Switzerland’s health insurance market


Twenty nine years ago, the Swiss health sector faced two key problems: rising inequality and rising costs.  Both problems resulted from the rise of for-profit insurance companies. Traditionally, the Swiss bought into private insurance plans through their employers. Because these insurers were not selective about whom they covered, very nearly all employed people had health insurance. In the 1980s, however, the few for-profit insurance firms began buying up the old nonprofit plans. Tending to their bottom line, these firms increased premiums, refused to cover high-risk people, and denied expensive claims.

By 1993, spending had skyrocketed, even as coverage had dropped. Swiss per-capita spending on healthcare was second only to the United States. Moreover, nearly 400,000 Swiss, or about 5% of the population, did not have health insurance. For some, healthcare was catastrophically expensive or even unaffordable.

To the Swiss, this was unacceptable. Switzerland was not only a rich country—in 1993 it had a GDP per capita equivalent to $36,027 2014 USD—but also a country that believed strongly in the principle of solidarity. The fact that healthcare was accessible to some but not to all was a violation of a core national value. The problem would only worsen if costs continued to rise.

Health Reform

In an effort to strengthen solidarity and contain costs, the Swiss passed a major healthcare reform bill called LAMal in 1994. With LAMal, policymakers struck a balance between the two Swiss values of capitalism and solidarity.  Inspired by the French and German systems, it established meaningful universal coverage through a regulated private market.

Universal Access to the ‘Basic Package’

The primary goal of reform was to ensure all Swiss citizens access to essential care. In order to accomplish this, the law requires that all individuals purchase health insurance from a private insurer. Insurers must charge all people the same price for a given health plan; individuals who cannot afford the premium even for a basic plan receive tax-financed subsidies from their cantons. Insurers are required to accept all applicants and cover them for a ‘basic package’ of services. The list of services is determined by the federal government on the bases of appropriateness, medical effectiveness, and efficiency.

Because insurers must accept all applicants and charge them the same premiums, it is necessary to equalise risks between insurers. A government body is therefore responsible for redistributing funds from lower to higher risk health plans. The transfers are determined on the basis of age and sex of enrollees.

Containing Costs While Maintaining Choice

The second goal of reform was to contain costs without limiting consumer choice more than necessary. The reform tried to control costs by limiting profit and preventing over-utilisation. Profits are kept low in two ways. First, insurers are prohibited from making a profit on basic plans that cover no more than the basic package. Second, the various insurers are supposed to compete with each other to drive down premiums. Patients are also discouraged from getting unnecessary care in two ways. First, patients can only seek care from providers that are in their canton of residency and are accredited to receive reimbursement for providing basic treatment. Second, deductibles and copayments share the immediate financial burden with the patient. The federal government sets a minimum and maximum deductible of about $300 and $2600 USD; the insurer sets the level within this range. Once the deductible has been met, the patient still pays 10% of the remaining costs, unless these costs amount to more than about $730 over the year.

In order to allow individuals the freedom to choose from among a diverse range of options, everyone also has the right to purchase supplementary insurance to cover anything beyond basic care. For these supplementary plans, insurers are permitted to make a profit and deny certain individuals coverage. This gives individuals greater ability to choose the care they want—yet that freedom comes at the expense of equality, since not all Swiss are able to afford supplementary plans.

Service provision and payment

Healthcare service provision is generally organised at the cantonal level, with only a moderate amount of federal supervision. Cantons have relatively little power over primary care provision, while they have increasingly more over hospital-based care. In all cantons, primary care providers typically work in independent practices and are paid by insurers on a fee-for-service basis. Hospital-based care provision and payment, however, varies greatly between cantons. Until 2012, hospitals in most cantons were paid on a per diem basis. Public hospitals were also eligible for cantonal funding while private hospitals were not. A new reform law passed in 2007, however, has caused all hospitals to receive payment from insurers through a diagnosis-related group (DRG) system. The DRG system compensates the hospital on a case basis instead of a fee-for-service model. This system incentivises use of best practices and discourages long hospital stays.

Outcomes of Reform

The reforms were successful at expanding access to care while maintaining quality and choice, but costs remain high.

Health indicators have tended to increase since the reform, although only marginally because they were very high to begin with. From 1994 to 2012, life expectancy at birth increased from 78 to 83 years, giving Switzerland the fifth highest life expectancy in the world. Similarly small improvements were observed in the maternal mortality ratio and infant mortality rate.

