EFAS or why politicians do not want to change the status quo

For years, parliamentarians are said to have argued and fought in committees over the financing of the public healthcare system in order to supposedly curb the burden of constantly rising health insurance premiums. However, if nothing is to be changed about the principle, all changes will be a waste of time. Some groups have realised this in connection with the EFAS (Uniform Financing of Outpatient and Inpatient Services) and have launched a referendum. The compromise agreed by politicians still contains a number of pitfalls, as the public sector’s contribution to financing the healthcare system is not to be increased, but to be further reduced. This is in line with politicians’ will. Fortunately, the people, the sovereign, have the last word and can send the political leaders back to the start so that they can reflect on what the will of the people is.

The background to the EFAS bill which is to be voted on, as trade unions and others have launched a referendum, dates back to 1995. At that time, the Federal Council, represented by J. P. Delamuraz (FDP), signed the WTO agreements for Switzerland without subjecting them to a mandatory referendum; and this should at least have provoked constitutional discussions. The WTO members, and so henceforth also Switzerland, undertake to allocate less and less public money (e.g., tax revenue) to public services, including the public healthcare system. It was against this background that, among other things, the federal bill for the reform of the Federal Health Insurance Act (KVG) was passed by the people and came into force in 1996.

The 1996 KVG reform

In a nutshell, a systemic change in the financing of the healthcare system took place, which was very far-reaching and was only explained very vaguely, but nonetheless jubilantly, in the voting booklet. Whereas before 1996 the health insurance companies were organised in a concordat and had to show a zero balance sheet at the end of the year – i.e. they were not allowed to make a profit – the KVG reform released them “onto the free market”. Federal Councillor Ruth Dreifuss (SP) announced at numerous voting events that this would reduce premiums thanks to competition between insurers.
  Up to this reform, 45 % of inpatient treatment was financed by health insurance companies and 55 % by the cantons. Outpatient services were paid for by the health insurance funds, but these had a kind of deficit guarantee given to them by the cantons (and indirectly also by the federal government). This will not be explained in detail here. After the KVG reform, all outpatient treatment, whether by a family doctor, in a specialist’s practice or in a hospital, was only covered by health insurance. However, the insurers were now on their own and had only one source of income: the premiums of the insured. Inpatient treatment continued to be shared almost equally between health insurance funds and cantons.
  Thanks to medical progress, it became increasingly possible to carry out operations and numerous other treatments on an outpatient basis, i.e. not as an inpatient in a hospital. The increasing shift of treatments to the outpatient sector placed a greater burden on health insurers. Although there was a certain reduction in inpatient treatment, this is likely to have been offset by population growth. In 2000, Switzerland had a population of around 7 million; today we have over 9 million inhabitants. The fact that the WTO stipulates that less and less tax money should flow into the healthcare system obviously suits many cantonal governments. Because the public sector continues to be involved in inpatient treatment even after the 1996 KVG referendum, it is also clear why politicians, led by cantonal health directors, have not stopped closing inpatient units, i.e. hospitals, to this day. The pretext is always the same: The hospitals would not be profitable.

A brief digression:
Do hospitals have to be profitable?

Politicians have been closing hospitals ever since the KVG reform. The background to this becomes clear from the above. The argument is that hospitals are not profitable. However, since the police and fire departments are also not profitable, because they fulfil a civil protection mandate, the question may be asked why a public hospital has to be profitable, when it has to fulfil a very similar task as the police and fire departments do. After all, the mission of public hospitals is to provide healthcare. It is therefore impossible for them to operate “profitably” in the sense of a market economy. And they do not have to do this, because public hospitals are part of the public service, just like the police and fire department or the Swiss Federal Railways (SBB). “A good public service – the hallmark of Switzerland”, writes the Federal Council and defines: “Public service comprises the basic supply of infrastructure goods and services, which should be available to all sections of the population and regions of the country under the same conditions, in good quality and at reasonable prices.” (https://www.uvek.admin.ch/uvek/de/home/uvek/bundesnahe-betriebe/guter-service-public.html)

Cost explosion in the healthcare
system or premium explosion?

