Competition policy for health care provision in Germany

doi:10.1016/j.healthpol.2016.11.014

Health Policy

Volume 121, Issue 2, February 2017, Pages 119-125

https://doi.org/10.1016/j.healthpol.2016.11.014 Get rights and content

Highlights

•
Selective contracting in Germany required financial incentives or mandates to conclude contracts.
•
A key issue of selective contracting is the readjustment of payments for the collective systems.
•
There is evidence that selective contracting has improved quality of care.
•
The evidence on selective contracting points to cost increases, at least in the short run.

Abstract

Since the 1990s, Germany has introduced a number of competitive elements into its public health care system. Sickness funds were given some freedom to sign selective contracts with providers. Competition between ambulatory care providers and hospitals was introduced for certain diseases and services. As competition has become more intense, the importance of competition law has increased. This paper reviews these areas of competition policy. The problems of introducing competition into a corporatist system are discussed. Based on the scientific evidence on the effects of competition, key lessons and implications for future policy are formulated.

Introduction

Traditionally, Germany’s social health insurance system is governed jointly by associations. The national association of sickness funds, the national and regional associations of physicians and the German Hospital Federation negotiate contract conditions and payment schemes for ambulatory and hospital care. In the 1990s, however, competitive elements were introduced in the system. The first major reform concerned sickness funds. Since 1996, almost all individuals insured in the social health insurance system can choose freely among sickness funds. This has fundamentally transformed the funds from administrative entities into service-oriented institutions.

Initially, sickness funds had few possibilities to influence the provision of health care services as these were predominantly determined by collective negotiations and legal requirements. Inspired by managed care in the US, sickness funds were given some freedom to sign selective contracts with providers in the late 1990s. Today sickness funds offer Disease Management Programs, Integrated Care Contracts and Gatekeeping Contracts. The vast majority of health care services, however, continue to be managed by the corporatist system.

A prominent feature of the German health care system is the strong separation of the outpatient and inpatient sector. Hospitals are mainly restricted to inpatient care. Outpatient specialist care is provided by physicians with specialist training. In the last decade, some competition between the sectors was introduced. Hospitals were allowed to offer ambulatory care for specific diseases and for certain specialized services. Hospitals also opened medical treatment centers for patients seeking outpatient care. Both, hospitals and ambulatory specialists, offer ambulatory surgeries.

As competition in German health care has become more intense, the importance of competition law has increased. Selective contracting by sickness funds is subject to competition law. The competition authority is also responsible for mergers of sickness funds and of hospitals. Between 2004 and 2014, 182 hospital mergers were approved and 7 prohibited.

This report provides information on these areas of competition policy in Germany. In Section 2, a short overview of the German health care system is given. In Section 3, competition policies are reviewed. Section 4 concludes with key lessons and implications for future policy. The focus is on competition between health care providers. Section 2 also provides summary information about health insurance competition.

Section snippets

Basic characteristics

In 2014, Germany spent 11.2% of its GDP on health care [1]. Most health care expenditure (66%) was financed by “Statutory Health Insurance” (SHI, Gesetzliche Krankenversicherung), the public health insurance program in which sickness funds provide health insurance. A share of 9% was paid for by the private health insurance system which insures public servants, self-employed persons and individuals who opt out of SHI. The remaining share was financed by private households and non-profit

Review of competition policies

Two elements of competition are very present in German SHI. First, sickness funds compete for SHI-members. Second, SHI-members have free choice between SHI-affiliated physicians (general practitioners as well as ambulatory specialists) and between hospitals. This creates competition for patients in areas with a high density of suppliers. In addition, the introduction of DRGs has intensified competition in the hospital sector. However, the German SHI system is mainly run by collective

Key lessons and policy implications

In the last decades, Germany has introduced a number of competitive elements into its corporatist public health insurance system. Selective contracting between sickness funds and providers was regarded as a way to improve quality and efficiency by encouraging better coordination and cooperation in health care. However, it took some time before sickness funds took initiative. An important lesson is that contracting only got started when either further financial incentives were given, as in the

Acknowledgments

This research is supported by the Health Foundation, an independent charity committed to bringing about better health and health care for people in the UK. The views expressed in this paper and in the case studies are those of the authors and do not necessarily reflect the views of the funders.

