Analysis of selected merger cases from Switzerland [12.02.2020]
We discuss how the EU applied the SIEC test in cases comparable to Swiss merger cases
We investigate proposed mergers that are contested from a competition-policy perspective in four industries (wholesalers and retailers, telecommunications and media sectors). We are interested to know the extent to which mergers in Switzerland would be assessed differently under the «Significant impediment to effective competition» test (SIEC Test) already implemented by the European Commission and by EU member states in general. In this regard, a Swiss case is compared with a corresponding merger case from the EU. However, due to case-specific market conditions, no direct transferability is possible. However, we are demonstrating that the SIEC test is particularly suitable for blocking mergers that are harmful to competition. The merger control could be harmonised with those in the EU. The WEKO would benefit more from the experiences of the EU competition authorities. Contradictory decisions could be avoided.
Efficiency comparisons for German distribution network operators [09.12.2019]
Polynomics supports the German energy distribution network operators with the efficiency comparisons of the third regulation period.
The consultation editions of the expert reports for the determination of the efficiency figures of the German electricity and gas distribution network operators were published in December 2018. Polynomics supported the industry through these processes with the «Benchmarking Transparenz, BMT» project, which had been initiated by the German business organisation for the energy and water industry (Bundesverband der Energie- und Wasserwirtschaft e.V. – BDEW), the German Association of Local Utilities (Verband kommunaler Unternehmen e.V. – VKU) and GEODE, a trade association that represents independent energy distribution and distribution-related companies. We analysed and assessed the expert report and supported the companies with their responses.
We recalculated the final efficiency figures that had been determined by the Federal Network Agency (Bundesnetzagentur – BNetzA). We were able to reconstruct almost all of the results. To do so, we prepared standard analyses for all project participants, which contained the traceable results and numerous other relevant analyses and performance indicators in the form of an Excel tool.
We also prepared a report containing text and images on the creation and development of the individual efficiency figures. This report accurately explained how the efficiency figures were created in the third period and which changes since the second period were crucial for the development of each individual efficiency figure. We then held several online conferences during which the contents were discussed in even greater detail.
We currently support network operators aiming to take legal action against the specified efficiency figure by re-assessing the expert reports from the perspective of the respective companies in order to find methodical points for complaint.
New employee at Polynomics [01.11.2019]
As of 01 November 2019, the Polynomics team has expanded to include Dr. Florian Kuhlmey.
As of 01 November 2019, the Polynomics team has expanded to include Dr. Florian Kuhlmey. Dr. Kuhlmey studied economics at Freiburg im Breisgau and gained a doctorate from the University of Basel in (amongst other things) empirical health economics. In addition, Dr. Kuhlmey has also gained practical experience at the energy regulation and energy cartel authorities for the German federal state of Baden-Württemberg. He thus has outstanding expert knowledge of the Polynomics specialisations. Alongside his work at Polynomics, Dr. Kuhlmey is also active in research and teaching in a post-doctorate capacity at the Faculty of Economics of the University of Basel.
Nemo Datenpool für Lokalnetzbetreiber Gas [26.06.2019]
Seit Mitte Juni haben lokale Gasnetzbetreiber die Möglichkeit, sich zum Quervergleich ihrer Struktur und Kosten anzumelden.
Im Auftrag des Verbands der Schweizerischen Gasindustrie (VSG) baut Polynomics einen branchenweiten Datenpool zur Analyse betriebswirtschaftlicher und regulatorischer Fragestellungen für Lokalnetzbetreiber auf.
Mit dem Nemo-Datenpool erhalten die Teilnehmer ein Werkzeug, um ihre Struktur-, Kosten- und Tarifsituation genauer zu durchleuchten und sich mit den besten und/oder ähnlichen Unternehmen zu vergleichen. Datenpoolbasierte betriebswirtschaftliche Analysen objektivieren die Grundlagen von operativen und strategischen Entscheidungen und geben Sicherheit bei der Argumentation gegenüber externen Anspruchsgruppen.
Die Branche als Ganzes erhält mit dem Datenpool ein Instrument, um Entwicklungen im Bereich der Gasnetze zu beobachten und Fakten in die politische und regulatorische Debatte einzubringen.