As mentioned above, with the increasing shift of examinations, screenings and treatment of patients to the outpatient sector, costs are being passed on to the health insurance funds, while the public budgets are and have been relieved. This latter fact pleases the health and finance directors, as cantonal budgets are thus relieved of one of their most important items, namely that of the healthcare system. For example, state councillor and finance director Ernst Stocker (Swiss People’s Party, SVP) was quoted in 2019 as saying that the canton of Zurich had saved CHF 117 million thanks to this shift from inpatient to outpatient treatment. Rising premiums are explained and presented by politicians as a result of cost increases in the healthcare system, and this allows them to further bash hospitals and their inpatient treatments. Without ever formulating it more precisely, such politicians always like to bring out the cudgel of “false incentives in the healthcare system”. In fact, healthcare costs have risen linearly, i.e. moderately, while the proportion borne by the insured themselves has been rising more rapidly. Further hospital closures are being justified with accusations of disincentives, overtreatment and a lack of profitability, etc., which means that staff are being put under even more pressure.

The EFAS template is not a rescue
in an emergency – on the contrary

Meanwhile, it has transpired in the mainstream media that the targeted withholding of tax revenues in outpatient treatment is unfair. In this context, federal parliamentarians have tackled the issue in their commissions and, after years, formulated a proposal. Fortunately, some attentive citizens, especially from the ranks of the trade unions, have realised that these health experts are not to be trusted. Healthy mistrust is called for.
  According to the reform, the public sector will contribute to all treatments, according to the graphic in the voting booklet (p. 47).
  For inpatients, the cantons’ contribution will be lower for two reasons. First, according to the chart, the cantons’ contributions will shrink from 55 % to 26.9 %. Second, we know that politicians will stick to their chosen course of closing hospitals. This ensures that the cantons’ healthcare budgets will keep up their savings ratio, since savings will be made in the inpatient sector as mentioned above.
  If we consider that the costs for care (especially long-term care) have so far amounted to CHF 13 billion annually, then the reduction in cantonal participation from the current 46 % to 26.9 % is enormous. Therefore, a big question mark must be placed over EFAS, because the cantons may use it to further evade their responsibility for financing.

Conclusion

As long as politicians do not clearly speak out in favour of supporting the healthcare system in our country with taxpayers’ money without following a hidden agenda (like the WTO requirements), nothing good can be expected from Bern and the cantons. Until then, politicians will incessantly try to withhold taxpayers’ money from the healthcare system. Meanwhile, the realisation is dawning on the people that the rising health insurance premiums cannot be explained by “too expensive hospitals”, “greedy doctors” and “extravagant wishes of the population” (“jedem Täli siis Spitäli – a hospital for every valley”). If the EFAS bill has made anything clearer, it is the fact that higher contributions from the public sector (as we had them before) are needed to finance our health service.
  But this bill is built on sandy ground, because the foundation, the neo-liberal course with a planned scarcity of public funds in healthcare, is useless; and this course will not be stopped by the EFAS bill. Healthcare cannot and must not function according to market economy principles, if only because the patient is not a customer who wants to buy something. Primarily, patients feel threatened by their illness or injury and they want to get well, they want to live. Why are politicians so unwilling to understand this?

Summary

The EFAS bill boasts that it will ensure uniform financing in the healthcare system. It will indeed become uniform if the bill is passed, since outpatient and inpatient treatments, as well as long-term care, will all receive the same percentage from the cantons. However, if drastic cuts are made by the cantons, especially in the areas of inpatient treatment and long-term care, then the public sector contributions may be uniform, but they will be uniformly poor. The federal government and the cantons are following the WTO agenda here, and with each reform more and more tax revenues are being and will be withheld from the healthcare system, which means that the next premium shocks are inevitable. •

(Translation Current Concerns)

* David Holzmann is a Senior Physician and Deputy Director of the ENT, Oral and Maxillofacial Surgery Clinic at the University Hospital Zurich, USZ.