Steps toward a two-class health system in Germany

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Steps toward a two-class health system in Germany
By Dietmar Henning
5 October 2010

On September 22, the German government passed a resolution on health reform that
constitutes a further step toward a two-class system of medical provision.
Statutory public health insurance will deteriorate into a scheme offering
coverage of only basic requirements, uncertain at that, while many services will
be affordable only for high-income earners.

This, the eighth reform in 20 years, will not only lead to deteriorating medical
care and increasing costs for the 70 million people in the state’s compulsory
health system. Philipp Rösler (Free Democratic Party, FDP), the federal minister
for health, is also setting the course for the total abolition of this kind of
insurance, which originated in the 19th Century.

New regulations concerning contributions to health insurance companies, along
with possible additional contributions, undermine the shared (according to
income level) and equal (in relation to employer and employee) financing of the
compulsory health insurance system.

The contribution rate to the health fund, from which insurance firms receive
their money, will rise next year from the current 14.9 percent of the gross wage
to 15.5 percent (paid jointly by employer and employee). The former Social
Democratic and Green federal government had already abolished the system of
equal contributions in order to benefit employers. According to the new
regulations, from 2011 the insured will have to pay 8.2 percent and employers
7.3 percent of the total membership rate. From then on, the employer’s
contribution rate will be “frozen”. All future contribution increases will then
be financed solely by employees.

The draft law allows statutory health insurance funds to raise the rate of
additional contributions, unrelated to the member’s income, when they need more
finance than that assigned to them by the state health fund. Although the
government avoids the term “capitation fee” (a per capita premium), the
additional contributions amount to just that. The maximum charge was initially
fixed at €75 per month.

An adjustment in line with income will be made only when the “average additional
contribution” exceeds 2 percent of the gross income. The additional contribution
can also be more than 2 percent for some insured members, if their firm requires
a contribution rate that is higher than the average of other firms. Experience
shows this will soon be the case for funds with many elderly or low-income members.

Whoever fails to pay an additional contribution should count on being fined. The
law permits the health insurance firms to levy a “default surcharge” of at least
€30. The highest fine amounts to three-times the additional contribution, i.e.,
€225.

The unemployed will also have to pay the capitation fee if they receive
Unemployment Benefit I, generally for those jobless for less than a year. In the
case of recipients of Unemployment Benefit II (Hartz IV), the capitation fees
and the income-related adjustments of all insured people will be financed from
taxation resources. This will initially be covered by the exceptional €2 billion
that the federal ministry for finance has allotted to the state health fund as
“reserve liquidity” until 2014.

However, this money may soon be used up. Hence, further state-financed
contribution adjustments for the socially disadvantaged will always be subject
to the conditional endorsement of the government.

The introduction of the capitation fee is supposed to promote more competition
among the insurance firms. According to the neo-liberal FDP health minister,
this will lead to savings in state expenditure. But capitation fees have nothing
to do with reducing the cost of health care, as experience in neighbouring
countries shows.

In the Netherlands, where a switch to financing medical costs via capitation
fees was made four years ago, expenditure has increased more than in Germany.
Health insurance firms in the Netherlands have reacted to this by raising the
capitation fees. In the meantime, about 80 percent of people with health
insurance have become dependent on financial support from the state, because
they are unable to afford the premiums.

Furthermore, the government’s draft law contains hidden cuts for clinics and
doctors that will mainly be shouldered by patients and employees in the clinics.
Hospital charges will be allowed to increase by only 0.25 percent per year until
2012. The German Hospital Society warns that clinics will face additional
expenditure of €1.5 billion, owing to standard wage increases, as well as higher
medical and unemployment insurance contributions for their staff. The deficit of
€1 billion, arising from the limit placed on charges, corresponds to 20,000 jobs
that will have to be cut in the clinics.

Additional fees, claimed by general practitioners and amounting to €500 billion,
are to be saved. Rösler intends savings of at least €850 billion in relation to
doctors of state insured patients. As expenditure on so-called “extra-budgetary
services” is to be reduced, restrictions on health care and rationing of medical
services are bound to occur. This is because “extra-budgetary services” include,
for example, medical check-ups and early detection screenings, outpatient
operations and dialysis. The price increases charged by dentists will be reduced
by €20 million in 2011 and by €40 million in 2012.