Economics of the Swiss Healthcare Policy [25.06.2019]
Why healthcare reforms have a hard time in Switzerland.
Repeated normative studies with recommendations from politicians on the reform of the Swiss healthcare sector have been published for many years. As a rule, such studies do meet with agreement, and yet their recommendations are not, or incorrectly, implemented in political practice. A consensus about the existence of disincentives and inefficiencies in the healthcare sector is therefore not enough to rectify these issues. What are the main causes of this reform paralysis and which measures could be taken to overcome them?
With financial help from the Bonny Stiftung für Freiheit foundation and in cooperation with Markus Saurer, we analysed this question on the basis of three example reform projects that have been repeatedly debated in Parliament since the launch of the Swiss Health Insurance Act (Krankenversicherungsgesetz) in 1996.
Our analysis shows that planned healthcare reforms always hit a barrier when the cantons tend not to be interested or a group of stakeholders provides evidence of sufficient support from the citizens, or has the same interests as the citizens, so that a referendum would be a tangible threat. The cantons are particularly good at stifling unpopular reform proposals before any actual debate and vote in Parliament. They are therefore acting as the veto players in the healthcare system.
Mehrjahresvergleich der Verteilnetzbetreiber Strom [09.05.2019]
Im Auftrag des VSE/AES Datenpools © haben wir erneut einen Mehrjahresvergleich erstellt, mit dem die VNB ihre Entwicklung über die letzten acht Jahre verfolgen können.
Der Mehrjahresvergleich ermöglicht es den Verteilnetzbetreiber, die Entwicklung zentraler Kennzahlen ihres Unternehmens im Vergleich zu anderen Datenpool‐Teilnehmern zu beurteilen und Handlungsbedarf für ihr Unternehmen abzuleiten. Zudem erleichtert es ihnen der Vergleich, Rückfragen der ElCom zu Veränderungen von Kostenpositionen im Zeitablauf besser einzuordnen.
Die Teilnehmer des VSE/AES Datenpools © mit Modul Mehrjahresvergleich erhalten einen individualisierten Bericht unserer Analyse.
Considerable changes in the efficiency comparison of German distribution network operators [28.03.2019]
The efficiency comparison of German distribution network operators for the third regulation period results in some considerably adjustments of the selected methodology
The Federal Network Agency compared the efficiency of German distribution network operators with some delays, especially in the gas sector. The efficiency values were determined which now primarily impact the income of network operators in the current third regulation period.
Whilst the previous concept for the electricity sector was mostly retained and developed further and a standardised linear model was used for the parametric method (SFA), comprehensive changes were implemented in the gas sector.
The omission of the mandatory parameters in the amended legislative text of the ordinance on incentive regulation (Anreizregulierungsverordnung – ARegV) enabled the experts and regulators to fundamentally revise the process. The linear form was replaced in favour of a translog function. This scientifically well-founded function facilitates a flexible and rather comprehensive cost clarification. As expected, the efficiency values of numerous companies also increased as a result. However, the same, method-based, highly limited set of reference parameters was used for the non-parametric method (DEA). The efficiency of companies which previously received their best value from the DEA declines as a result – quite considerably in some cases. It remains to be seen if some of the companies will take legal action and contest the process, either for a lack of continuity of the efficiency comparison or entirely different reasons.
Nemo Tool Costs and WACC calculator for 2020 tariffs of the Swiss Association of Gas Indus-try (VSG) [27.03.2019]
The entirely revised Nemo Tool for gas distribution network operators is available for download on the VSG extranet.
The new Nemo Tool Costs complies with the classification scheme of the revised basic Nemo document (industry standard doe determining network usage fees in local natural gas networks). It supports gas distribution network operators with deriving and documenting the costs for the local network usage fees.
The VSG also published its WACC recommendation for 2020 tariffs.
The VSG makes these documents available free of charge to its members on its extranet.
Regulatory impact assessment: Reference pricing system [21.12.2018]
Regulatory impact assessment for the introduction of a reference pricing system in the market for patent-expired drugs
Together with Interface and the University of Basel, Polynomics carried out a regulatory impact assessment on the introduction of a reference pricing system in Switzerland on behalf of the Federal Office of Public Health (FOPH) and the State Secretariat for Economic Affairs (SECO). The reference pricing system (RPS) in the market for patent-expired drugs is a planned measure, which the Federal Council intends to implement to contain costs within the framework of Health 2020.
