"Pricey health system delivers mediocre outcomes at best"
Unsustainable Financial Strain on Statutory Health Insurers: Economist Urges Immediate Reforms
Germany's statutory health insurers are facing a significant financial shortfall, with costs steadily rising. Economist Nicolas Ziebarth attributes this to inefficiencies within the healthcare system, resulting in high costs and mediocre performance. However, Ziebarth believes this predicament offers an opportunity for reforms, which could concurrently reduce costs and enhance the quality of care.
ntv.de: How grave is the financial predicament of the statutory health insurers?
Ziebarth asserts that the current revenues are insufficient to cover the insurers' expenses. As a result, they resort to increasing additional contributions, a financial burden that ultimately falls on employers and insured individuals. With pension and long-term care insurance also struggling financially, this cumulative strain is an imminent concern.
Early Start: Health Minister Presents Planned Reforms
Despite an average additional contribution increase of 0.8 percentage points in 2025 and many statutory health insurers raising their additional contributions further, a deficit of 5.5 billion euros is expected this year. In the short term, the additional contributions of several insurers would need to escalate by another half percentage point to cover expenditures if the government does not provide tax money or compensate for insurance-related services imposed on the insurers. The government intends to shore up this financial gap with tax money in the short term, avoiding an increase in contributions this year. However, the underlying issues remain unresolved, costs continue to escalate, and further increases are anticipated in the subsequent years. Therefore, immediate action is imperative, preferably within the next or at most the following year. The 2028 federal election campaign is already on the horizon.
Trust in the Healthcare System Declines Rapidly
A staggering 92 percent of the population doubts the reliability of the healthcare system. With a commission slated to recommend reforms by 2027, some question why the federal government has not commenced implementation.
Addressing Fundamental Structural Reforms
Technical and institutional complexities underpin the difficulty of implementing reforms instantly. Issues such as mandatory referrals for specialists, fixed general practitioners for every insured individual, and GP availability in every region necessitate careful consideration. For this reason, a commission has been established to present results within two years. Coalition partners may subsequently argue about the implementation details, potentially leading to delays and political discord.
International Comparisons
Despite spending second only to the United States in healthcare costs, Germany's healthcare provision is only mediocre overall. The coordination of patients within the healthcare system is particularly poor, leading to unnecessary duplications, incorrect treatments, and under-, over-, and mis-treatment. Fortunately, reductions in costs and improvements in the system can be achieved simultaneously. This may seem improbable, but it is achievable. While long-term trends show that costs will increase due to demographic changes, as is the case in all developed countries, we can influence the rate of increase without compromising the quality of care.
Potential for Cost Reductions
Countries such as Switzerland and Finland offer examples of healthcare systems that perform better than Germany's while spending less of their GDP on healthcare. Switzerland consistently ranks high in healthcare quality and accessibility, spending around 11-12% of its GDP on healthcare. Finland, on the other hand, offers universal healthcare, focusing on preventive care, and typically spends around 9% of its GDP on healthcare. While comparing countries directly is challenging due to varying healthcare outcomes and expenditures, Finland might be an example where slightly lower spending is coupled with high-quality care.
Slowing the Rate of Expenditure Increase
The goal should not just be to reduce costs but to slow their growth to prevent the financial burden from escalating further. In 2021, costs rose by six percent, while economic growth was minimal or nonexistent. Consequently, an increasingly large proportion of the national wealth was allocated to healthcare. The aim should be to flatten this spending trajectory over the long term.
Contribution Rates
The average contribution rate is often considered, but there can be stark differences between the various statutory health insurance funds. Reforms should aim to ensure that in ten years' time, contribution rates are not significantly higher than they are now. Insured individuals should explore switching to cheaper funds as there can be substantial savings - up to two contribution points (around 900 euros per year for an average earner) between funds, as the services provided by statutory health insurance are typically standardized and similar.
Revenue Sources
While broadening the base of revenue sources, such as including people with higher incomes, civil servants, and other types of income, may seem sensible, Ziebarth opposes this. He maintains that such measures do not alleviate structural problems or enhance the quality of care in Germany. Instead, he advocates for relieving lower-income groups from social insurance contributions, arguing that this would significantly increase the work incentive for many in the low-wage sector.
Max Borowski interviewed Nicolas Ziebarth
Sources: ntv.de
- Health politics
- Health reform
- Doctors
- Statutory health insurance
- Social systems
- The financial predicament of statutory health insurers in Germany necessitates immediate reforms, as highlighted by Economist Nicolas Ziebarth, due to inefficiencies within the healthcare system causing high costs and mediocre performance.
- In light of the financial challenges faced by pension and long-term care insurance, alongside the statutory health insurers, modifications in the health and wellness sector could potentially provide solutions for various medical-conditions while reducing costs and enhancing the quality of care.
- Community policy changes should also address the underlying structures of the healthcare system, including issues such as mandatory referrals for specialists, fixed general practitioners for every insured individual, and GP availability in every region, to enable cost reductions and improvements in the system.
- As the business world continues to evolve and politics shape debates, it's essential to consider the broader implications of financial reforms in the healthcare sector, such as their impact on employment, general-news, and the economy, to foster a sustainable financial landscape for all citizens.
