Policy Feedback and Health Care Cost for Citizens: Empirical Evidence from Switzerland

Most developed countries have adopted some form of universal health care system that claims to guarantee access to essential services for all residents. Yet, at the same time, these systems often require citizens to pay for certain parts of their health care out of pocket. In many countries, health insurance is provided by private companies that deliver a quasi‑public service. The main argument for maintaining market elements is that competition between insurers leads to better prices for consumers and providers. In this paper, we argue that high out‑of‑pocket payments lead individuals to forgo health care services for financial reasons, which in turn increases support for fundamental health insurance reform. To illustrate this argument, we examine health insurance policy reform and public opinion in Switzerland—a wealthy country with universal health care that nonetheless requires citizens to cover a significant share of medical costs out of pocket. We conduct two empirical analyses. First, we examine the historical evolution of health care costs for households as well as state‑financed support for those who cannot afford to pay for their health care. These results show that—despite recent reforms—the effective cost of health care for households has increased far more than politicians anticipated when the national health insurance system was created in 1994. Second, we use original survey data to measure the extent to which individuals decide not to consult a doctor for financial reasons and how this behavior affects their political preferences. Our analysis shows that individuals who report forgoing health care services for financial reasons are more likely to support a more redistributive system and to vote for such reforms in popular votes. Overall, our research contributes to the understanding of economic feedback effects in health policy. We argue that market failures generate political learning among voters, which in turn shapes the political agenda for health care reform.