A modern remuneration system for an integrated health insurance system

>> In fact, it seems that the decision hasn't even been made in a drawer yet. The timing of the report's delivery couldn't have been worse. The day before the report was delivered, a man in Germany had tested positive for the coronavirus for the first time. In the second half of the 19th legislative period, health policymakers, and Karl Lauterbach in particular, had only one topic. It was all about incidence rates and hardly any point values.
Supply policy contexts
But the pandemic hasn't simply made other political issues disappear. Quite the opposite: Along with social inequalities, the virus has also exposed imbalances in the public health system: from the grotesque pay of nursing staff and the underfunding of the public health service to outdated hospital planning, not to mention the systemic deficits in digitalization and the incomprehensible inaccessibility of routine data from everyday healthcare.
However, the pandemic is also further evidence of the dysfunctionality of a healthcare system that is financed in a highly unequal manner by two insurance systems. To illustrate this with just two small examples from everyday life during the pandemic: The health insurance funds and private health insurance companies were required to inform certain vulnerable groups of people about their entitlement to FFP2 protective masks, for which they received 60 cents per letter sent (Section 8 of the Coronavirus Protective Mask Ordinance – SchutzmV). The costs (approximately 17 million euros) were covered from the Health Fund's liquidity reserve (Section 8 (2) SchutzmV), which was then offset by the federal budget (Section 10 (2) Sentence 1 SchutzmV). The private health insurance companies did not contribute to the costs, even though their insured members were among those entitled to receive them (Section 1 (2) SchutzmV). The organization and financing of the testing centers are also noteworthy: The service providers involved bill the Association of Statutory Health Insurance Physicians (Kapitalärztliche Vereinigung) for the services they provide to the Association of Statutory Health Insurance Physicians (Kapitalärztliche Vereinigung) in whose district the service provider is located (Section 7 (1) of the Coronavirus Testing Ordinance – TestV). Thus, although they are actors in the statutory health insurance system, they also assume administrative responsibility for private health insurance policyholders. Financing, in turn, takes place exclusively within the statutory health insurance context: The associations of statutory health insurance physicians (Kapitalärztliche Vereinigung) bill the costs incurred to the Federal Office for Social Security, which in turn reimburses the costs from the Health Fund's liquidity reserve (Section 14 (1) Sentence 3 of the TestV) and then receives reimbursement from federal funds (Section 15 (1) Sentence 2 of the TestV). Here, too, the private health insurance (PKV) is neither involved in the administration nor in the financing, although its policyholders are also entitled to testing (Section 1 (2) of the TestV).
These examples, which could be expanded upon at will, are set in the larger context of an outpatient medical care system that is organized almost exclusively within the statutory health insurance system (KOMV 2019, 157). While there are two insurance systems, there is only one healthcare system. In addition to needs planning, which is left solely to the actors of the joint self-administration of the statutory health insurance system (§§ 99ff. SGB V), this particularly concerns quality assurance, which is largely controlled by the guidelines of the Federal Joint Committee and then concretized by the differentiated review and approval systems of the associations of statutory health insurance physicians and the health insurance funds. The private health insurance system benefits from this organization of the healthcare system, which is financed by contributions from the statutory health insurance system, without participating financially in it. It has therefore always been a free rider of the complex system of joint self-administration in the statutory health insurance system. However, a second regime of planning and quality assurance alongside the statutory health insurance system would also be uneconomical given the comparatively small number of private health insurance policyholders and would obviously be dysfunctional due to the necessary coordination processes with the statutory health insurance system.
Interestingly, the PKV Association, in particular, likes to point out in this context that the insured members of member companies contribute disproportionately to the financing of outpatient medical care due to the higher medical remuneration compared to the SHI system.2 In fact, the relevant studies largely unanimously show a difference in remuneration levels by a factor of 2.3 (KOMV 2019, 249-254) – which ultimately means that services provided to PKV insured persons are reimbursed almost twice as well as to SHI insured persons. Firstly, however, this does not compensate for the actual system costs, because PKV remuneration benefits the individual doctors, but not the complex infrastructure of the joint self-administration that organizes and finances the care system. Secondly, they are financed to a not insignificant extent by the tax-financed subsidy systems of the federal and state governments and thus also by SHI insured persons. Almost half of all private health insurance policyholders are eligible for assistance (Kingreen 2018, 49). Third, these differences, in turn, pose a problem for the uniformity of outpatient medical care provision: They are likely to favor private health insurance policyholders in accessing outpatient medical services3 and, in any case, offer no incentive to settle in regions with fewer private health insurance policyholders.4
Insurance policy contexts
From an insurance policy perspective, the rationale of dualism is also unclear, even under the most charitable consideration (Kingreen 2013, K19 ff.). It is unclear which sociopolitical criteria are used to distinguish between the two insured classes. The allocation of insured persons to statutory health insurance and private health insurance can be explained by historical paths, but from today's perspective, it appears rather random and hardly justifiable rationally (Huster 2011, 24). Due to statutory allocations and incentive effects (namely, the subsidy, which makes insurance for civil servants in the statutory health insurance system economically pointless), there are hardly any options for switching. It remains a mystery how one can, on the one hand, praise the advantages of system competition, but then, on the other, declare the insured person to be so immature that they cannot freely choose between the systems. Several federal states (Hamburg, Bremen, Berlin, Brandenburg and Thuringia) are now trying to break this rigid allocation for their newly hired civil servants by offering them the option of claiming a flat-rate allowance, equivalent to half the contribution to statutory health insurance (GKV) or half the contribution for the basic tariff in private health insurance (PKV), instead of the individually calculated allowances for illness-related expenses (Hamburg Model, see Kingreen 2018, 46ff.).