The study shows that it is plausible that an RPS can achieve the desired goal of reducing compulsory health insurance costs through lower drug expenditure. Short-term savings in the low three-digit million range are expected. However, the desired effect will be offset by undesired effects due to a (partly temporary) deterioration in patient safety and security of supply compared to the status quo. The cost-benefit ratio for the population from these opposing effects cannot be estimated because it is unknown whether the disbenefit of potential deteriorations in patient safety and security of supply is greater than the benefit from the savings in compulsory health insurance costs and thus in health insurance premiums.
Banks and insurers in Switzerland 2017 [21.11.2018]
The financial sector is an important economic pillar
Our study shows: The financial sector remains one of the most important sectors of the Swiss economy. With gross value creation of approximately CHF 60 billion, the financial sector contributed around 9.2 percent to total gross value creation in Switzerland in 2017, which is significantly above average compared with other countries. The financial sector employed around 207,500 people (full-time equivalents) in the past year, which corresponds to a year-on-year decrease of 1.2 percent. One main reason for this reduction in jobs was the transfer of one major bank’s central services to an internal service provider of the group.
In addition to the development of value added and employment in the Swiss financial sector, we also analyse its fiscal significance and its contribution to growth compared to other sectors and other countries. As a final step, we assess the short and medium-term development of the financial sector.
Social partnership and social security in the digital age [18.10.2018]
Together with 16 partners, Dr. Hans Werder, Dr. Peter Müller and Polynomics have developed impulses on social partnership and social security in the digital age.
These recommendations and reform ideas on behalf of the CH2048 Foundation are strongly based on models that have already been tried and tested in practice. Since it has been possible to bring together employee and employer organisations as well as well-known companies, the proposals drawn up are likely to be politically acceptable to a majority. Over the next few years, these recommendations and reform ideas are to be widely discussed and subsequently further deepened and substantiated.
The Effect of EFAS on the Premiums of the HMO-insured [16.09.2018]
Under EFAS a larger part of the cost savings in HMO models can be passed on to the HMO-insured in the form of premium reductions.
In the current financing system of the compulsory health insurance (OKP), health insurers pay 100% of outpatient costs and a maximum of 45% of inpatient costs. Cantons then pay the remaining 55% of inpatient costs .This system of dual-fix hospital financing has long been the subject of criticism because it is associated with various disincentives. For instance, insurers have a reduced incentive to realize cost savings for the HMO-insured in the inpatient sector since they can only pass 45% of these savings on to the HMO-insured in the form of premium reductions. Using the results of a 2017 study on the cost savings of HMO-Models this report estimates the effect of EFAS on the health care premiums for the HMO-insured.
Based on these calculations, the insurance companies could pass on around CHF 200 to every HMO-insured in the form of a premium reduction under EFAS. Currently these savings are captured by the cantons. With the introduction of EFAS, the health care premiums of the HMO-insured could thus be reduced by around 6%, which corresponds to an increase in the current discounts of around 20%.
Start of key performance indicator and efficiency benchmarking 2018 activities [14.09.2018]
Swiss electricity distribution network operators now can transfer their final ElCom cost calcula-tion for 2019 tariffs to Polynomics.
Polynomics is starting its key performance indicator and efficiency comparison 2018 activities within the scope of the VSE/AES Datenpool© after the expiry of the general submission deadline for ElCom questionnaires. This benchmarking provides the participating distribution network operators with the opportunity to compare each other’s detailed key performance indicators. The key performance indicator and efficiency benchmarking is based on the annual regulatory cost calculation that Swiss distribution network operators have to submit to the regulator (ElCom).
Study "Vision Employer Policy 2030" [15.06.2018]
Polynomics designs scenario-based future visions and guidance for the employer policy in Switzerland.