Health system performance indicators have also been favourable. The 5% of the population that was uninsured in 1993 is now covered, there has been about a 25% increase in the number of physicians per capita, and patient satisfaction indicators are unusually high.

Costs, however, have increased, and out-of-pocket spending has decreased only marginally. Between 1995 and 2012, health expenditure per capita more than doubled in real terms. Over the same period, total health expenditure and public health expenditure as percents of GDP grew from 9% to 11% and 5% to 7%, respectively. Meanwhile, out-of-pocket expenditure fell from its 1995 level of 33% of health expenditure, but only to 28%.

Remaining Challenges and Recommendations

Containing costs is the most critical issue in the Swiss healthcare system, but both preparing for the shifting burden of disease and improving data on health inequities are also important objectives.

The primary driver of high costs has been the expansion of the basic service package without attention to cost-effectiveness. The federal government currently determines service inclusion on the bases of effectiveness, appropriateness, and efficiency, but the process is not transparent. Initially conceived as a package of truly basic services, the package now includes a far wider range of services, some of which are not cost-effective. In order to contain growing costs while providing the maximum health benefit, the federal government should add cost-effectiveness to its list of criteria.

A further consideration is Switzerland’s ageing population and shifting burden of disease. As the populace has become more sedentary and adopted a less balanced diet, obesity, hypertension, and other risk factors for noncommunicable disease have risen. At the same time, new medical technologies keeping people with chronic diseases alive longer. As the burden of chronic disease increases, demands on the hospital system are likely to surpass current capacity. The best response, however, is not to expand hospital capacity. Instead, more emphasis should be placed preventing disease through public health efforts and primary care.

Finally, new and better data must be collected to determine the level of inequity in the system. Because each of the cantons functions semi-autonomously, there is not strong central data collection. Improved data collection and sharing systems are needed to determine whether the systems’ fragmentation is masking important health inequities[1]Switzerland Health system review.

The LAMal’s Challenges

A number of challenges remain. The costs of the health care system are well above the EU average, in particular in absolute terms but also as a percentage of gross domestic product (GDP) (11.5%). Mandatory Health Insurance (MHI) premiums have increased more quickly than incomes since 2003. By European standards, the share of out-of-pocket payments is exceptionally high at 26% of total health expenditure (compared to the EU average of 16%). Low and middle-income households contribute a greater share of their income to the financing of the health system than higher-income households. Flawed financial incentives exist at different levels of the health system, potentially distorting the allocation of resources to different providers. Furthermore, the system remains highly fragmented as regards both organisation and planning as well as health care provision. 

Similar to many of its neighbours, Switzerland’s two most important causes of mortality are cardiovascular diseases (CVD) and cancers, despite drops in mortality rates for both in recent decades. The incidence of some infectious diseases, including for HIV, is higher in Switzerland than the EU average. 

Organisation and governance 

The Swiss health system is highly complex, combining aspects of managed competition and “corporatism” (the integration of interest groups in the policy process) in a decentralised regulatory framework shaped by the influences of direct democracy. This explains the sharing (and some would say fragmentation) of decision-making powers between: 

1)  the three different levels of government (the federal level, the cantons, and for social services the municipalities); 

2)  recognised civil society organisations (“corporatist bodies”), such as associations of health insurers and health care providers; and 

3)  the Swiss people, who can veto or demand reform through public referenda. 

The federal setup of the country gives all power to the cantons except in areas where the constitution has explicitly assigned competences to the federal level. Historically, the federal level had very little legislative power in the area of health. This led to the emergence of different patterns of financing and health care provision across the country. Today, as the result of a slow but steady process of greater centralization over recent decades, the federal level plays an important role in regulating most areas of the health system, including: 

1) the financing of the system (mandatory health insurance (MHI) and other social insurances); 

2) the quality and safety of pharmaceuticals and medical devices; 

3) public health (control of infectious diseases, food safety, some areas of health promotion); and 

4) research and training (tertiary education, training of non-physician health professionals). 

Switzerland ensures access to health care through a system of MHI, which has been compulsory for all residents since 1996 (although some cantons had compulsory insurance as early as 1914). Citizens who want to purchase MHI cannot be turned down by insurers, and cantons provide subsidies for people on low incomes (although the nature and level of these vary widely by canton). The standard benefits package is regulated by federal legislation and includes most general practitioner (GP) and specialist services, as well as inpatient care and services provided by other health professionals if prescribed by a physician. 

