Home » Health insurance companies – What we also pay with our premiums – News

Health insurance companies – What we also pay with our premiums – News

by admin
Health insurance companies – What we also pay with our premiums – News

Contents

In addition to healthcare costs, there are administrative costs. And not too close – they have increased by 35 percent over the last ten years.

The line of argument has been the same for years: the administrative costs of health insurance companies are comparatively low. And when compared to total health care costs, they are practically negligible.

Specifically: In the last year, the premiums earned by the health insurance companies amounted to 32.9 billion francs, the operating expenses or administrative costs amounted to 1.7 billion – i.e. 5.2 percent. This is how it goes from the Operating invoices which must be disclosed by the health insurance companies to the Federal Office of Public Health.

Administrative costs increased by 35 percent within ten years

Astonishing: Over the last ten years, administrative costs have gradually increased, in absolute terms. In 2013 it amounted to 1.26 billion francs and then increased year after year – with one exception in 2018.

How can it be that administrative costs increase by 35 percent within ten years? What if consolidated inflation only increased by 0.28 percent in the same period?

This is a mass business, there should actually be more efficiency in it.

The health insurance association Santésuisse points to investments, particularly in the health insurance companies’ IT, as the reason for the increased expenditure.

Small doesn’t have to mean inefficient

Health insurance expert Felix Schneuwly finds this only partially valid as an argument: “This is a mass business, there should be more efficiency in it. Administrative costs would have to fall on average below 5 percent. And it’s just the average, there are health insurance companies with very high administrative costs of 10 percent.”

See also  "Will treat all UBS and CS employees fairly"

An outlier, for example, is the small health insurance company Institut Ingenbohl, which is active almost throughout Switzerland from Einsiedeln, but only has a little over 700 insured people. Last year, the share of administrative costs in the premiums earned was 20 percent. In other words: out of every 100 francs in premiums, 20 francs are lost in administration.

Legend: Rising healthcare costs will be the biggest concern for the Swiss in 2023, according to the Credit Suisse worry barometer. Christian Beutler/Keystone

The example of the Lucerne Hinterland health insurance company shows that small does not have to mean inefficient. Last year, with an administrative cost share of 3 percent, it was one of the most economical health insurance companies ever. It has 23,000 insured people.

Will there ever only be 10 health insurance companies left?

Of the large funds, Visana (4.3 percent), CSS and Helsana (both 4.7 percent) and Concordia (4.9 percent) managed to stay below the 5 percent average with their share of administrative costs. KPT has a comparatively high share, at 6.7 percent.

If a health insurance company is too expensive, it will no longer be competitive on the market, will lose customers and will have to close.

The Santésuisse association is of the opinion that competition will determine future developments: “If a health insurance company is too expensive because it cannot control administrative costs, it is no longer competitive on the market. Then it will lose customers and will have to close.” This is already happening, says director Verana Nold.

Health insurance expert Felix Schneuwly also agrees and formulates what he sees as the ideal number of providers for the Swiss market: “In 1996, when the health insurance law was introduced, there were still 145 health insurance companies. So to date there has been a consolidation to 43 funds.” This process will probably continue. “If it makes economic sense, you would have around ten health insurers.” So around four times less than today. But that will probably take a long time.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy