For a long time, the post of health minister was considered something of a suicide mission in the federal government. During his tenure as Federal Chancellor, Helmut Kohl wore out five party friends in this post, as many as Angela Merkel.
Major and, above all, unpopular decisions are also waiting for the successor to the still managing Minister of Health Jens Spahn. Ultimately, it is important to curb the inevitable rise in costs as a result of medical technological progress, while at the same time reducing the contribution base as a result of the rapid aging of our society.
First a few facts: In Germany there is a broad social consensus that, in principle, every approved therapy should be available to every patient without significant cost sharing. Hardly anyone in this country wants conditions like in the USA, where many cancer patients become homeless without health insurance in order to be able to pay their medical bills. Equally unpopular, however, are long lines in front of doctors’ offices and hospitals, as can be seen in public health systems.
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The consequence of such a high degree of protection is that the price mechanism that ensures the efficient allocation of scarce goods in the markets is overridden. Virtually unlimited demand therefore becomes the driver of supply costs.
Structural deficits proliferate
Because both patients and service providers have an interest in providing as many health services as possible. The legislature is therefore repeatedly forced to intervene: price specifications, quantity restrictions as well as co-payments by patients for drugs and treatments.
In the past two legislative periods, the extremely labor-intensive upswing has resulted in a lush increase in premium income, including in the health system.
Prof. Bert Rürup is President of the Handelsblatt Research Institute (HRI) and Chief Economist of the Handelsblatt. For many years he was a member and chairman of the Advisory Council as well as an advisor to several federal and foreign governments. You can find out more about the work of Professor Rürup and his team at research.handelsblatt.com.
Under the guise of gushing revenues, the structural deficits of this system could proliferate. In addition, in view of the full budget, the government decided on numerous expansions of services which – at best – could have been financed in an eternal boom.
In fact, however, revenues collapsed in the Corona recession and the reserves melted away. In order to avoid premium increases, the federal government has already injected around 20 billion euros into the health system this year; A similarly large financial injection is planned for 2022. If nothing happens, there is a risk of sharply rising contribution rates from 2023.
“If funding gaps are instead to be closed through continued and potentially increasingly extensive federal grants, adjustments to the federal budget will be necessary,” warns the Bundesbank. And continues: “Without higher taxes or savings elsewhere, there is no foreseeable scope for this in the federal budget.”
Above-average costs
What are the options for action? The best solution would be for the future government to address the structural deficiencies. The weaknesses of the German health system have been known and well documented for a long time: the medical results are mostly average – while the costs are above average.
According to the OECD, Germany spends 12.5 percent of its economic output on health services, while the similarly developed Netherlands get by with 11.2 percent. Only the health systems of the USA, Switzerland and Great Britain are more cost-intensive than the German one.
Nevertheless, Germany only ranks 24th among the 38 OECD countries in terms of life expectancy. In most of the neighboring western European countries, life expectancy is significantly higher than in Germany.
A major reason for the obvious discrepancy between high monetary input and consistently only average output is the inefficient German hospital landscape: there are too many beds in relatively poorly equipped hospitals.
In Germany there are 791 hospital beds for every 100,000 inhabitants, in the Netherlands there are 308 and in Sweden only 207. In many of the smaller clinics, the medical staff lacks the routine even for standard interventions, so that serious errors occur more often than the average.
Dual hospital financing as a problem
One cause of this overcapacity and the simultaneous underfunding of many clinics is the dual hospital financing established in 1972: The federal states are responsible for planning requirements and financing investments.
The ongoing operating costs, i.e. the treatment costs, are financed by the health insurances in the form of flat-rate per case. Since these are rather tight in international comparison, many clinics are forced to remain at least halfway profitable through a high number of operations and savings in nursing and hygiene staff.
At the same time, most of the federal states had to struggle with considerable budget deficits for years, so that savings were made in many cases, not least in the hospital sector.
In many cases, however, closure was out of the question from the point of view of the federal states, since the running costs were borne by the health insurances and violent political anger is programmed when clinics are closed. And so almost everything stayed as it is – even though every health politician knew about the inefficiency of the system.
Outpatient treatments are more cost-effective than inpatient treatments for many findings – but here, too, the costs get out of hand. On average, Germans go to the doctor ten times a year, which is almost twice as often as the Irish, for example, and almost four times as often as the Swedes. The main reason is that a doctor’s visit has been free again for individual patients since 2013.
In contrast, in Sweden, patients have to pay a practice fee of around 20 euros each time they visit a doctor. In addition, in many countries as many consultations as possible are carried out inexpensively electronically via chat or video calls.
In addition, Germany has an expensive pharmacy network. In Germany, for example, there is one pharmacy for every two supermarkets. Of the 37.6 billion euros spent on pharmaceuticals by the statutory health insurance funds, 14.7 percent remain with the pharmacies as a profit margin. This costs the statutory health insurances and thus those insured there around 5.5 billion annually.
Difficult task for the coming federal government
The next federal government therefore faces the difficult task of preparing the welfare state and thus also the health system for two demographically very difficult decades. It shouldn’t be about performance cuts.
It should rather be about the development and implementation of smart self-participation models in order to limit unnecessary use of resources. In addition, consistent digitization along the value chain of the health system could help to save administrative costs and duplicate work.
In the future, it is important to ensure that the health system remains efficient over the long term. In addition, the government will hardly be able to avoid a fundamental reform of hospital financing, an optimization of the locations and a further development of the pharmaceutical supply.
To be minister of health in the next few years is likely to be even more unpleasant than in the pre-Corona period. In addition to expertise and the proverbial “broad cross”, the next management of the Ministry of Health will need a lot of political support – because efficiency-oriented health reforms always provoke particularly massive resistance.
More: 21 tasks that the next government urgently needs to tackle