References (32)

D. Achelrod et al.
Cost-effectiveness of the German disease management programme (DMP) for chronic obstructive pulmonary disease (COPD) — a large population-based cohort study
Health Policy
(2016)
Bundesamt für Statistik. Gesundheitsausgaben. Wiesbaden;...
Bünnings C, Schmitz H, Tauchmann H, Ziebarth NR. How health plan enrollees value prices relative to supplemental...
H. Schmitz et al.
Does price framing affect the consumer price sensitivity of health plan choice?
Journal of Human Resources
(2017)
J. Brosse et al.
Direct risk selection in the German health insurance system: a field experiment (unpublished manuscript)
(2016)
Bundesamt für Statistik. Kostenstruktur bei Arztpraxen 2011. Wiesbaden;...
K. Roll et al.
Effect of type of insurance and income on waiting time for outpatient care
The Geneva Papers on Risk and Insurance—Issues and Practice
(2012)
M. Karlsson et al.
Exit, voice or loyalty? An investigation into mandated portability of front-loaded private health plans (unpublished paper)
(2016)
R. Busse et al.
Germany: health system review
Health Systems in Transition
(2014)
Bundesamt für Statistik. Grunddaten der Krankenhäuser. Wiesbaden;...

Deutsche Krankenhausgesellschaft. Bestandsaufnahme zur Krankenhausplanung und Investitionsfinanzierung in den...

P. Lorson et al.

Qualitätsberichte verfehlen ihre zielgruppe

Führen & Wirtschaften im Krankenhaus

(2011)

A. Wübker et al.

Does better information about hospital quality affect patients’ choice? Empirical findings from Germany

Jahrbücher für Nationalökonomie und Statistik

(2010)

A. Pilny et al.

Does hospital reputation influence the choice of hospital? Ruhr economic papers #516

(2014)

D. Cassel et al.

Vertragswettbewerb in der GKV. Möglichkeiten und Grenzen vor und nach der Gesundheitsreform der Großen Koalition

(2008)

Bundesversicherungsamt

Zulassung der strukturierten Behandlungsprogramme (Disease Management-Programme — DMP) durch das Bundesversicherungsamt

(2014)

Cited by (21)

