Targeted Promotion of Care Quality – How Financing and Impact Can Be Aligned

Care costs are rising, the shortage of skilled workers is worsening – and more and more people are asking how quality in long-term care can be ensured in the future while remaining financially sustainable.

Martin Eling, Professor of Insurance Economics at the University of St. Gallen (HSG), discusses viable financing models, the role of outcome-based approaches – and why targeted investments in care quality can make economic sense.

Martin Eling, Professor of Insurance Economics at the University of St. Gallen (HSG), is an internationally recognized expert in risk management, social insurance, and the economic evaluation of healthcare and long-term care systems. He is Director of the Institute of Insurance Economics (I.VW-HSG), Dean of the School of Finance, and has received multiple awards for his research and teaching.

Prof. Eling, your studies show that long-term care costs will nearly double by 2050. What structural or systemic changes are necessary to ensure that quality and affordability can go hand in hand in the future?

Aligning quality and affordability requires a three-pronged approach.

In my view, aligning quality and affordability requires a three-pronged approach: First, targeted relief for professional caregivers through technology-supported processes and better task distribution. Second, stronger incentives for prevention and assisted living in order to avoid or delay institutional care. And third, a recalibration of the financing model that fairly distributes the burden among the state, insurers, and individuals – especially given the high out-of-pocket contributions.

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To what extent do you see a stronger outcome-based approach in the remuneration of long-term care as necessary – for example, by taking into account measurable results such as resident satisfaction, psychosocial well-being, or the prevention of social isolation? What economic opportunities or risks would be associated with such an approach?

It can serve as a lever to promote care quality in a targeted way.

A stronger focus on outcomes – for instance, through indicators of quality of life, satisfaction, or the prevention of isolation – can serve as a lever to promote care quality in a targeted way. From an economic perspective, the advantage lies in a more efficient use of resources: funds flow to where they actually lead to better results. At the same time, there is a risk that complex care services may be overly simplified or standardized if only certain measurable outcomes are rewarded. A balanced, evidence-based approach is therefore crucial.

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From an economic perspective, are there good reasons to invest specifically in care quality – such as stable teams, individual attention, or voluntary social services – even if these may cause higher short-term costs?

[...] these are preventive investments with long-term return potential.

Yes, absolutely. Investments in stable teams, individualized care, and social services can not only increase the satisfaction of those in need of care but also reduce costs in the long term – for example, through fewer hospital admissions or lower staff turnover. Economically speaking, these are preventive investments with long-term return potential, both financially and socially.

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The share of care costs borne by care recipients is already high in Switzerland by international standards. What measures could be taken to reduce this financial burden without jeopardizing the sustainability of the system?

A more socially balanced distribution of care costs is needed

In the long run, a more socially balanced distribution of care costs is needed. Options could include mandatory supplementary long-term care insurance with income-based contributions, or a long-term care fund that individuals pay into during their working years. At the same time, efficiency reserves in the system should be tapped – for example, through coordinated care, improved digitalization, or the reduction of misaligned incentives. It is crucial that the relief provided to care recipients is not achieved at the cost of structural underfunding of the system.

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In light of demographic changes and rising care costs: What role do you see for innovative technologies, such as care robots, and organizational measures, such as enhancing the care profession, in improving the efficiency and quality of long-term care?

Technology and organization are not ends in themselves, but must be used strategically to strengthen human-centered care.

Technologies such as care robots or digital assistance systems can take over routine tasks and thereby relieve care staff – however, they are no substitute for human closeness. Even more important is the enhancement of the care profession: through better working conditions, career opportunities, and societal recognition. Only if we succeed in attracting and retaining more people in the profession can the quality of long-term care be ensured. Technology and organization are not ends in themselves, but must be used strategically to strengthen human-centered care.