Under what conditions does regulated competition equally benefit insured individuals and patients?
Switzerland offers a unique healthcare system that combines competition with government regulation. At its core is the mandatory health insurance (OKP), which guarantees access to essential healthcare services for all residents of Switzerland. In addition, insured individuals can purchase voluntary supplementary insurance and pay out-of-pocket for non-prescription services.
11.7%
The Swiss healthcare system is based on the principle of regulated competition. Similar to systems in Germany or the Netherlands, there is not a single state insurance provider but rather around 40 private health insurers competing for enrollees in the mandatory basic insurance. This insurance covers an implicit benefits catalog defined by the Federal Office of Public Health (FOPH), including treatments that are medically effective, appropriate, and cost-efficient. Insurers are required to cover these services and may not deviate from them.
To ensure that everyone has access to medical care, competition among insurers is strictly regulated. They cannot reject anyone due to pre-existing conditions, and the so-called risk equalization system prevents insurers from targeting young and healthy individuals. Premiums can only vary based on geographic region and three age groups, and these variations must be approved by the FOPH. Insurers are not allowed to make profits in the mandatory basic insurance (OKP); any surpluses may only be used to build reserves.
Federalism in the Swiss healthcare system
The Swiss healthcare system is federally organized, meaning that the federal government, cantons, and municipalities share specific responsibilities. The federal government establishes the legal framework, such as through the Health Insurance Act (KVG), and defines the benefits catalog for basic insurance. The cantons hold significant responsibility for healthcare provision, particularly in hospital planning and financing, as well as in the education of healthcare professionals. Municipalities often handle tasks related to health prevention and social assistance, such as supporting nursing homes and elderly care services. This federal structure allows regional needs to be addressed and provides flexibility in responding to local challenges.
The financing of the Swiss healthcare system is distributed among various stakeholders. The mandatory health insurance (MHI) accounts for the largest share, covering 40.9% of the costs. Private households contribute 22% of the costs, mainly through out-of-pocket payments. The government also contributes 22% (cantons 17.1%, municipalities 3.3%, and the federal government 2.6%). Other private funding sources cover 13% of the expenses.
In addition to the standard model, which includes a CHF 300 deductible and free choice of doctors, insurers can also offer optional deductibles of up to CHF 2,500 as well as alternative models with restricted doctor choice. These options allow policyholders to benefit from lower premiums.
The prices for services covered by basic insurance are centrally regulated and apply equally to all insurers. The Federal Office of Public Health (FOPH) directly sets the prices for prescription medications, while other services are negotiated by so-called tariff partners—such as health insurance organizations and representatives of the medical profession—under the supervision of the FOPH. The approval of service providers for basic insurance also falls under the responsibility of the federal government and the cantons. Insurers are obligated to reimburse services provided by approved providers.