Leading international agencies have called for a shake-up of the Swiss health system, saying costs are too high and there is not enough spending on prevention work.
The Swiss interior ministry said it agreed with the findings by the Organisation for Economic Cooperation and Development (OECD) and the Geneva-based World Health Organization (WHO).
In response to the leaked report on Tuesday the interior ministry noted that some of the proposed reforms were already underway, including increased competition and improved cooperation.
A detailed statement by Interior Minister Pascal Couchepin who is charge of health issues, is expected on Thursday. The ministry commissioned the study two years ago amid ongoing debate about spiralling health costs.
According to the survey, health spending is higher in Switzerland than in other OECD countries but the Swiss are not getting value for money.
Switzerland spends 11.5 per cent of its Gross Domestic Product on health against an average of 8.8 per cent for other OECD countries. The cost of treatment is also substantially higher.
Yet despite paying more for health, the Swiss don't get a better quality of care, says the report.
In fact the authors make it quite clear that while Switzerland has the highest health-care costs in the world after the United States, other industrialised nations achieve comparable or even better results on smaller budgets.
They also note that just 2.2 per cent of the Swiss health budget goes towards prevention and promotion work compared with an average of 2.7 per cent in other OECD countries.
"By spending more on prevention, the Swiss authorities could better tackle major issues such as smoking and drinking or ensure greater awareness of mental illness and obesity," said Marc Danzon, director general of the WHO's regional office for Europe, in a statement.
The report attacks the lack of effort to convince doctors and hospitals of the need to cut costs and recommends different billing methods, such as fixed prices for different illnesses and greater use of GPs.
The WHO and the OECD favour increased competition to bring down rising health costs. They say greater use of generic medicines would help to reduce drug prices and mandatory health insurance.
They also criticise the fact that there are 26 cantonal health systems for a country the size of Switzerland. They say this makes it difficult to have a coherent strategy at a national level and prevents competition.
The WHO and OECD argue that there are big differences in health subsidies from canton to canton and suggest there should be fixed norms for the country as a whole.
"For long-term improvements to be achieved, there needs to be a change in the way the health system is run," say both organisations.
"Competition on both health insurance and the provision of health services should be allowed across cantonal borders."
With health spending set to continue to rise in Switzerland owing to the ageing population and the cost of new technologies, the report warns that immediate cost-saving measures are needed to secure the long-term financial future of the health system.
swissinfo with agencies
According to the OECD/WHO study:
The Swiss spend 11.5% of GDP on health.
The average for OECD countries is 8.8%.
From 1990-2002, health costs rose on average 2.4% a year in Switzerland.
The figure for OECD countries was 1.5%.
Health costs in Switzerland have been spiralling upwards in recent years. In 2003, they represented 11.5% of GDP, compared with 9.7% in 1995 and 8% in 1985.
Health spending amounted to SFr6,736 per inhabitant in 2003, representing a total cost of almost SFr50 billion.
As a result, health insurance premiums have been rising every year and have become unaffordable for many people.