Cantons are responsible for securing health care provision for their populations, although they may also include hospitals from other cantons on their lists of providers, and they finance about half of inpatient care. Cantons are also in charge of issuing and implementing a large proportion of health-related legislation, and they carry out prevention and health promotion activities. In order to coordinate their activities, in particular for highly specialised medical care, the cantons work together in the Conference of the Cantonal Ministers of Public Health (GDK/CDS). 

Corporatist actors, in particular associations of MHI companies and providers (associations of physicians and hospitals) play an important role in the Swiss health system. They are charged with determining tariffs for the reimbursement of services, they negotiate contracts and they oversee their members at the cantonal level. 

Popular initiatives and referenda have a pervasive influence in shaping health policy-making. Certain reforms of the health care system require a positive referendum by the Swiss population, in particular when concerning the reallocation of responsibilities between the three levels of governance. In addition, popular initiatives often drive legislative activity, responding to citizens’ demands for change. 


In 2013, total health expenditure (THE) in Switzerland was 11.5% of GDP, one of the highest shares in Europe and well above the EU average of 9.5%. In Europe, only the Netherlands and France spent an even larger proportion of GDP on health. When looking at per capita spending on health, Switzerland spends US$ 6187 (when measured in purchasing power parities, PPP) approaching double the EU average of US$ 3379; in Europe, only Luxembourg and Norway spend more. 

Financial flows are fragmented and split between different government levels and different social insurance schemes. Resources are collected mostly through taxes (32.4% of THE in 2012) and MHI premiums (30.0% of THE) but a considerable part of tax resources are subsequently allocated to the different social insurance schemes, in particular as subsidies to lower- and lower middle- income households for the purchase of MHI. As a result of this reallocation, MHI companies are the largest purchasers and payers in the system, financing 35.8% of THE. The next largest components are out-of-pocket (OOP) payments, amounting to 26.0% of THE, and government spending (mostly from the cantons) covering 20.3% of THE. By European standards, the share of public spending is relatively low at 66% of THE (compared to the EU average of 76%), while the share of OOP payments is exceptionally high at 26% of THE (compared to the EU average of 16%). Private financing is the main source of funding for dental care, and is also substantial in ambulatory care and long-term institutional care; public financing is predominant for hospital services. 

MHI premiums are community-rated, i.e. they are the same for every person enrolled with a particular insurance company within a given region (meaning a canton or part of a canton) independent of gender or health status. Progressively higher premiums apply to three different age classes: (1) from 0 to less than 19 years; (2) from 19 to less than 26 years; (3) 26 years and above. In 2012, 29% of the Swiss population had to pay a reduced premium only, or no premium at all. MHI premiums are collected by MHI companies and are subsequently reallocated between the MHI companies, based on an increasingly refined risk-equalisation mechanism that takes account of age, gender, prior hospitalisation and (from 2017) pharmaceutical expenditure. 

Additional voluntary health insurance (VHI) plays a rather small and declining role, financing about 7.2% of THE in 2012. 

MHI companies offer different types of MHI policy, which vary with regard to the size of deductible (the amount that people have to pay themselves before their MHI coverage kicks in) and restrictions on their choice of provider. The minimum annual deductible is SFr300 (around €306) for adults, while the maximum deductible is SFr2500 (around €2550). In addition, a 10% co-payment rate applies to all services (which can not be covered by voluntary insurance). However, total user charges (deductible plus co-payment) are capped at SFr1000 (around €1020) or SFr3200 (around €3262), depending on the size of deductible chosen. Insurance plans with some restriction of choice of provider (e.g. managed care-style insurance) have gradually become the dominant form of insurance in Switzerland, with more than 60% of insured opting for these plans in 2013; this proportion was below 10% in 2003. MHI cannot be profit-making, but the same companies may also offer VHI, which is allowed to make profits; many MHI companies offer such products as well. 

Fee-for-service is the dominant method of provider payment in Switzerland. The tariffs for ambulatory care and, since 2012, also for acute inpatient care, are based on national frameworks developed jointly by associations of insurers and providers. For inpatient rehabilitation and inpatient psychiatry, work on developing national tariff frameworks is ongoing. For long-term care, MHI pays a contribution that depends on the care needs of the patient; the patient pays a contribution capped at 20% of the MHI contribution; and the canton covers the remaining costs. 