Polynomics has been requested by the Swiss Employers Association (SAV) to develop scenario-based future visions for the employment market. The effects on the industry sectors and professional competence requirements are presented on the basis of these future visions. The study results will be used for specific fields of action: The pension age has to be more flexible. Incentive systems have to be created to ensure that working at retirement age is worth it. Reforms of employment and social insurance law have to be considered to ensure that new forms of employment develop in line with social requirements. Migration has to be designed so that the number of vacancies increases and the lack of qualified employees eases. In terms of vocational training and training for employees, ways have to be found for the compulsory curriculum at schools to be able to focus more on the requirements of the future employment market and living environment despite federalism.
Importance of the health service in the Canton of Aargau [14.06.2018]
The health service – a highly complex system and pillar of growth for the economy in Aargau
Polynomics was requested by the Association of Clinics, Hospitals and Care Institutions in Aargau (VAKA) to analyse a study on the economic importance of the healthcare sector with special focus on institutions with in-patient facilities in the Canton of Aargau as well as various potential savings measures in the healthcare sector. The results show that the healthcare sector is a key employer in the canton and has contributed significantly to both the number of jobs and added value growth in the canton over the past five years. When comparing the canton’s spending on health at an inter-cantonal level, it becomes apparent that the Canton of Aargau spends significantly less than most of the other cantons despite demand for healthcare services being average. With this in mind, Polynomics reviewed various savings measures, such as the "Out-patient over in-patient" reform and the implementation of a global budget. All of the savings measures reviewed have in common that they are being implemented within a highly complex system. Their effects can therefore not be reliably anticipated and often undesired effects in other parts of the overall system or outside the healthcare sector are to be expected.
10-year anniversary [25.03.2018]
Polynomics celebrates its 10-year anniversary this year.
Polynomics has been active as a specialised consulting company since 01/01/2008 and has made a name for itself in the sectors of energy, health, telecommunications and financial markets in Switzerland, Germany and Austria. Due to a combination of proven economical tools, methods and industry knowledge together with experience in implementing complex themes in a practice-oriented way, we have been able to implement a number of projects for our customers over the past 10 years. We are pleased to be able to start the next 10 years with you and thank you for the loyalty you have shown already.
New employees at Polynomics [24.03.2018]
At the start of year, we welcomed 2 new consultants to Polynomics.
At the start of 2018, we welcomed Dr. des. Beatrice Mäder as a new consultant. Ms Mäder has a Bachelor of Arts in International Relations from the University of Geneva and a Master of Arts in Economics from the University of St. Gallen. She wrote her dissertation on the topic of public finances and health economics at the University of St. Gallen. She is a consultant at Polynomics and a lecturer in micro and macroeconomics at the University of St. Gallen.
Marc Bill also joined Polynomics as a consultant. He has a Master of Arts in Economics from the University of Zurich and further training in the area of survey techniques (Utrecht, NL) and project management. Prior to his employment at Polynomics, he was a scientific employee in the faculty of Finance and Macroeconomics at the University of Zurich and at the University of Applied Sciences of North-West Switzerland (FHNW) and also a project manager for performance audits at tarifsuisse AG.
German gas distribution network operators: 3rd regulation period [01.01.2018]
The third incentive regulation period for German gas distribution network operators began on 01/01/2018.
As before, the corresponding ruling chamber of the Federal Network Agency (BNetzA) is behind schedule with key tasks. Thus the report on the individual efficiency value will probably only be published in spring 2018. Polynomics provides the industry data pool together with PwC and, and will after publication of the report, support the participants of the data pool project with corresponding sensitivity calculations relating to the efficiency value.
Paediatric hospitals [21.12.2017]
We have analysed the causes of service-related additional costs in children’s hospitals using the case costs of Swiss network hospitals.
The Alliance of Paediatric Hospitals (AllKidS) has asked SwissDRG AG to review the accuracy of the SwissDRG tariff structure in the area of specialised paediatric medicine. SwissDRG AG subsequently commissioned Polynomics to create a study of this type for them.
In the study, we identified possible causes of service-related additional costs in paediatric hospitals. We then used the case costs of Swiss network hospitals to empirically review the hypotheses.
The results confirm that, in the case standard cost comparison, most additional costs are not caused by inefficiencies. On the contrary, the specialised paediatric hospitals take on an end carer role for children and, with regard to the costs, they are thus particularly affected because they must treat the most expensive patients at the end of the treatment chain.
The study and the reaction of SwissDRG AG can be found on the SwissDRG-homepage under SwissDRG