Hospital financing and hospital planning

The hospital financing system that came into force in 2012 saw a shift away from the previous cost-reimbursement principle to the current activity- or service-based funding. Since then, a flat-rate payment system has applied to all stays in hospital. In other words, the costs generated by an individual hospital must no longer be allowed to determine the tariff. Instead, it should be based on a price achieved by hospitals that work efficiently. When awarding the performance mandates for inpatient services, the cantons are required to give equal consideration to both private and public providers. Patients are able to select a hospital anywhere in Switzerland from the approved list. This is intended to kick start or boost competition amongst hospitals. In the long term, those service providers that deliver their services efficiently and maintain an adequate quality should be able to establish themselves on the market. The call for uniform funding rules for outpatient and inpatient services remains to be discussed.

The Federal Constitution assigns responsibility for hospital planning to the cantons. As part of this task, the Federal Health Insurance Act (KVG) requires the cantons to determine which hospitals may charge their services to mandatory healthcare insurance by including them on approved hospital lists (i.e. awarding performance mandates); in doing so, they must take the planning criteria set out in the Health Insurance Ordinance (KVV, Articles 58a to 58e) into account. Planning must be geared to demand, and the cantons are called upon to coordinate their plans in this area with the clear goals of preventing any oversupply, containing costs and ensuring the necessary quality. Apart from a few instances of cooperation, all of which are confined to a small geographical area, the coordination of plans between the cantons is not yet taking place to the desired degree. Most cantons’ hospital plans reflect the situation within their own borders and are primarily driven by local and economic interests. This ‘competition’ between cantons means that new surplus capacities are being created in addition to those that already exist. Many locations are seeking to strengthen their appeal by promoting the image of their hospitals (through public services, investments, setting lower reference tariffs for treatment outside the canton of residence, etc.). As well as restricting insured persons in their freedom of choice, actions of this kind ultimately distort the market by putting other hospitals at a disadvantage. The current intercantonal race to invest shows the extent to which local, economic interests act as a driving force. Instead of curbing costs, this kind of hospital planning necessarily causes them to rise – as a rule, the existing surplus capacities are refinanced by way of overprovision. The cantons have clearly failed to use the considerable planning leeway they enjoy as a means of achieving overarching healthcare policy objectives. Their multiple role as hospital operator, supervisory and licensing body must surely be a factor. Therefore, it is crucial that existing conflicts of interest are resolved so that a system of hospital planning which is both meaningful and covers the actual needs of the population can be introduced at the regional level.

In the meantime, the Federal Council has decided to further harmonise the requirements for hospital and nursing home planning by amending the relevant ordinance. This step serves to increase the quality of inpatient care and contain costs. All hospitals in Switzerland are to undergo the same performance audit. With regard to quality, the requirements for the institutions in question are to be set out in greater detail. In addition, hospitals on cantonal lists would no longer pay out any volume-related compensation or bonuses. The aim here is to combat increased service volumes that are not medically justified. The cantons are therefore being asked to better coordinate their planning of hospitals and nursing homes. The new provisions on the recognition criteria and on hospital and nursing home planning in the Ordinance on Health Insurance came into effect on 1 January 2022. CSS basically agrees with the amendments to the ordinance as far as the planning criteria are concerned. Establishing a uniform set of criteria for hospital planning should have been done long ago. Specifying a system of remuneration based on groups of services, taking cost-effectiveness into consideration and, above all, placing greater emphasis on the quality of hospitals in healthcare planning can lead to a clarification and standardisation of cantonal procedures. The amendment of the ordinance also seeks to expand intercantonal cooperation, which will do much to step up the desired concentration of the services on offer.
As far as the setting of maximum service volumes to afford the cantons steering capabilities is concerned, the FDHA sadly did not respond to CSS's demand. Insurers are not able to verify whether the specific cantonal quotas have been met. That is why it should have been imperative for the ordinance to ensure that a canton could not unilaterally release itself from its obligation to cover costs if a hospital failed to satisfy one or more of the stated requirements.

CSS also welcomes the fact that, in the procedure for resolving differences in the cost-containment package, both chambers of parliament have agreed the right of health insurance associations to appeal against hospital-planning decisions in the cantons.