What Really Matters? Organizational Versus Regional Determinants of Hospitals Providing Medical Service Centres
2020, Health Policy
Citation Excerpt :
Physician density [32] and number of beds are indicators of adequate health service supply and competition in the district. Because of increasing competition between outpatient health care providers and hospitals when operating an MSC [33], we hypothesize that hospitals in districts with high bed density are more likely to provide outpatient services via an MSC. The individual-level hospital data of this study are based on the structured quality reports of German hospitals.
By adding medical service centres (MSCs) to their range of services, hospitals can participate in the outpatient sector. The aim of the MSC guideline (2004) was to ensure high quality health care in rural areas. It is unknown if organizational or regional factors influence hospitals providing services via MSCs. Our analyses focus on the identification of factors that explain the operation of an MSC by hospitals. The data are based on the mandatory structured quality reports of German hospitals (n = 1,605). These organizational data (teaching status, size and ownership) are supplemented by settlement structure and contextual data (e.g., location, doctor density). We estimated a cross-sectional multilevel logistic regression model to identify determinants of hospitals operating MSCs.
In 2017, 27% of 1,605 hospitals had one or more MSCs. On an organizational level, for-profit ownership (-) and the number of beds (+) were significant determinants of providing MSCs. The analyses show that the interaction between settlement structure and ownership has an influence on the operation of an MSC. Organizational factors determine the provision of MSCs, with regional determinants playing a role as well. This indicates that hospital behaviour is difficult to predict and that individual factors shape both profit orientation and responsibility for sufficient health care in the region.
Do small hospitals have lower quality? Evidence from the English NHS
2020, Social Science and Medicine
Citation Excerpt :
Our analysis does not provide any strong support for the proposition that small NHS acute hospitals in England provide generally lower quality to their patients. One explanation for our findings is that small NHS hospitals in England are larger than small hospitals in other OECD countries (Vaughan et al., 2018): for example, France has over 2000 hospitals (Choné, 2017), Germany had about 1980 hospitals in 2014 (Kifmann, 2017). Thus small English hospitals may be large enough to have exploited any scale economies in the provision of quality.
We investigate the extent to which small hospitals are associated with lower quality. We first take a patient perspective, and test if, controlling for casemix, patients admitted to small hospitals receive lower quality than those admitted to larger hospitals. We then investigate if differences in quality between large and small hospitals can be explained by hospital characteristics such as hospital type and staffing. We use a range of quality measures including hospital mortality rates (overall and for specific conditions), hospital acquired infection rates, waiting times for emergency patients, and patient perceptions of the care they receive. We find that small hospitals, with fewer than 400 beds, are generally not associated with lower quality before or after controlling for hospital characteristics. The only exception is heart attack mortality, which is generally higher in small hospitals.
Changing of China׳s health policy and Doctor–Patient relationship: 1949–2016
2017, Health Policy and Technology
To identify the changing of health policy decisions and Doctor–Patient relationship in different periods in China during 67 years (1949–2016).
We followed a systematic approach to analyze the development stage of China׳s healthcare reform and Doctor–Patient relationship over time. Based on the extant literature and statistical data, the current five issues in Chinese health policy and three aspects of Doctor-Patient Relationships are classified. The reasons for the current situation and recommendations for future policy are discussed.
There are four main problems of Chinese Health Policy: funding shortage, excessive market-oriented operation, health insurance limited reimbursement amount, and media coverage a lot of non-neutral health events. In different historical periods, these problems are not prominent, but have become increasingly serious in recent years. On the other hand, three participants contributed to the growing tense relationship between doctors and patients: doctors (hospitals), patients and governments.
In formulating future health care policy, the government should change: increase investment in the medical field, change the income structure of doctors and hospital, propagate medical news in an objective way, and increase the amount and scope of medical insurance repayment.
Policies towards hospital and GP competition in five European countries
2017, Health Policy
Citation Excerpt :
Unlike Disease Management Programs, Integrated Care contracts can substitute for services included in collective agreements with subsequent transfer correction from sickness funds to regional physician associations. Little is known about the effectiveness of these contracts [13]. In Norway hospitals have been paid by DRG since 1997 as part of a mixed payment system in which the price initially covered 30% of treatment costs.
This study provides an overview of policies affecting competition amongst hospitals and GPs in five European countries: France, Germany, Netherlands, Norway and Portugal. Drawing on the policies and empirical evidence described in five case studies, we find both similarities and differences in the approaches adopted. Constraints on patients’ choices of provider have been relaxed but countries differ in the amount and type of information that is provided in the public domain. Hospitals are increasingly paid via fixed prices per patient to encourage them to compete on quality but prices are set in different ways across countries. They can be collectively negotiated, determined by the political process, negotiated between insurers and providers or centrally determined by provider costs. Competition amongst GPs varies across countries and is limited in some cases by shortages of providers or restrictions on entry. There are varied and innovative examples of selective contracting for patients with chronic conditions aimed at reducing fragmentation of care. Competition authorities do generally have jurisdiction over mergers of private hospitals but assessing the potential impact of mergers on quality remains a key challenge. Overall, this study highlights a rich diversity of approaches towards competition policy in healthcare.
Commodification and healthcare in the third sector in England: from gift to commodity—and back?
2024, Public Money and Management
Reasons for merging and collaborating in healthcare: Marriage or living apart together?
2023, International Journal of Health Planning and Management

View all citing articles on Scopus

View full text

Competition policy for health care provision in Germany

Highlights

Abstract

Introduction

Section snippets

Basic characteristics

Review of competition policies

Key lessons and policy implications

Acknowledgments

Health Policy

Does price framing affect the consumer price sensitivity of health plan choice?

Journal of Human Resources

Direct risk selection in the German health insurance system: a field experiment (unpublished manuscript)

Effect of type of insurance and income on waiting time for outpatient care

The Geneva Papers on Risk and Insurance—Issues and Practice

Exit, voice or loyalty? An investigation into mandated portability of front-loaded private health plans (unpublished paper)

Germany: health system review

Health Systems in Transition