It is also somewhat counterintuitive that there is no competition for existing customers in private health insurance due to the limited, or even non-existent, possibility of transferring aging provisions (cf. Section 204 Para. 1 Sentence 1 No. 2 a) Insurance Contract Act (VVG)) (Monopolkommission 2017, 7: "almost non-existent"). There are, however, "good reasons to assume that competition in which private health insurance companies compete for insured persons leads to greater efficiency of the insurance system" (Monopolkommission 2017, 7). The lifelong commitment of privately insured persons to their companies is all the more difficult to justify from a regulatory policy perspective given that, precisely among statutory health insurance funds organized as public corporations, competition exists through additional contributions, regular voting rights, and cancellation options (Section 175 SGB V), which has already led to significant switching processes in the past. So, authorities are in competition in the healthcare system, but companies are not – a topsy-turvy world for a market economy.
The 2021 election manifestos
For about two decades, the topic of "citizens' insurance" has cropped up with great regularity in federal election campaigns, usually disappearing just as quickly afterwards (Kingreen 2017, 841f.). Nevertheless, the establishment of a remuneration commission after the 2017 federal election was an essential component of the compromise that enabled the SPD to enter the coalition with the CDU/CSU. Therefore, this year, it is worthwhile to at least briefly look at the election manifestos of those parties that realistically have prospects of participating in government in the 20th legislative period.
Reading the manifestos is very sobering for two reasons. First, they largely repeat the same phrases as in the past two decades;5 only the party manifesto of Alliance 90/The Greens contains somewhat more concrete proposals among the slogans.6 Second, the election manifestos that advocate for a transformation of the dual health insurance system into an integrated one do not contextualize the different reimbursement regimes for medical services; either the topic is not mentioned at all (SPD, THE LEFT) or it is addressed in a different context (Alliance 90/The Greens7).
This is somewhat surprising, given that at the time, the SPD had pushed for the establishment of the KOMV precisely because it saw the equalization of remuneration as an essential prerequisite for cross-system voting rights. In fact, these voting rights will be meaningless without equal access to specialist medical services. Even if there is no clear evidence that the different remuneration levels affect waiting times (KOMV 2019, 255-259), no one will choose an insurance plan where they have to expect to wait longer due to less favorable remuneration for their doctor – and this insurance plan is currently the GKV. The Hamburg model in five federal states mentioned above will therefore also be unsuccessful. Why should a civil servant without pre-existing conditions choose the GKV, for which they pay higher premiums, at least at a young age, and potentially have to wait longer for specialist medical services than those insured with PKV?
Reforming the physicians' remuneration system therefore remains key to reforming the dual health insurance system. Therefore, the objectives and results of the KOMV will be briefly summarized below—assuming that election programs have a short half-life anyway.
Goals of a modern remuneration system
Based on hearings with relevant healthcare stakeholders and extensive evaluations of the scientific literature, the Scientific Commission initially defined the objectives for a modern reimbursement system (KOMV 2019, 368-380). In doing so, it also countered the misconception that there are two fee schedules.
A uniform fee schedule, in the form of the GOÄ, exists only for the treatment of private health insurance policyholders. It has legal effects only in the relationship between the policyholder and the treating physicians and the reimbursement providers (private health insurance companies and subsidy providers). It contains the service descriptions relevant to these legal relationships without providing a comprehensive list of services and – directly related to this – regular adjustment obligations. Remuneration law is characterized by the fact of “medical necessity,” while cost-effectiveness as a legal principle is practically meaningless. This is reflected in the fact that individual services are always reimbursed and that volume-controlling elements are missing. However, the GOÄ does not establish any legal relationships between physicians and reimbursement providers. Remuneration disputes are therefore always settled via
to the insured. Furthermore, due to the lack of a service provision law, private medical remuneration law is not institutionally linked to quality assurance and needs planning systems.
The statutory health insurance system, on the other hand, does not have a uniform fee schedule, but rather a two-tiered corporatist negotiation regime between health insurance associations and the associations of statutory health insurance physicians, the result of which is a total remuneration, which is then distributed proportionally to individual physicians by the associations of statutory health insurance physicians in a final fee distribution regime (§§ 87ff. SGB V). The core element of the corporatist negotiation regime at the federal level is the EBM (German Fee Schedule), which, while containing a definitive catalog of services, merely assigns points to services, which are subsequently multiplied by regionally agreed and differentiated point values. This then results in 17 regional fee schedules, which, however, do not establish individual fee entitlements but are decisive for determining a total remuneration, which is then distributed among the contracted physicians. Remuneration is often flat-rate, and at all levels, incentives as well as volume and caseload-limiting elements are in place. This system is in constant flux due to its legally stipulated annual adjustments.
