Hirslanden’s Decline in Profitability: Navigating the Challenges of Basic Insurance Treatment

The Hirslanden private hospital group is facing challenges as it mainly treats those with basic insurance, leading to a decline in profitability. There is uncertainty about the intentions of the two wealthy families behind Hirslanden’s parent company in South Africa.

In Switzerland, fewer people can afford insurance that covers additional benefits such as larger rooms, more food choices, and access to senior doctors. As a result, more patients with basic insurance are being treated in private clinics. With rising costs and a high proportion of patients with basic insurance, Hirslanden has seen a decline in profitability over the years.

To address these challenges, Hirslanden is implementing cost-saving measures, particularly in administration, and aims to increase bed occupancy to improve performance. The company’s two owners, Remgro and MSC, have long-term strategic plans for Hirslanden but there is no clarity on specific expectations from the business.

As Hirslanden repositions itself for the future, it must focus on automation and increasing efficiencies to remain competitive in the healthcare industry. Despite these challenges, Hirslanden remains one of the most profitable hospital operators in Switzerland but faces increasing competition and rising costs in the healthcare sector.