Pharmaceutical spending is currently the focus of the health policy debate. However, one aspect has barely been addressed so far: the significant regional differences. As figures from INSIGHT Health show, the spending differences between the KV regions amount to over 150 euros per insured person.

>> The German government's so-called pharmaceutical savings package has taken a comprehensive approach: In addition to the increased compulsory discount, which has been in place since August 1, 2010 (through inclusion in the Act Amending Health Insurance and Other Provisions), the following changes, among others, will be added at the turn of the year as a result of the Pharmaceutical Market Restructuring Act (AMNOG), which was passed by the Bundestag on November 11, 2010:
• Price negotiations on medicines with new active ingredients,
• Alignment of vaccine prices to international levels,
• reduced margin of pharmaceutical wholesale,
• increased pharmacy discount and
• adjusted prescription surcharges for parenteral solutions.

In addition to these nationally applicable regulations, it is also worthwhile to look at the regional distribution of pharmaceutical expenditures. Statutory health insurance (GKV) pharmaceutical expenditures per insured person vary by up to 37.6 percent (based on the current twelve-month value from the INSIGHT Health NVI-KV database). With a nationwide average of €458 per GKV insured person, the KV Bavaria is at the lower end with €412, and the KV Mecklenburg-Western Pomerania is at the higher end with €567.

East-West divide increases
A clear east-west divide is evident (see Figure 1). This has already been documented in previous studies (see, for example, INSIGHT Health/IGES: Pharmaceutical Sales in the KV Regions 2007 and 2008). It is noteworthy that, with the exception of Saarland, all KV regions with above-average per capita expenditures also showed an above-average increase in expenditures compared to the previous year. Furthermore, the highest increase rates were recorded in the three KV regions with the highest expenditures per insured person. Conversely, there are only two regions with below-average per capita expenditures that recorded a (slightly) above-average increase (KV Hesse and KV Westphalia-Lippe).

Conclusion: The gap is widening further.
There are numerous reasons for these regional differences: from average age and income level, to the density of general practitioners and specialists, to the prescribing behavior of doctors.
The exact relationships are by no means trivial, as the potential influencing factors are not independent of one another. INSIGHT Health has conducted a descriptive regional analysis, which—without claiming to be exhaustive—can contribute some interesting aspects to the discussion.

The East is aging (faster)
While in Hamburg and Bavaria only one in five GKV insured persons is over 65 years old, in the former East German states this is already the case for one in four. In the 20- to 50-year-old age group, whose contribution payments on average exceed health care expenditures, the opposite picture emerges: their share is 45 percent in Hamburg and 41 percent in Bavaria, for example, but only 38 percent in the former East German states (see Table 1).
The age distribution has also continued to diverge over the past ten years: The number of insured persons over 65 has increased by over 25 percent in the new federal states, while the overall number of insured persons has declined, and in Brandenburg by as much as 36 percent. In Hamburg, by contrast, the number of insured persons in this age group increased by only 11 percent, and in Bavaria by a still below-average 19 percent.
For those aged 20 to 50, the opposite picture emerges: While the number of statutory health insurance policyholders in this age group fell by only three percent between 2000 and 2010 in Bavaria and even rose by seven percent in Hamburg, in the new federal states their number fell by an average of 17 percent.

Older = more expensive?
As Figure 2 shows, the proportion of people over 65 is highly significantly correlated with the different per capita expenditures in the individual regions (r = 0.616). The "outliers" of Schleswig-Holstein and Brandenburg on the one hand, and Hamburg and Berlin on the other, can be partly attributed to the so-called surrounding area effect: the outpatient care systems of the city-states are also used by residents of the surrounding areas. However, age is not a sufficient sole explanatory variable. For example, if one exclusively considers the KV regions of Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt, and Thuringia, one might get the impression that a higher proportion of people over 65 results in lower pharmaceutical expenditures. Therefore, further explanatory parameters should be sought.
INSIGHT Health therefore also examined other parameters as part of its current regional analysis**, which will only be briefly outlined here. For example, physician density (number of physicians per 100,000 insured persons) is often used to explain differences in outpatient spending. However, this correlation is only partially present at the level of the overall pharmaceutical market and can primarily be used to explain the above-average pharmaceutical spending in Hamburg and Berlin. In these city-states, physician density is a good 35 percent higher than the national average.
Another parameter explaining the differences in spending lies in the prescribing behavior of physicians themselves. While this also depends on the structure of the insured and patient clientele, the insured structure does not explain all differences. For example, the six KV regions with the highest per capita expenditures have the highest prescription shares of patent-protected drugs and above-average aut idem rates. The aut idem rates also reveal significant differences between the individual KVs: While aut idem is excluded from one in four prescriptions in the KV Schleswig-Holstein, physicians in the KV Bavaria mark the box for less than one in twelve prescriptions.
Given the high spending pressure, every potential savings opportunity should be utilized. And in this regard, as the results of the regional analysis outlined here demonstrate, it seems worthwhile to look beyond the KV borders.

by: Christian Bensing/Dr. André Kleinfeld