Physical and human resources 

There are 293 hospitals in Switzerland, which can vary greatly in size from those with 2–3 beds to more than 2000 beds. On average, hospitals are rather small when compared with other countries, but the number of hospitals per population is comparatively high. About 21% of hospitals are publicly owned and managed either as part of the administration or as public companies; 25% are run by a non-profit organisation, which can be a foundation, an association or a cooperative; and more than half of all hospitals are privately owned (including stock companies, limited liability companies and individuals). Nevertheless, almost two thirds (about 65%) of all beds are in public or non-profit hospitals. 

The number of acute care hospitals decreased by about 50% between 2000 and 2013 and the number of beds in acute care hospitals was reduced by about 20% over the same period of time. There were 2.9 beds in acute care hospitals per 1000 people in Switzerland in 2013, which was below the EU average of 3.6 beds per 1000 people. Average length of stay in acute care hospitals fell by 37% since 2000 to 5.9 days in 2013, which was also below the EU average of 6.3 days. 

Owners of health care institutions are responsible for managing capital investments and, since the introduction of payment based on diagnosis-related groups in 2012, hospital investments are – at least in theory – also financed from revenues received for services. However, cantons sometimes still have dedicated budgets for investment as they did before the introduction of this system. Switzerland also has one of the highest densities of medical imaging technologies in Europe, alhough this varies considerably across cantons. 

The number of physicians and nurses has increased relatively strongly over the past two decades, while the number of dentists, pharmacists and midwives has remained more or less stable. With 4.1 physicians and 17.7 nurses (including midwives) per 1000 people in 2013, Switzerland had the highest number of nurses and the second highest combined number of physicians and nurses in the entire European Region after Monaco; for comparison, the EU averages are 3.5 physicians and 9.1 nurses per 1000 people. In contrast, the number of dentists, pharmacists and midwifes per 1000 people are low in comparison to EU averages. The composition of the medical workforce is changing noticeably, with older male physicians being increasingly replaced by younger female physicians. There is a high reliance on foreign-trained health workers; almost 30% of all active physicians in Switzerland held a diploma from a foreign medical university in 2013, mostly from Germany. 

Provision of services 

Responsibilities for the legislation, implementation and supervision of public health services are split between the federal level and the cantons. Consequently, public health activities are not well coordinated and vary greatly across cantons. 

Ambulatory care is provided mostly by self-employed physicians working in independent single practices offering both primary care and specialised care. In general, patients have a very large degree of freedom concerning choice of physician and hospital. Easy access to all levels of care, including inpatient care, without need for a referral, has been a key characteristic of the Swiss health care system. However, the past decade has seen a rise in physician networks and health maintenance organisations (HMOs), which contract with insurers to provide care. In 2012, about 20.8% of all insured were estimated to be insured by either an HMO plan or a physician network plan. Such plans include gatekeeping by a GP. 

Acute care hospitals provide inpatient care and play an increasingly important role for the provision of ambulatory and day care services. Traditionally, choice of hospital was somewhat restricted by cantonal borders. However, since the implementation of a hospital financing reform in 2012, patients can choose any hospital located outside the canton of residence as long as the hospital is included on the hospital list of the canton of treatment. Nevertheless, reimbursement follows the rules of the canton of residence, which means that it is limited to the level of costs that would have had to be paid if the patient had been treated in the canton of residence. 

Cantons are responsible for the organisation of long-term care, rehabilitation care, palliative care and psychiatric care, but may delegate responsibility to municipalities. In addition, informal carers play a substantial role; about 4.7% of the population are estimated to provide informal help on a daily basis, and an additional 9.6% are estimated to provide informal help about once a week. 

Better integration of care across different institutions and providers has been under discussion for some years, especially for mental health care activities, but progress in this direction remains limited. 

Expenditure on pharmaceuticals was €652 per head in 2012 – the highest of all European countries for which data are available. Considerable efforts have been made in recent years to reduce the relatively high retail prices in Switzerland and to increase the use of generics. The market share of generics as a proportion of all reimbursed pharmaceuticals in terms of volume rose from 6.1% in the year 2000 to 23.9% in 2013, but remains far below the share of generics in other countries, such as Germany (78.2% in 2012) or Austria (48.5% in 2012). A Swiss particularity is that pharmaceuticals are not only distributed by pharmacies but – in some cantons – also by so-called self-dispensing doctors, who sell about 24% of all sold pharmaceuticals in Switzerland (in terms of value) through their in-practice pharmacies. 

Principal health reforms 

Since the year 2000, numerous reforms have been made, which have optimized the MHI system, changed the financing of hospitals, improved regulations in the area of pharmaceuticals, strengthened the control of epidemics, and harmonized regulation of human resources across the country. 

