Cost Control Initiative

What is at issue?

The Centre Party launched the Cost Control Initiative in 2020 (as the CVP) in response to the steady rise in healthcare costs and associated increase in insurance premiums for Swiss households. At the core of the proposed constitutional amendment is a new mechanism designed to slow the growth of healthcare costs. In concrete terms, the Federal Council and the Cantons must introduce measures as soon as the annual cost increase in basic healthcare insurance (BHI) reaches more than a fifth higher than the nominal wage increase – and if the tariff partners do not themselves establish binding cost-containment measures within two years of the initiative being adopted.

The Federal Council and Parliament reject the initiative on the grounds that it goes too far and is not suitable for stopping the alleged «cost explosion» in the healthcare system. As a result, an Indirect Counterproposal to the initiative has been submitted. It stipulates that the Federal Council and subsequently the Cantons should set cost and quality targets in the various service areas for four years at a time. A newly created Extra-parliamentary Federal Commission would monitor target performance and issue recommendations to the Federal Government and tariff partners in the event of non-compliance. No sanctions are foreseen. Services which appear not to (or no longer to) meet the criteria of expediency and economic efficiency shall be evaluated using an evidence-based procedure. Should the assessment find that the expediency and economic efficiency criteria are not met, the corresponding service will not (or no longer) be covered by basic health insurance.

Our Position

Rising basic health insurance premiums place a heavy burden on large sections of the population. In principle, Swiss Medtech supports measures which slow the rise in healthcare costs. Action, however, should not be limited to cost-oriented approaches, but must also consider the quality of healthcare services.

The Cost Control Initiative addresses rising costs in an overly rigid and risky manner. Even if the link between healthcare expenditure and wages may appear reasonable from the perspective of the individual household, it is misguided, as growth rates of the two key figures develop independently. It would be more productive to implement balanced and effective measures on selected elements of a system which is basically functioning well. In Switzerland, high-quality healthcare is available to all residents. The present initiative jeopardises precisely this aspect and could lead to a drop in quality, as well as extended waiting times for treatment. For this reason, and due to too many unanswered questions in connection with implementation, Swiss Medtech rejects the initiative and favours the Indirect Counterproposal. Cost management by tariff partners via a bottom-up approach is more effective than cost control by the state.

Arguments

Avoid jeopardising security of supply
Widespread consensus agrees that costs could be cut in the Swiss healthcare system without compromising quality of treatment. The Cost Control Initiative rightly addresses precisely this issue but is not the best solution to achieve the declared goal. In fact, the rigid cost targets resulting from a link with trends in nominal wages could lead to a decline in quality and postponed treatments. The failure to consider factors such as demographic trends, as well as technical and medical progress will make it even more difficult to maintain equal access for all. The Federal Council also explains its rejection of the initiative on the grounds that it could result in the rationing of resources. The initiative is not only risky, but also impractical. For example, focusing cost targets on individual, allegedly «overfunded» service providers, collective agreements, or service blocks would be difficult to implement.

Focus on patient benefit
The mechanism proposed by the initiative would effectively create an overall «global» budget, which would not only jeopardise quality of care for existing treatments and operations, but also restrict patient access to innovative medical products and therapies. It is central that the health policy debate not focus solely on costs. Instead, quality of treatment and the resulting benefit for patients must also be placed centre stage. The Indirect Counterproposal which addresses this issue by setting quality targets while strengthening enforcement of expediency and economic efficiency criteria, identifies the right approach. However, rigid cost targets inhibit medical progress and, in the worst-case scenario according to the Federal Council, could lead to a two-tier medical system.

Avoid regulatory confusion
The Swiss healthcare system need not be state-run, but should be based on principles of well-regulated competition with the Federal Government having legitimate subsidiary powers. The tariff partnership between service providers and insurers is essentially a success story and should be developed constructively. The interference with the healthcare system called for by the initiative would weaken the tariff partnership, reinforce silo thinking in the healthcare system, and lead to considerably more work for the authorities, tariff partners, and industry. Instead of state intervention, a bottom-up approach and a functioning collective bargaining partnership are needed to effectively counter the rising costs. A recent decision by Parliament to introduce uniform financing of outpatient and inpatient services (EFAS) demonstrates that broad-based reforms in the healthcare system are achievable.

In general, adjustments at the legislative level are preferable to amendments to the Constitution. The aim of the Cost Control Initiative can also be accomplished through a revision of the law.