Competition in health care - the Swiss experience

Abstract

The objective of this contribution is to evaluate the strengths and weaknesses of the Swiss health care system after the new Law on Health Insurance (LHI) that took effect at the beginning of 1996. The LHI just barely survived a popular referendum. An important argument of the campaign in its favor had been that health insurance premiums would fall thanks to increased competition between the sickness funds (mutual health insurers). At the same time, the federal government hoped that its budget would be less burdened by subsidies earmarked for health insurance. Neither expectation has been fulfilled, not least because Parliament made the list of benefits covered more comprehensive than ever. Thus, the health share in the GDP has continued to grow, from 9.5% in 1996 to some 11% in 2003 (OECD, 2004).