Making health reforms in Switzerland is difficult as a broad consensus of the main stakeholders is required. Reaching such a consensus is complicated, sometimes impossible, and almost always takes a very long time. Yet, the complex political and institutional structure of the country is very successful at negotiating compromises that are supported (or at least not opposed) by all relevant stakeholders. This leads to lengthy reform processes but also to solid reforms, which are – once implemented – almost never reversed. This characteristic feature of policy-making in Switzerland is also supported by a high degree of political and personal continuity within political institutions. 

One important trend across all reforms since 2000 (and even before that) has been a tendency towards more harmonization of national health policymaking. Many reforms have strengthened the role of the federal government, which has obtained more influence over hospital inpatient care provision, insurance supervision and public health. In addition, cantons are increasingly coordinating their activities, and this has led to a stronger role for the Conference of the Cantonal Ministers of Public Health, in particular in the area of highly specialised medical care. Nevertheless, reforms strengthening the federal level are often highly contested as cantons are reluctant to allow more federal intervention in health care, as they perceive this to be one of their core areas of responsibility; other stakeholders exploit and support this cantonal attitude. A consensus seems to be emerging that a greater role for the federal level is necessary, at least for coordination of activities. Most current reform proposals confirm this trend towards more influence for the federal level, although the constitutional distribution of competences will likely remain untouched. 

Future reforms are guided by the federal government’s Health 2020 strategy paper, which outlines the reform priorities for the coming years. Three particularly important areas of reform are: (1) improving the use of information; (2) improving planning of ambulatory care; and (3) improving health care provision for people with specific needs. Given the lengthy process of making health reforms, most of these areas have already been on the political agenda for quite some time, but it will still be several years before institutional or legislative changes materialise. 

Assessment of the health system 

Population health indicators are very good in Switzerland. Patients are highly satisfied with the health system, perceive quality to be good or very good, and there are virtually no waiting times. Avoidable hospital admissions are relatively low and OECD quality indicators confirm that health care quality is high – although not exceptional. 

Nevertheless, there is room for improvement, in particular concerning the health care financing system. Financial protection of Swiss households from the costs of medical care is good – and better than in many European countries when all forms of social protection are taken into account. However, the very high share of OOP payments – related to the exclusion of certain services from coverage (notably dental care) and to the relatively high user charges – means that financial protection is more limited than, for example, in Austria, Germany or the Netherlands. Surveys indicate that almost 3% of the poorest income quintile have an unmet need for medical examination or treatment because of costs – a share that is considerably higher than in Austria, Germany or the Netherlands. 

Low-income households contribute a greater share of their income to the financing of the Swiss health system than higher-income households. In addition, individuals and households at the same level of income often contribute very different shares of their income depending on their place of residence. The cantonal mechanisms of premium subsidies do not sufficiently reduce the financial burden on lower-income households and they contribute to the variation in financial burden depending on the place of residence. 

In view of escalating costs, it is very likely that resources could be used more efficiently. Research indicates that the variation in expenditures across cantons is at least partially related to supplier-induced demand, resulting from flawed incentives of (unlimited) fee-for-service reimbursement, subsidized hospital investments and fragmentation of provision. So far, there is limited use of independent health technology assessments (HTA) to inform coverage decisions and to limit expenditures on existing and new services of uncertain benefit. The use of medical guidelines could be strengthened to help professionals “choose wisely” when examining and treating patients. 

In addition, the large number and the small size of hospitals in Switzerland implies that there is considerable room for efficiency improvement by exploiting economies of scale. Furthermore, prices of pharmaceuticals remain higher than in Austria, the Netherlands or France, while the share of generics remains relatively small. Finally, efficiency and quality could be increased by systematically addressing patient safety issues and by improving coordination of care. 


The Swiss health system is highly valued by patients and scores very well on a broad range of indicators. However, financial protection and fairness of financing could be further improved and achieving greater effectiveness and efficiency of the system remains an important challenge. Controlling the high and rising costs of MHI premiums, which have increased more quickly than incomes since 2003, is likely to require a more systematic and stringent process of HTA, which could assess products and services for both inclusion in and removal from the MHI benefits basket. Greater use of medical guidelines, investments in patient safety, and the reduction of waste by improving coordination within and between different levels of care would further improve efficiency. The trend towards more managed care-type insurance may help to realign the incentives of insurers and providers, and current reform plans for better planning of ambulatory care might eventually lead to a more needs-based distribution of providers. 

