In focus – Healthcare expenditure projections for Switzerland up to 2060: ageing and reforms
A new working paper by the Federal Finance Administration (FFA) projects the development of healthcare expenditure in Switzerland up to 2060. The projections show which factors influence long-term expenditure growth. The study also considers the financial implications of the latest healthcare reforms, illustrating the shift between premium-financed and tax-financed healthcare expenditure.
Rising healthcare expenditure is placing an increasing burden on both premium payers and taxpayers. The new FFA working paper illustrates how expenditure could develop through 2060 and identifies the key drivers behind this growth. The study builds on earlier FFA projections and updates them, among other things, with the new population scenarios of the Federal Statistical Office (FSO).
The analysis also accounts for the recent healthcare financing reforms, particularly the uniform financing of outpatient and inpatient services as well as care (EFAS), and the new requirements for cantons to pay minimum contributions towards premium reductions. These reforms will lead to shifts in funding between compulsory health insurance and public budgets. According to the projections, EFAS is expected to increase the burden on public finances in healthcare, while somewhat relieving them in long-term care. Moreover, for the first time, the projections also account for the shift from inpatient to outpatient care, which is expected to reduce overall expenditure growth.
The projections show that cost drivers such as ageing, rising incomes and medical advances, as well as Baumol's cost disease, will continue to exert sustained pressure on the healthcare sector. In the reference scenario, total health expenditure rises from 11.2% of GDP in 2023 to 15.3% of GDP in 2060. Additional scenarios with alternative assumptions regarding ageing, morbidity, migration, and income highlight the importance of these factors for expenditure dynamics.
From a health policy perspective, persistently high expenditure growth risks undermining the population’s broad access to healthcare. From a fiscal policy perspective it raises concerns about the sustainability of public finances. Against this backdrop, further measures to improve efficiency in the healthcare sector and contain expenditure growth are necessary.
The detailed analysis can be found in the working paper entitled “Healthcare expenditure projections for Switzerland up to 2060: ageing and reforms”.