Regional differences in health care costs are one of the major open questions in health policy. With CSSI Working Paper WP 2025/02 “Unpacking Regional Variation in Health Care: Insights from Internal Migration in Switzerland,” Philip Hochuli and Caroline Chuard now provide new answers.
Supply or demand – What drives the differences?
Using data from CSS insureds, the study quantifies the extent to which regional differences in health care costs are shaped by supply and demand:
- 40–45% of the regional variation in total health care costs can be explained by differences in local supply—for example, the density of providers or the regional care structure.
- 55–60% of the variation is attributable to demand—that is, to individuals themselves. Migration between regions shows that people bring their health habits, preferences, and culturally shaped behaviors with them when they move.
- However, the importance of supply varies greatly by type of service and even within medical specialties: for prescription drug costs, the supply share is low (14%), for physiotherapy it is 33%, for laboratory services 42%, and for general practitioners 57%. Within specialists, the range extends from 33% (gynecology) to 67% (surgery).
The paper thus demonstrates that regional variation in health care costs is not merely a “supply problem,” but is to a large extent also linked to individual preferences and characteristics of the insured population.
Placing the findings in the current debate
On September 24, the SRF Tagesschau reported on what is driving health insurance premiums upward. Our paper adds a more nuanced perspective to this discussion: regional differences in supply matter, but a major driver lies on the demand side—in other words, with the people themselves.
The full working paper is available for download here.