Improving financial protection and fairness of financing is becoming more important because rising premiums and OOP payments place an increasingly large financial burden on households with lower and middle incomes. Current discussions about possible financing and payment reforms aiming to change the way in which cantons and MHI companies split the bill of health care provision could potentially address not only the distortion of incentives resulting from the current system of financing but also improve horizontal and vertical equity. However, given the tradition of slow and incremental reforms in Switzerland, more radical changes are very unlikely. 

Finally, strengthening disease prevention and health promotion with a focus on non-communicable diseases remains an issue. Favourable living conditions in Switzerland, such as good housing conditions, a high-quality education system and low rates of unemployment contribute to healthy living conditions. However, prevention of non-communicable diseases, in particular through health promotion and health education, could potentially have a large impact on further improving the very good health status of the population, while avoiding the costs associated with the treatment of these diseases[2]Switzerland Health system review

The Federal Office of Public Health (FOPH)

The Federal Office of Public Health (FOPH) is part of the Federal Department of Home Affairs. Along with the cantons it is responsible for public health in Switzerland and for developing national health policy. 

The most important responsibility of the FOPH is the health promotion of all persons living in Switzerland.

On an international level, the FOPH represents Switzerland in all health-related issues towards other states and international organisations.

On a national level, the FOPH supervises the health of the population, in cooperation with the cantons. It plays a leading role in the shaping of the national health policies. The activities of the FOPH are manifold. Among other things, the FOPH is responsible for:

The maintenance and development of the social health and accident insurance. The FOPH defines which benefits have to be covered by the compulsory health insurance and supervises the social health and accident insurances. This also includes the authorisation of the health insurance premiums, especially regarding the financial security of the insurance companies, cost coverage and compliance with the legal regulations.

The supervision of contagious diseases in Switzerland. Therefore, the FOPH enacts the necessary regulations.

Nation-wide programmes, such as e.g. for the reduction of addictive behaviour (tobacco, alcohol, illegal drugs), for the promotion of healthy lifestyles (nutrition and exercise, health and environment) or on the issue of HIV/Aids.

Enactment and control of legal regulations concerning consumer protection (especially food, chemicals, medication, cosmetic products and commodities).

Enactment of legal regulations concerning training and further education of doctors, dentists, pharmacists and veterinarians as well as the issueing of the according federal diplomas[3]FOPH Switzerland: what is the Federal Office of Public Health?.


Health2030[4]Health2030 – the Federal Council’s health policy strategy for the period 2020–2030 is the the Federal Council’s health policy strategy for the period 2020–2030. The strategy acknowledges a number of challenges, including the rising cost of healthcare as a percent of GDP (12.3%) and that the burden on households has increased sharply with low-income households that do not receive a premium reduction the hardest hit. 

The Health2030 strategy follows six principles: 

It aligns the federal government’s health policy with the future challenges facing the health system. 

It is geared to people’s needs and expectations regarding a healthy life and good healthcare. 

It clearly sets out the federal government’s health policy and indicates the areas in which other health policy players bear responsibility. It assumes that the cur- rent division of tasks and responsibilities between Confederation and cantons will continue. 

Its measures are selected on the basis of their problem-solving potential and feasibility. The standard principle of competition upon which the system
of compulsory health insurance is based will be developed further. 

It takes international health policy developments and best practices as a frame of reference. 

It expands on and updates the existing Health2020 strategy. 

The strategy outlines the key objectives:

Utilise health data and technologies – Ensure that all partners in the health system utilise health data and new medical technologies, taking into account opportunities and risks. 

Promote health literacy – Empower citizens to make well-informed, responsible and risk-aware decisions that determine their own health and that of their relatives with support from qualified healthcare professionals. Citizens are encouraged to access solidarity-based healthcare services in a responsible manner. 

Safeguard care and funding – The federal government, insurers and those involved in long-term care ensure that there are enough well-qualified staff in the right place to provide efficient long-term care to those who need it. 

Ensure healthy ageing – the federal government, cantons and other stakeholders ensure that people of all ages enjoy favourable conditions to allow them to be as healthy as possible. 

Improve quality of care – The federal government, insurers and medical service providers reduce over-provision, under-provision and inappropriate provision of care. 

Control costs and ease burden on low-income households – The federal government, insurers and medical service providers control cost increases in compulsory health insurance. They ease the funding burden on low-income households more effectively. 

