Can the healthcare system be protected from overload without jeopardising patient welfare?
In 2022, insured persons paid an average of CHF 581 out of their own pocket for basic insurance. But why does this cost sharing exist at all, how is it structured and why is it politically controversial? We take a closer look at this below.
The purpose of health insurance is to mitigate the financial consequences of illness. In the event of illness, it covers a large part of the treatment costs, even if these exceed the insurance premiums paid by the sick person. This results in a transfer from healthy to sick people, which is the purpose of insurance. However, the fact that a person does not have to bear most of the treatment costs themselves in the event of illness has an undesirable side effect: insurance cover creates an incentive to demand more benefits than would be demanded if the person had to pay the full treatment costs themselves. This increase in demand is known as "moral hazard". Numerous empirical studies, including large, randomised experiments, suggest that moral hazard exists and can be reduced by means of cost sharing. In other words, cost sharing is intended to prevent over-utilisation of services.
Organisation of cost sharing
The cost sharing consists of the "deductible" and the "excess". There are certain options for the deductible, but the excess is fixed at ten per cent with a fixed maximum amount. In the diagram, we look at three adults and assume that they have all chosen the lowest deductible of CHF 300; the maximum amount for them is CHF 700. The first person has currently claimed benefits totalling CHF 150. As this is below the deductible, they have to pay everything themselves. The second person has claimed CHF 5,500 in benefits. They pay the deductible and an additional ten per cent of the amount exceeding the deductible of CHF 5,200, i.e. CHF 300 plus CHF 520 equals CHF 850. The insurance company therefore pays CHF 4,680 of the treatment costs. The third person has claimed benefits totalling CHF 8,000. She also pays the deductible and the excess of ten per cent. However, this is limited to a maximum of CHF 700, which comes into play here. The person therefore pays CHF 1,000 out of their own pocket and the remaining CHF 7,000 is paid by the insurance company. As the cost contribution is payable annually, the third person does not have to contribute any further to their costs until the start of the new year, even if they claim further benefits. However, the other two people will continue to pay a share of the costs until they reach the maximum amount of the deductible.
37'728
13.5%
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Although cost sharing reduces costs and thus premiums, it is sometimes controversial from a socio-political perspective. On the one hand, cost sharing is independent of the insured person's income and assets. This places a higher financial burden on poorer people. Accordingly, there is a conflict of objectives between cost reduction and social compatibility when determining the level of cost sharing. The last adjustment to the deductible and maximum amount of the excess took place in 2004. Since then, there have been several attempts to increase cost sharing, but they have all failed due to this conflict of objectives in favour of social compatibility. On the other hand, it is occasionally assumed that insured persons do not actually utilise necessary services because they cannot afford the cost sharing. This has a negative impact on the medical condition, which leads to higher costs. To counteract this somewhat, the co-payment is set lower for certain people (children and pregnant women).
The existing conflict of objectives fundamentally calls for a political decision. However, this is only possible if there is clarity about the effects of cost sharing - both desirable and undesirable. The aim of our research listed below is therefore to gain a better understanding of the effects of cost sharing in order to create a reliable basis for the political decision-making process.