a hospital freely, right across Switzerland.

At the same time, the differentiation between public and private hospitals will be abolished. There will be a free market with standardised conditions for all hospitals. This entails significant changes for the public hospitals. The subsidies received so far will cease to exist; public hospitals will literally be thrown onto the open market. From then on, they will be responsible not only for their operating costs but also for infrastructure, investments and reserves, because the state will no longer be permitted to help.

DRGs with investment percentage

This change of system will be made easier because the calculation of the DRGs in Switzerland (Swiss DRF) is to include an additional, percentaged amount for investments for each diagnosis. The incentive for hospitals to optimise their business and plan future investments wisely is therefore increased significantly.

Now, a year and half before it begins, private hospitals still have a head start, as they have always had long-term investment strategies. On the other hand, the public hospitals had to make any impending investments through the (often protracted) public purchasing process. Often, financing for new equipment was approved too late, sometimes the acquisition of new equipment was rejected for political reasons.

From 2012, the new ‘freedom’ for public hospitals will only succeed if they are allowed to be on a par with private hospitals right from the start when it comes to planning. The districts will then be obliged to ensure that the infrastructure of their hospitals is up to date and to equip them with start-up capital for investments during the transition period. Although the hospitals will receive an added, percentaged amount for investments for each diagnosis from 1st January 2012, it will obviously take some time to accumulate enough money in this way to finance the acquisition of, for instance, a new MRI scanner.

The objective

The objective of these changes is clear – to achieve simplification, comparableness, benchmarking, quality improvements and control, free competition etc. Whether or not these ambitious targets will be achieved is still written in the stars. However, it would be good to think that the Swiss will soon be able to benefit from the same quality of medical care without having to continue to pay the extremely high insurance premiums.


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