back
|
 |
Misprescribing for health care
The Economist, April 12, 2001
WHAT is Germany’s new health minister, Ulla Schmidt, up to? First, she lifted the collective financial penalties imposed on doctors who overshoot spending limits on prescription drugs, thus, in effect, killing off that eight-year-old attempt to keep down soaring health costs. Now she has announced that there will be minimum rates for health-insurance contributions. This will restrict the ability of the rival schemes to compete, and so, again, to bring down costs.
Germany has a generous and expensive health-care system. Nearly 11% of GDP goes on health, a proportion second only to the United States’ 14%. Yet patient satisfaction is low, lower even than in Britain, which spends only 7% of GDP on health. And in last year’s World Health Organisation survey of health-care systems, Germany was ignominiously ranked 25th, again behind Britain (though ahead of the United States, in 37th place). In quantity and quality, Germany’s health care was good, said the WHO, but its cost and efficiency were dismal.
As the population grows older, and medicine more elaborate and expensive, reform becomes ever more necessary. The government of Gerhard Schröder has tried. But health reform, never easy, is especially difficult in Germany because of the complexity and power of the many interests involved. These include the big pharmaceutical companies, the 300,000-strong doctors’ lobby, dozens of health-insurance schemes, which reimburse doctors and run hospitals, and the 16 state governments, which build and maintain the hospitals.
The government has had one success. Under a law of 1999, hospital financing is being revamped. Instead of receiving a standard fee per patient per day, hospitals are now to get a lump sum reflecting the type of complaint being treated, regardless of length of stay. But the doctors are a tougher nut.
When it came to power in 1998, the Schröder government warned them that it would make them pay out of their own pockets if they exceeded the spending limits on prescription drugs. Much of the effect was good. Some doctors who had previously ladled out drugs like lollipops began thinking twice before writing an unnecessary prescription, or turned to cheaper, generic medicines. But there were bad effects too. Sometimes doctors avoided prescribing the best, but also costliest, medicines. Worse, some turned away patients who needed particularly expensive medication. Many, however, reckoning that they, not some bureaucrat, knew what was the best medical practice, simply carried on as before.
As the government repeated its warning of sanctions, doctors replied with demonstrations and even strikes. What especially angered them was a decision to make all doctors within a given region collectively responsible for over-prescription. As soon as she became health minister in January, Mrs Schmidt announced that doctors would not, after all, have to pay for the accumulated DM1.8 billion ($800m) drugs overshoot of the past two years. She also promised there would be no collective sanctions in future, without proposing anything to replace them. Doctors swiftly sent spending on prescription drugs up 13% higher in January this year than last.
The health insurers, which bear the cost, were not amused. They were already threatening to put up their contribution rates next year—when a general election is due—unless health spending were brought under control. In an effort to let competition make schemes more efficient and keep rates down, patients have been allowed since 1996 to transfer from one scheme to another. Millions of mostly young and healthy people have done it, pulling out of the statutory, regionally-based schemes, with rates up to 15% of a typical member’s gross income, for new company-run ones, whose rates can be as low as 11%.
The exodus has left the statutory schemes with a disproportionate number of the old and infirm, who usually cost more and contribute less, putting further pressure on rates. So Mrs Schmidt recently announced a minimum contribution rate of 12.5%. It is now employers, who pay half their workers’ contributions, and the clients of the cheaper schemes who are hopping mad. |