Support health through a healthy environment – The federal government and cantons work together in the area of environmental policy to ensure that current and future generations can enjoy optimal health and can benefit from biodiversity and landscape quality. 

Promote occupational health – The federal government, cantons and employers utilise the opportunities that arise from new forms of employment in the world of work and take account of the resulting risks. 

The FOPH carries the mandate for the federal government in implementing these objectives. The FOPH have admitted that the COVID pandemic has prevented them from any meaningful progress in meeting these objectives.

The Swiss Health Insurance Market

Switzerland has a population of 8.7 million people[5]Demographics of Switzerland. Of these, 8.15 million are covered under the basic health insurance system with almost 68% insured by the country’s 10 biggest health insurers. 

The administrative costs per client vary dramatically across insurers, with the lowest at CHF68 and the highest at CHF285. Economies of scale do not appear to explain the differences. Assura, Switzerland’s largest health insurer has an administrative cost per client of CHF172.

While the law prohibits insurers from making a profit on the basic health insurance, the large insurers are very profitable. 

Financially the largest health insurer is the Helsana Group. In 2020 Helsana’s premium revenue was CHF 7.1 billion. In 2019 it was CHF 6.75 billion. Operating profits were CHF459 million (CHF 403 million) Underwriting profits were CHF 44 million (CHF 97 million) Net profit after investment income was CHF 155 million (CHF 436 million).

Because the insurers are prohibited by law from making profits on the insurance business, most of the profits are derived from investment income. 

This is where the economies of scale bear fruit.

Premiums are set according the canton and age of the insured. The size of the deductible is also used to determine the premium. Lifestyle and health risk do not affect the basic insurance. Insurers can provide a no-claim rebate to policyholders of supplemental insurance.

The impact of this is that policyholders who adopt a health lifestyle subsidise the healthcare costs of those who lead a more reckless existence. 

1Helsana Versicherungen AG Helsana-GruppeZH1423832
2Assura-Basis SAVD906420
3CSS Krankenversicherung AGLU904624
4SWICA KrankenversicherungZH759488
5CONCORDIA Schweiz. Kranken- und Unfallversicherung AGLU598477
6Sanitas Grundversicherungen AGZH596249
7Visana AGBE497989
8KPT Krankenkasse AGBE373769
9Mutuel Assurance Maladie SA Groupe MutuelVS317320
10Philos KrankenkasseVS197764
11Atupri GesundheitsversicherungBE193381
12Avenir KrankenkasseVS176354
13ÖKK Kranken- und Unfallverischerungen AGGR175192
14Vivao Sympany AGBS153719
15Easy Sana Assurance Maladie SA Groupe MutuelVS146302
16Agrisano Krankenkasse AGAG143151
17Supra KrankenkasseVS91581
18EGK Grundversicherungen AGBL86877
19Sana24 KrankenkasseBE73749
21Aquilana VersicherungenAG45060
22sodalis gesundheitsgruppeVS37729
23Krankenkasse Luzerner HinterlandLU18975
24Sumiswalder KrankenkasseBE18359
25Krankenkasse SLKKZH16960
26Stiftung Krankenkasse WädenswilZH10668
28AMB Assurances SAVS9542
29KluG KrankenversicherungZG9219
30Genossenschaft Glarner KrankenversicherungGL8924
31Genossenschaft Krankenkasse SteffisburgBE5979
32Caisse-maladie Vallée d'EntremontVS4923
33Einsiedler KrankenkasseSZ4500
34KKV Krankenkasse VisperterminenVS4153
35vita surselvaGR3492
36sanavals GesundheitskasseGR3402
37Krankenkasse BirchmeierAG3022
38Cassa da malsauns LUMNEZIANAGR2541

Source: Directory of health insurers in Switzerland

The potential of HRV in the Swiss Healthcare market

  • Switzerland’s health care is the world’s second most expensive after the United States[6]Current health expenditure per capita, PPP (current international $).
  • Physically fit = 30.9%[7]Physical activity behavior (age: 15+).
  • Regularly active = 16.2%.
  • Eight percent of Swiss are cyclists. 
  • Thirty-seven percent of Swiss ski[8]Share of people that ski in selected countries in Europe in 2020/21, by country.
  • Football is the most popular sport in Switzerland with approximately 10,000 matches played each weekend[9]Sport and leisure – facts and figures.
  • Obesity levels in Switzerland have increased from 5.4% in 1992 to 11.3% in 2017[10]Switzerland obesity levels.
  • Overweight or obese: men = 51%, women = 33%[11]Health determinants.
  • Forty seven percent of Swiss willing to make their data available if this led to lower health insurance costs[12]FORUM DES 1OO 2017.
  • Smokers = 27.1%[13]Health.
  • Consume alcohol daily men = 14.9%, women = 7.1%[14]Health.
  • Poor people are deferring non-urgent treatment because of cost. Surveys indicate that almost 3% of the poorest income quintile have an unmet need for medical examination or treatment because of costs – a share that is considerably higher than in Austria, Germany or the Netherlands[15]Switzerland Health system review

