Is It Any Easier on the Continent? German Healthcare Reform Slogs Forward

July 11, 2023
In Germany, an attempted nationwide reform of healthcare delivery, focused on hospital care access and quality measurement, highlights the challenges faced by all national health systems

When it comes to the internal reform of healthcare delivery systems, any broad systemic reform is inevitably very challenging—whether inside the U.S. healthcare system or any other. I was reminded of that fact while reading Germany’s most prestigious newspaper, the Frankfurter Allgemeine Zeitung, this morning.

Journalist Christian Geinitz, writing from Berlin, wrote a blog entitled “The Danger of a Watered-Down Reform” (in German, “Gefahr einer verwässerten Reform”), looking at the welter of challenges that German officials face in trying to improve the quality of their healthcare system and to rationalize the distribution of healthcare services nationwide. Sound familiar?

The background is this: yesterday (July 10), Federal Minister of Health Karl Lauterbach announced that a core agreement has been reached with the German federal states (like our states in the U.S.) on a plan to reorganize hospitals across Germany. Minister Lauterbach is now hoping to develop a draft law over the summer, in concert with the health ministers of the 16 states (called “Länder” in German), which have considerable devolved powers, as here in the U.S., in order to make the reform law a reality by January 1, 2024. Along with the reorganization of the hospital system nationwide, Lauterbach is also working collaboratively with state leaders on a “transparency law” that will lead to the publishing of quality data on hospitals across the country.

In his blog, Geinitz notes that “Opponents of the reform, such as the Bavarian head of department Klaus Holetschek (CSU) - who was the only minister who voted against the federal-state compromise - fear that patients will be harmed if care is streamlined. Exactly the opposite is true: If implemented correctly, the restructuring initiated by a government commission and Federal Minister of Health Karl Lauterbach (SPD) improves care because it allocates the available resources in a targeted manner. Small houses should remain in place if they offer basic care there, with large nursing and outpatient shares. In order to make ends meet financially, the hospitals, which will be called ‘Level 1’ in the future, no longer have to accept inpatient cases and offer therapies for which they are not suitable. Rather, they receive a flat-rate fee for providing primary care, largely independent of the number of cases. Complicated treatments are taken on by larger hospitals up to maximum providers such as university hospitals, where the chances of success are demonstrably better. At the same time, of course, it is important to relieve these specialists of simple cases. The system needs to breathe to both sides, up and down. It can improve health and save lives, so it's the way to go.”

As surreally complex as the U.S. healthcare system is, some level of decision-making obviously takes place here at the individual organizational level, meaning that there is some level of flexibility built in with regard to capacity management. But the German system, like virtually all the European systems to some extent—and the level of control varies very widely—is a top-down system, with nationwide control at the governmental level. And that means that any kind of healthcare system reform inevitably engenders tremendous discussion, and often, conflict.

What’s fascinating is to look transoceanically at the different challenges. Our U.S. healthcare system is both highly regulated and highly individualistic; indeed, it can become almost impossible to explain how our system works, to Europeans and other internationals. That said, systems like the German system tend to become easily hamstrung when it comes to reform, because a huge number of agreements have to be made to move forward, meaning that the kinds of experimentation that routinely take place here inside the U.S. healthcare system are far more difficult to achieve on the Continent, at least (the situation with the National Health Service of Great Britain is complex, as the British have created something of a hybrid between the centrally controlled continental health systems and our more individualistic system here in the U.S.; the health trusts have had some level of autonomy devolved to them over the past few decades).

Per that, Geinitz notes that “A key issues paper is not yet a draft law, let alone a law. Contrary to what was initially planned, it is not the federal government alone that is developing the amendment over the summer, but an ‘editorial group’ with the federal states, in which all political forces are involved: Hamburg for the SPD, NRW for the Union, Baden-Württemberg for the Greens and Mecklenburg-West Pomerania for East Germany [referencing the various states and various political parties]. The states that tend to slow down the reform rather than lead it therefore have the upper hand.”

What’s more, Geinitz writes, “Even on the fundamentals, “Even in the cornerstones, they have pushed through many rights of participation and exceptions that water down the reform. In the ‘levels,’ the quality levels for all clinics, the federal government can no longer proceed prescriptively, but only descriptively and that in a separate law outside of the reform: it does not classify the hospitals, but only describes which status quo for which level fits. It is unclear whether the patients really choose the locations according to these criteria and vote with their feet on quality.”

Does all of this sound familiar? It should. What’s fascinating for me is the parallel between the ongoing evolution here of alternative payment models (APMs) and of accountable care organizations (ACOs), and the way reform has to proceed in Germany, which is by consensus-enabled policy development. There is no single “perfect” way to do anything, and healthcare policy is immensely complex in any political system and any healthcare system. It is simply very interesting to compare which types of challenges different national healthcare systems have. The U.S. healthcare system is almost surreally complex, and the individualism built into various levels of decision-making here makes it very difficult to achieve true nationwide reforms (the last time that truly system-wide major reforms were created on a federal level was with the Affordable Care Act, and that was passed back in 2010, fully 13 years ago now); on the other hand, smaller-scale innovations are taking place here all the time that are very difficult to achieve in continental Europe, precisely because of the level of national government-level control built into those systems.

There is no ideal system anywhere; but it is indeed fascinating to watch healthcare policy leaders try to work through internal health system reform inside a very different system. Here’s hoping that Minister Lauterbach can help shepherd everyone through this current round of reforms in Germany; a successful outcome would certainly prove hope-inducing for everyone on the Continent—and perhaps even over here as well.

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