Against this backdrop, a discussion guided by the notion that two remuneration systems should be merged misses the point. Rather, it is about developing core elements of a parliamentary regulatory framework: For the collective agreements concluded by self-governing bodies in the statutory health insurance system, as well as for the GOÄ (General Fee Schedule of Medical Fees) issued as a ministerial legal order, it is necessary to ask what constitutes good remuneration law and what parliamentary requirements must be placed on remuneration regulations accordingly – regardless of how they are created. Above all, good remuneration law must meet the following requirements and moderate the conflicts of interest that arise:
• It must ensure equal access to medical care based on medical necessity and urgency. This also includes taking regional differences, such as age structure and morbidity, into account through appropriately differentiated incentives.
• It may only reimburse services that meet the recognized state of medical knowledge and do not exceed what is necessary. Therefore, it must be institutionally linked to quality assurance and cost-effectiveness control mechanisms.
• It must be periodically adjusted and adaptable in order to be able to take into account medical progress as well as changing social conditions and attitudes.
• It may and must create incentives through different forms of remuneration, for example by providing individual service remuneration for services that are particularly worthy of support and at the same time by using instruments to limit the number of cases and quantities for services that are provided excessively.
• It must take into account the cross-sectoral incentive effects, in particular preventing outpatient services from being provided in hospitals.
• It must ensure doctors an adequate income and take into account their need for planning security.
• Finally, a decision must be made as to whether these requirements and the balancing of interests can be better ensured through state law or through negotiation regimes, or whether the existing differences should remain in place.
Commission recommendations for a
modern remuneration system
Measured against these goals for a modern reimbursement system, a uniform reimbursement system for outpatient medical services would offer a number of advantages (KOMV 454-460). Long-term economic synergies would arise, as two service lists with their respective calculation systems would no longer need to be developed in parallel. Knowledge and data could be consolidated, thus improving cost calculation, reducing financial disincentives in treatment decisions and improving the quality of care. Transparency regarding the provision of services and practicality in everyday medical practice would be increased.
However, a uniform remuneration system would also pose significant challenges. Given the different levels of remuneration in the statutory health insurance and private medical sectors, standardization would either reduce the current physician fee volume or require additional funding to maintain it through statutory health insurance contribution increases or a federal subsidy from tax revenue. The question also arises as to the preservation of statutory health insurance control mechanisms that are not effective in the private medical sector, such as budgeting (for medical insurance services), regionalization (regional Euro fee schedule), and individual fee distribution criteria for each individual medical insurance provider.
The Commission has therefore advocated the concept of partial harmonization. Its appeal lies in the fact that it formally maintains system separation and should thus be acceptable even in the conservative political camp, but it can also be seen as a first step toward full harmonization if partial harmonization proves suitable for meeting the stated objectives of a modern remuneration system.
The proposal differentiates between the definition of medical services (service definition) and the relative cost assessment of services, on the one hand, and the prices for these services, on the other. While the service definition and relative cost calculation are to be developed by joint committees of statutory health insurance and private medical care, prices are to continue to be negotiated on this basis in dual negotiation regimes (joint statutory health insurance self-administration or private health insurance/BÄK). In addition to costs, regional, specialty-specific, volume-related, and other – overarching – aspects can also be taken into account, in particular the medical benefit or eligibility of a service for funding, or the general level of remuneration.
A central element of the proposal is the transformation of the cumbersome regulatory regime in private health insurance into a negotiation regime. This proposal was not too difficult for the Commission, as the German Medical Association and the PKV Association have been "negotiating" a new GOÄ for years. The idea that private sector actors should negotiate the content of state regulations is not legally tenable, but it also demonstrates that the previous regime was not suitable for reflecting medical innovations in reimbursement both quickly and with legal certainty. The proposal is therefore "honest in its role" and assigns the German Medical Association and the PKV Association the roles they have already effectively assumed.
The differentiation between common and separate components also makes sense with regard to quality assurance. Minimum standards are defined jointly and uniformly for statutory and private medical care for reasons of patient protection. However, requirements beyond these standards are open to negotiation in the spirit of comparative system competition.
The Commission therefore concludes as follows: "The proposed model offers numerous advantages with regard to the requirements of a modern reimbursement system. Transparency and practicality are increased, and after additional short- and medium-term expenditure, long-term synergy effects can be expected, as two service lists no longer need to be developed separately. Combining knowledge and data from the statutory and private medical sectors can improve cost calculation. Cost-based cost calculation as a basis for price negotiations, in turn, is a prerequisite for avoiding perverse incentives for under- and over-provision. At the same time, major redistribution effects and the risk of a secondary market are avoided, as price differences between the statutory and private medical sectors can be maintained. This model does not raise any concerns under constitutional or EU law; the requirements contained in Chapter 3 must be taken into account when designing the model in detail" (KOMV, 460).