Over the past 3 decades, the expansion of MHI has left less room for VHI. The 2012 hospital financing reform was a key turning point: by requiring cantons to establish hospital lists and cover 55% of inpatient costs for listed public and private hospitals, it replaced a significant share of financing that had previously been borne by VHI. In addition, since 2012, MHI has also covered hospital stays outside the canton of residence under limited conditions [7]. At the same time, rising MHI premiums have increased financial pressure on households, reducing their ability or willingness to purchase supplementary insurance.

Broader changes in healthcare delivery are reducing the relevance of traditional hospitalization insurance. Inpatient care is increasingly being replaced by outpatient treatment, hospital stays are becoming shorter, and technological and demographic changes are transforming patterns of hospital use. As a result, there are objectively fewer opportunities to use conventional VHI products centered on inpatient hospitalization.

A further challenge for VHI is the lack of standardization in the benefits offered by insurers and hospitals, which makes informed consumer choice difficult. Insurers have considerable freedom in designing supplementary insurance products, including the services covered, the level of reimbursement, and any exclusions or limits [17]. Unlike mandatory health insurance, whose benefit package is clearly defined by regulation, VHI operates through individualized contracts that vary widely across insurers. While this flexibility may allow products to be tailored to different needs, it also makes policies difficult to compare and can weaken transparency for consumers.

Variation also exists on the provider side. Hospitals define their own catalogues of services for semi-private and private patients, and there is no official standard specifying what such categories should include. As a result, similar products may provide different benefits depending on the insurer and the hospital involved. In response to concerns raised by FINMA, the insurance industry introduced general principles in 2021 to clarify the concept of “additional benefits” under VHI [19]. However, these principles remain broad and do not establish a uniform standard, leaving important differences in benefits and service content unresolved.

Tariffs and reimbursement under VHI add further complexity to the system. Unlike MHI, where tariff structures are more tightly regulated, VHI operates largely under private law, allowing hospitals and physicians considerable freedom in defining supplementary tariffs. As a result, insurers negotiate separate pricing agreements with individual hospitals, hospital groups, and physicians, using different methods to calculate costs and bill services. This leads to limited transparency, substantial price variation, and considerable difficulty for policyholders in understanding invoices or assessing whether charges are justified [18]. Although insurers have simplified some tariff systems in recent years under pressure from FINMA, fragmented tariff arrangements remain a defining feature of the sector.

Taken together, these four factors point to a central tension in the current VHI landscape. On the one hand, structural changes in health financing and care delivery have narrowed the space in which traditional hospitalization insurance can provide distinct value. On the other hand, the sector remains financially and strategically important for insurers, hospitals, and physicians. The future relevance of VHI will therefore depend on its ability to adapt to a changing healthcare environment, to offer more clearly defined and transparent benefits, and to reduce the complexity that currently characterizes product design and tariff arrangements.

This study has several limitations. It draws partly on secondary sources, which do not always permit independent verification of all claims discussed. The qualitative component involved a limited number of interviewees and stakeholder dialogue participants, and direct input from the Swiss Financial Market Supervisory Authority was not obtained. The recommendations are evidence-informed and stakeholder-informed, but they were ultimately synthesized by the researcher and should not be interpreted as a formally endorsed consensus.

To remain relevant in a changing healthcare environment, VHI needs to move beyond largely traditional hospitalization products and support innovation in financing mechanisms, product design, and cooperation with healthcare providers. A first avenue for innovation concerns financing mechanisms. One option would be to introduce an individual savings component within VHI premiums, drawing on principles used in life insurance. Under such a model, part of the premium could accumulate over time and later be used to offset premium increases at older ages or facilitate switching between insurers. This approach could improve affordability across the life course and make coverage more accessible for older adults and individuals with pre-existing conditions. At the same time, such innovations would need to be assessed carefully within the existing legal and supervisory framework, including potential implications for product approval and regulatory oversight. A relevant real-world example of linking insurance with a savings mechanism is Singapore’s health financing model, where Medisave (mandatory medical savings accounts) can be used alongside Integrated Shield Plans, which provide supplementary hospital coverage beyond the basic public scheme [20].

A second avenue concerns product innovation. Future VHI products could move beyond room category and conventional inpatient privileges to include services better aligned with contemporary care pathways, such as post-hospitalization support, preventive services delivered in hospital settings, or selected forms of outpatient hospital care. More modular products could also improve flexibility and better match heterogeneous consumer preferences. A useful European example is the Dutch supplementary insurance market, where health insurers offer a wide range of modular or semi-modular supplementary products in addition to mandatory coverage [21].

A third area is innovation through insurer–provider collaboration. Stronger cooperation between insurers and healthcare providers could support preferred provider arrangements, integrated care models, or value-based approaches linking payment to quality and outcomes. However, such developments remain difficult in a fragmented system characterized by limited trust, regulatory pressure, and concerns about unjustified billing. Oversight remains essential to protect policyholders, but regulatory interventions should be designed in a way that preserves room for constructive cooperation and innovation. One of the clearest international examples of such collaboration is Kaiser Permanente in the United States, which is often cited as a model of integrated financing and service delivery. Insurance, provider networks, and care coordination are brought together in a more unified structure than in fragmented systems [22].

Improving communication with policyholders and patients should be a priority across all stages of the insurance pathway [23, 24]. At the point of enrollment, information on coverage, exclusions, and expected costs should be presented in a clear, accessible, and comparable way. During hospitalization planning, patients should receive transparent information on which services are covered by VHI, which remain within the scope of mandatory health insurance, and whether additional charges may apply. After hospitalization, invoices should be sufficiently detailed and understandable to allow policyholders to identify what has been billed and on what basis.

Better communication would improve informed decision-making, reduce uncertainty, and strengthen confidence in the sector. It would also help address one of the central weaknesses identified in the analysis: the difficulty for policyholders to understand the actual content and value of VHI coverage.

Greater transparency in the VHI sector requires stronger public reporting. Systematic publication of comparable information on coverage, pricing, and use of VHI would improve accountability, support public oversight, and enable more informed consumer choice [25–27]. Public reporting could also help identify variation in practices across insurers and providers and provide a stronger basis for policy debate.

A practical first step would be the development of an official statistical reporting framework for VHI. Such a framework could include the number of people covered by hospitalization insurance, disaggregated by age, gender, and canton of residence; the type and price of coverage; and selected indicators on the use of VHI benefits. In a second phase, reporting could be expanded to include information on reimbursement patterns, billing practices, or provider-level variation. Depending on the scope of the system, responsibility for data collection and publication could lie with institutions such as the Federal Office of Public Health, FINMA, or the Swiss Health Observatory.