Switzerland: #1 in the 2022 World Index of Healthcare Innovation

Introduction

The Swiss healthcare system ranks 1st overall out of the 32 countries evaluated in the 2022 World Index of Healthcare Innovation, with a score of 66.49, ahead of Ireland (2nd) and the Netherlands (3rd). Switzerland also ranked 1st in 2021 and 2020.

Switzerland excelled in every WIHI dimension, but especially in Quality (2nd, 69.39), thanks to high scores in disease prevention, patient-centered care, and infrastructure. Switzerland ranked 4th for Choice (65.54), because it allows for freedom of choice both of providers and payers, under a universal private system. Switzerland ranked a distant but respectable 2nd for Science & Technology (62.56), behind the United States.

Switzerland’s “worst” ranking was 5th, for Fiscal Sustainability (68.47). Switzerland scored especially high on efficient public healthcare spending. However, scores in growth in healthcare spending and demographic trends present challenges for the alpine nation going forward.

Background

Switzerland first instituted a federal law on health insurance in 1912, establishing and regulating voluntary private coverage at the cantonal (regional) level. The percentage of Swiss residents with health insurance rose from 11 percent in 1915 to 40 percent in 1930, to 60 percent in 1947, and to 80 percent in 1959. By the 1990s, Swiss coverage was universal.

Nonetheless, the confederation introduced a major overhaul of the healthcare system in 1994, the Swiss Federal Health Insurance Act, which included the following measures: establishing income-based subsidies to make coverage more affordable for low-income Swiss; introducing an individual mandate to require coverage; and containing costs. As a result, today Switzerland has a universal market-based health insurance system, in which every Swiss citizen purchases private coverage on the individual market. The insurance benefit package is standardized to some degree by the Federal Office of Public Health (FOPH), though individual cantons have considerable flexibility in how their insurance markets are structured.

Of note, the Swiss system was a model for Massachusetts Gov. Mitt Romney’s health reforms in 1996 and President Obama’s Affordable Care Act, enacted in 2010. The U.S. Medicare Advantage program, in which seniors shop for private coverage, also bears many similarities to the Swiss system. Switzerland has no “public options” or other government-run insurance plans.

Regarding prescription drug coverage, the Swiss Federal Drug Commission advises the FOPH on including drugs in the standard insurance benefits package. The FOPH also regulates reimbursement rates in this setting. In addition, insurers in a given canton can band together to negotiate drug prices with a manufacturer jointly.

Switzerland is home to Roche and Novartis, two of the world’s largest innovative pharmaceutical companies. Most other drug companies base their European headquarters in Switzerland due to the confederation’s low tax rates.

Quality

Switzerland ranked 2nd on Quality, bested only by Norway. Switzerland leads all countries in infrastructure, with one of the highest numbers of nurses per capita and near-optimal hospital capacity. For disease prevention (5th), Switzerland particularly excels as the top country in addressing all forms of treatable mortality. Finally, Switzerland provides a high level of patient-centered care (4th), with solid marks for patient safety and consultation times with primary care physicians.

Choice

Switzerland ranks highly for Choice at 3rd overall. The Swiss prioritize freedom to choose healthcare services (1st), offering a wide array of health insurance plans and a completely free choice of providers. Switzerland spends more on healthcare as a share of economic output than any other major European country. Switzerland has a well-developed pharmaceutical industry, with good access to novel medicines for a country of its size. It does poorly, however, in terms of market share for generic drugs.

Science & Technology

At 2nd, Switzerland’s ranking in Science and Technology is the highest outside the United States. On a per capita basis, Switzerland invests more than twice as much in medical research and development than any other country. In addition, Swiss scientists ranked 1st in scientific citations for publishing highly cited academic research. While its hospitals take full advantage of health digitization, primary care and specialist providers employ such technology to a lesser degree.

Fiscal Sustainability

Switzerland ranks 5th for Fiscal Sustainability, an improvement from last year’s rankings. Despite having the second highest national health expenditures per capita of all countries in the Index, Switzerland spends only 2.5 percent of GDP on public healthcare spending (4th). Still, Switzerland’s growth rate for public healthcare spending (13th) is cause for concern, as it is in most countries.