The Healthcare Industry

Bruno Schenk and Akima Media, November 2023

Time for a healthy discussion ?

If you ask a hundred people “What is the most important thing in life?”, you will get a bunch of different answers. Some will say wealth, love, and family, but many will say health. Without good health, all the others are difficult to enjoy for any length of time. Our healthcare system in Switzerland is often praised for its high standard of care, but does it live up to its reputation? Let's delve into the numbers and explore the challenges and innovations within the Swiss healthcare landscape.?

Costs and expenditure: a comparison to Europe?

Healthcare and the wider life sciences are both major expenses and revenue-generating industries within Switzerland. On the cost scale, according to the Federal Statistical Office total health expenditure for 2021 – the last period with a full dataset – was CHF 86.3 billion. In more detail, compulsory health insurance was around CHF 31 billion, with the state and direct payments from households adding approximately CHF 19 billion each, while other social insurance added around CHF 8 billion.??

This equates to a health care expenditure per capita of around CHF 800 per month. Switzerland spends 11.8 percent of its GDP on healthcare, which is slightly higher than the EU average of 8.1 percent and just slightly less than Germany's 12.7 percent. On paper, at least, the Swiss healthcare system could be considered a leader compared to Europe.?

Like most of the EU, Switzerland has a mix of public and private healthcare systems, and medical insurance is mandatory. However, unlike in other EU countries, health insurance is not connected to employment in Switzerland. All residents are responsible for choosing their insurance provider and taking out proper insurance. Alongside compulsory insurance, many will also purchase supplemental insurance for additional coverage and benefits. Although the total health expenditure for healthcare has risen by around CHF 5 billion since 2019, the cost as a percentage of overall GDP has not changed much over the last 5 years.?

More out of pocket?

If you look at OECD data, only the United States spends more per capita on healthcare than Switzerland. However, a closer look will highlight two very surprising reasons for concern. The first is that Swiss citizens pay the highest voluntary contribution, even more than the US. While government contributions are lower than the next 3rd to 6th-placed countries, namely Germany, Norway, the Netherlands and Austria. In simple terms, healthcare is expensive for Swiss families that need to pay out of pocket for more treatments. From my own experiences, speaking to colleagues and health professionals, even with higher costs, service quality has not improved.?

The reasons seem to be numerous and complex. As the population ages, one major issue is staffing, especially for elderly care. According to data from PwC, there are 15,000 care vacancies across the country. This also suggests that Switzerland could have a shortage of 40,000 nurses and 5,500 doctors by 2040.?

Another common theme is that getting access when you need a doctor is getting more challenging. What happens is that people are going to accident and emergency units within hospitals, even if the issue is not technically an emergency but rather due to an inability to get doctor appointments. The issue seems countrywide but is far more acute in rural areas.

Another trend is a consolidation of clinics across the country. The number of hospitals has declined by 25 percent from 376 in 2000 to just 276 by 2020. Some of these are closures, but many more are consolidations and even still, the number of beds in hospitals is 4.3 beds per 1000 people – lower than 5 per 1000 for the EU nation within the OECD.?

Brighter future?

I don’t want this blog to sound like doom and gloom, as there are some positives for healthcare, and much of this is centered around innovation, technology and progressive thinking.?

The Swiss healthcare system ranks first overall out of the 32 countries evaluated in the 2022 World Index of Healthcare Innovation, ahead of Ireland (2nd) and the Netherlands (3rd). Switzerland also ranked first in 2021 and 2020. The annual study is carried out by the Foundation for Research on Equal Opportunity, a non-profit think tank, which also found that: “On a per capita basis, Switzerland invests more than twice as much in medical research and development as any other country. In addition, Swiss scientists ranked first in scientific citations for publishing highly cited academic research. While its hospitals take full advantage of health digitization, primary care and specialist providers employ such technology to a lesser degree.”?

There are lots of examples of innovation, like Boehringer Ingelheim, a pharmaceutical company based in Basel that has a partnership with Google Quantum AI to use quantum computers to model complex molecules with the goal of creating new breakthrough drugs faster.?

Healthy partnerships?

Another area where things are improving is in joined-up healthcare initiatives. For example, in 2023, hospital group Swiss Medical Network and Bernese insurance group Visana announced the establishment of Switzerland's first integrated health organization in the region of Arc Jurassien. Although subject to approval by the FOPH (Federal Office for Public Health), they are testing an alternative insurance model that is planned for the canton.?

My understanding of this concept is that although people may pay more per month in health insurance, they’re fully covered for whatever treatments are required, from emergency care to ongoing conditions. Voluntary payments are reduced because the hospital and the insurance provider are in partnership with the joint goal of delivering healthcare within a fiscally sustainable model. At present, this is a test within just one canton. But if it’s successful, the plan is to potentially try similar approaches across the country, assuming other hospitals and insurers can form working partnerships.?

This sits alongside new agreements between healthcare unions, FOPH, and hospitals to improve working conditions, especially for nurses.?

Life in the sciences??

The examples of innovation, from remote medical consultations to innovative drug delivery schemes, are numerous and Switzerland has been a pioneer in many areas. When you add in pharmaceutical firms like Novartis, Roche and Syngenta, this encompasses a dense network of medtech, biotech and nanotech leaders, which equates to CHF 109 billion in exports, including 8 percent of global pharmaceutical production!

The whole world is facing challenges when it comes to balancing costs with healthcare quality and there is no magic bullet. Technology and innovation, along with a willingness for disparate groups to work more closely, will be vital to keeping us all healthy and hopefully happy.?

As Switzerland continues to navigate the complexities of its healthcare system, innovations and collaborative efforts hold the promise of a brighter future for healthcare delivery in the nation.??

What’s your outlook on the Swiss healthcare sector?

Sources

https://freopp.org/switzerland-1-in-the-2022-world-index-of-healthcare-innovation-619dedce4862??

https://www.statista.com/statistics/535443/hospitals-in-switzerland/??

https://data.oecd.org/healthres/health-spending.htm??

https://www.swissstats.bfs.admin.ch/collection/ch.admin.bfs.swissstat.de.issue231415402300/article/issue231415402300-05??

https://lenews.ch/2023/01/27/government-creates-plan-to-stem-resignations-in-healthcare/#:~:text=As%20Switzerland's%20population%20ages%2C%20demands,and%205%2C500%20doctors%20by%202040.??

https://www.bfs.admin.ch/bfs/en/home/statistics/health/costs-financing.html??