On the one hand, medically insured people will be fleeced in the name of
competition. On the other, they face exploitation from health insurance firms
and the pharmaceutical industry. One of Rösler’s first official acts was to
bring Christian Weber, the former leading lobbyist for private health insurance
firms, into his ministry as head of the policy department. Now the private
insurance companies can directly cash in on Rösler’s personal choice of personnel.

In line with the first stage of the Pharmaceutical Economy Law, the drug
industry was obliged to make savings of €2 billion by August 1, by—among other
means—increasing manufacturers’ discounts from 6 percent to 16 percent. This is
turning out to be an absolute sham. Drug producers can count on continued
maximisation of profits on new drugs, because—at the request of the
pharmaceutical industry—their medical value will be decided in accordance with
guidelines set by the government and not, as planned, by the health insurance
funds and doctors.

Other regulations, stemming from the Pharmaceutical Economy Law, will also be
evaded by producers. Drug manufacturers will not have to grant higher discounts
if they lower the prices of their medicines. Some companies increased the prices
of their drugs by 10 percent shortly before the new rules came into force, and
reduced them by 10 percent shortly after, thereby avoiding having to offer
higher discounts.

An investigation carried out by the ministry of health found such price
manipulation in relation to 455 drug products sold by 17 different firms.
Consequently, Rösler announced that those firms found to be carrying out such
practices would have to pay an additional discount of 4.5 percent. However, the
new draft law takes no account of this.

According to the current draft law, the next “reform of the health system” is to
take place no later than 2012. Far more comprehensive attacks on health care can
then be expected. Rösler has set out to do this by launching the capitation fee,
to be known as an “additional contribution”. The media and leading functionaries
in the world of health care are already preparing these attacks.

Jürgen Graalmann, chairman of the AOK insurance company, said that the recent
decision to reform health care has “stabilized” it, at least for the time being.
He added that, “This breathing-space must now be used for a genuine reform of
the whole system”, and called for “more competition, not over contributions, but
for the best kind of care”. The “enormous potential for efficiency in health
care provision must be fully exploited”, he said.

Spiegel Online commented as follows: “In plain words: Yes to the right of
insurance firms to determine contribution rates; but at the same time,
cost-cutting till it hurts”. The website published another commentary,
presenting the current and the previous health care reforms as “great swindles”,
and drawing the conclusion that the real question was: “Can we afford to prolong
life medically at any cost?” Consequently, it is argued, the issue for future
health care reforms will be, “how best to distribute limited resources”.

The author Sven Böll cited Britain as an example. There the question has already
been put and answered. In the British National Health System, a scientific
institution checks not only the effectiveness of new medicines, but also how
long they extend the patient’s life and how much quality of life is gained from
them. However, whether the medicine is then authorised depends ultimately on the
price: “Because a further year of life of sufficient quality—as concluded by the
British institute—will normally cost at most £30,000 (about €35,000)”.

Böll remarked that, because this approach “was so drastically reminiscent of the
abominable Nazi doctrine ‘unworthy life,’” German politicians, in contrast to
those in Britain, would only debate the issue on the quiet.

But both the debate and the rationing of medical services have become routine in
Germany. Jörg-Dietrich Hoppe, president of the German Medical Association,
reported at the start of the year that certain medical services were no longer
available for every patient in the country.

“Today, not every cancer patient receives the very expensive cancer medicines”,
Hoppe told the Frankfurter Allgemeiner Sunday newspaper. Owing to budgetary
pressure, doctors and hospitals decide which patients it is worthwhile giving
expensive individual treatment. Hoppe claimed that, “German health care service
is secretly rationed, because there is not enough money available to provide
everyone with the optimal therapy. Generally, the patient knows nothing about this”.

It should be added that this applies to patients with statutory, but not
private, health insurance coverage.

http://wsws.org/articles/2010/oct2010/germ-o05.shtml

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