Votes: Why are many Swiss hospitals struggling financially?

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Published on 04/30/2024

Estimated reading time: 6 minutes

This is significant financial support that the Friborg Hospital (HFR) could receive if the people of Friborg accept the idea of ​​a guarantee and a loan of 175 million francs on June 9. This help will be welcome for the hospital which is struggling to invest with its own resources. Governed by case packages, the baserate or the PIG, the financing of Swiss hospitals can seem very opaque. However, these terms hide very concrete realities.

Packages per case. Swiss hospitals have been financed since 2012 on the basis of flat rates per case. These amounts are set by SwissDRG for acute hospitalizations, Tarmed for outpatient services and ST-REHA for rehabilitation. Each diagnosis corresponds to a package. Thus, the implantation of a hip prosthesis will be reimbursed on the same basis throughout Switzerland. Whether the patient is 25 or 85 years old, the package, calculated from an average of costs across all hospitals, will remain the same.

For another package to be considered, the patient will need to have secondary diagnoses, such as an infection after surgery. When there is hospitalization, the bill is covered 55% by the canton and 45% by health insurance. For outpatient consultations, the funds pay 100%.

“Generally speaking, packages do not cover treatment costs when patients have comorbidities and social problems”
Daniela Ehbrecht Fux

Bias. Packages per case do not take into account the patient’s situation. “If he is young with a family to support him, he will be able to go straight home after a few days. If he is very old and alone at home, it will be completely different. Generally speaking, packages do not cover treatment costs when patients have comorbidities and social problems,” reports Dr. Daniela Ehbrecht Fux, head of medical management control at the HFR.

As the packages are calculated based on previous years, they ignore the most recent phenomena, such as inflation. In addition, a public hospital must treat everyone, unlike a private clinic which has the possibility of focusing on certain specialties and favoring elective operations, which are scheduled in advance. “This is one of the reasons why they are doing better,” says Daniela Ehbrecht Fux. They also have more private and semi-private patients. They do less training and often don’t offer 24-hour emergencies.”

Baserate. Each hospital has its particularities and negotiates its base rate per case, the famous baserate, with insurers. Once multiplied by the severity index of the case, it makes it possible to determine the cost charged for each situation. University hospitals generally have a higher base rate, in particular because of the heavy nature of the cases they handle. The agreements setting the baserates can be renegotiated. The HFR did this in 2023, in order to compensate for inflation. “Our base rate increased from 9700 to 9950 francs in 2024, which represents a big increase. But insurers were not ready to cross the 10,000 mark,” explains Nathalie Tercier, financial director.

Price of the HFR. In Swiss comparison, HFR is relatively expensive. The reasons are multiple. Operating on four sites is a financial disadvantage. “We need to have qualified personnel in several places,” explains Dr. Daniela Ehbrecht Fux. Treating a wide range of pathologies requires hiring numerous specialists. “On the other hand, if you only do orthopedics, you always have similar processes,” adds Nathalie Tercier.

Transfers between sites come at a price. In an old building like the Cantonal Hospital, the repair and renovation costs are significant. HFR staff, who are subject to the State personnel law, benefit from the canton’s salary scale. An indexation of 2.74%, as decided by the Council of State for 2023, has a significant impact on finances. Bilingualism also adds to the bill: all IT tools must be available in two languages, with media and licenses to pay.

“This does not cover the entire cost”
Nathalie Tercier

General interest benefits (PIG). For bilingualism or transfers between sites, the HFR receives support from the canton through services of general interest (PIG) ​​and other services. “But this does not cover the entire cost,” explains Nathalie Tercier. PIGs are specific services that the canton orders from the hospital and finances. This includes university training, research, chaplaincy, SMUR (mobile emergency and resuscitation service), consultant midwives and liaison psychiatry.

Support from the canton. To obtain PIGs, a request is submitted each year to the canton by the HFR. This support is reserved for specific services for which analytical accounting is requested. The HFR still has transitional funding, introduced after the change of system in 2012. “The goal is to reduce this transitional funding and allocate it to existing PIGs in order to cover costs,” reports Nathalie Tercier.

Investments. It was planned that the case-based package system would make it possible to finance the entire hospital, whether medical care, administrative services or investments. But for Nathalie Tercier, with inflation, the system no longer allows the HFR, like other hospitals, to reserve part of the income for the future: “We can’t do it.” Currently, the HFR finances its investments and urgent repairs via a current account, made available by the State and whose credit limit has been increased. The canton operates like a bank and provides liquidity. But he also receives interest on these amounts.