Heart Rate Variability

Heart rate variability or HRV is the measure of the autonomic nervous system (ANS). A healthy heart is not a metronome[16]An Overview of Heart Rate Variability Metrics and Norms. At a steady pulse rate the interval between each beat varies. The ANS via the vagus nerve helps to regulate many critical aspects of human physiology, including the heart rate, blood pressure, sweating, digestion, and even speaking[17]Anatomy of the Vagus Nerve

The ANS responds to stress and danger increasing the pulse rate. As the stress alleviates, the pulse rate is reduced. The ANS is generally conceived to have two major branches—the sympathetic system, associated with energy mobilization, and the parasympathetic system, associated with vegetative and restorative functions. Normally, the activity of these branches is in dynamic balance[18]The role of vagal function in the risk for cardiovascular disease and mortality

HRV is the measure of the ANS response. The higher the HRV, the better the response, and the healthier the individual. Low HRV has been implicated in a wide range of conditions including cardiovascular disease, diabetes, osteoporosis, arthritis, Alzheimer’s disease, periodontal disease, and certain types of cancers as well as declines in muscle strength and increased frailty and disability. In short, HRV is the simplest, and among the most reliable indicators of health care insurance risk.

People who exercise regularly, particularly high intensity aerobic sports like running and cycling generate HRV numbers that are ordinarily found in professional athletes. The average rMSSD for a man in his early sixties is just below twenty. For the same man who cycles daily, it would not be unusual to see an average rMSSD figures above one hundred.

Measuring HRV

HRV is measured in milliseconds. It also varies throughout the day depending on the stresses that the subject experiences. 

The gold standard for measuring HRV is in a clinical setting for 24 hours. Using short term techniques that come close to this standard require that the subject adheres to the best practice standards. 

At HRV Health, we have established that reliable metrics are obtained when the subject’s pulse rate is as close as possible to their resting pulse rate. We measure the inter-beat interval for 120 consecutive heart beats using the Polar H10 heart rate monitor, the only consumer device found to be within 99% accuracy of clinical ECG equipment[19]Heart Rate Variability: From Standard ECG Monitors to Wearables.

Our system has been remarkably accurate in detecting illness for our users. Often it is the lower HRV metrics that reveal that the person is ill before any other symptoms are evident. We have detected COVID in users who are otherwise asymptomatic. We have been able to measure the impact of vaccination through the HRV metrics. 

More importantly we are able to see when the user has recovered, independent of how they are feeling.

The impact of illness is easier to determine amongst people who ordinarily have high rMSSD numbers. It is more difficult for people whose rMSSD is at about or below the mean for their age and gender.

We have the rMSSD and resting heart rate statistics for the United States population, and these figures provide a reasonable basis of comparison for other populations. 

The rMSSD figures for people who do not exercise regularly can fluctuate fairly significantly from one day to the next. This is logical. A poor night’s sleep, a dispute with a spouse or a colleague at work, or a couple too many drinks has a disproportionate impact on their immune system, and this is reflected in reduced HRV metrics. This makes illness more difficult to discern from short term statistics. The long term trends however provide clear evidence that something is wrong, and this is contingent on users taking readings regularly.

The HRV Health platform is designed to motivate users to take readings regularly. Health insurers need to support this discipline with the requirement that policy rebates are contingent on the frequency of the HRV readings.

The opportunity

Health insurance in Switzerland fails to adhere to the basic tenet of insurance, that the premiums reflect the risk. The result is that the healthy are subsidising the unhealthy, and with the unsustainable level of rising health costs, this is unsustainable. 

A health insurance company that rewards policyholders that follow a health lifestyle as determined using our technologies will attract a large sector of the market. 

This will disrupt the market, which will raise public awareness, among a public who are already dissatisfied with the lack of effort in addressing the rising cost of healthcare in this country.

We are willing to discuss this opportunity with willing investors.