Yesterday I spotlighted how a recent article in Der Spiegel revealed the burgeoning costs that have already been produced by the latest reforms to the German health care system. Today I want to look at what the article has to say about how the reform has changed the incentives of doctors and sickness funds such that they now profit from making patients as unhealthy as possible – at least on paper.
With everyone required to have coverage and premiums fixed nationwide, policy experts in Germany anticipated a problem: sickness funds would look for the healthiest, youngest patients and be reluctant to cover the old or sick. Hence was born the “morbiditätsorientierten Riskoausgleichstruktur,” a mouthful that translates to “morbidity oriented risk adjustment structure” and a concept Germany has in common with countries like the Netherlands, another system sometimes held up as a model for the US.
However, although it set out to solve a real problem, it has created a new problem in the process. Since sickness funds get extra money for those with health problems included on the national list (about 80 at the moment), they have an incentive to seek out people with these conditions and to push patients who may be better served by a less serious diagnosis onto these categories. Consider the case of Jens Luther:
The 55 year old jogs, rides a racing bike, and eats carefully. As a result, he lives an almost pain free life. He is only occasionally afflicted with a sour stomach, for which each time his doctor prescribes a medicine against heartburn.
But with the health care reform, Luther’s condition has worsened considerably. His heart burn grew into a life-threatening reflux disease. The wiry top manager has become chronically ill.
Luther himself hasn’t noticed his terrible pain at all. He looks as fit as anyone; he’s doing great. And if he wasn’t the chairman of the board of the same sickness fund by which he is covered as a patient, he might never have found out that his health situation had deteriorated so dramatically.
Luther himself hasn’t noticed his terrible pain at all. He looks as fit as anyone; he’s doing great. And if he wasn’t the chairman of the board of the same sickness fund by which he is covered as a patient, he might never have found out that his health situation had deteriorated so dramatically.
This kind of reclassification is especially common because the extra the sickness funds receive often exceeds that they spend on care for the condition. For Luther, the sickness fund would get €1079 a year if he was healthy – but the diagnosis of reflux brings an extra €912 a year, even if his actual illness only costs a couple trips to the doctor and some simple prescriptions. The sickness fund then gets to keep the extra money. Der Spiegel reports that this is the case for many illnesses:
High blood pressure brings a bonus of €402 a year. Subtracted from that are average costs of €141 for two appointments with the primary care physician…and medicine (beta blockers, a tablet a day) – making a positive extra premium of €261 under the line.
An asthma patient, who goes to the pneumonologist every second quarter and uses the conventional combination spray, provides a plus of €192 a year.
The diagnosis ‘psychological depression’ brings the sickness fund nothing. It’s better when the insured has a ‘light depressive episode,’ then there is almost €1000 extra.
An asthma patient, who goes to the pneumonologist every second quarter and uses the conventional combination spray, provides a plus of €192 a year.
The diagnosis ‘psychological depression’ brings the sickness fund nothing. It’s better when the insured has a ‘light depressive episode,’ then there is almost €1000 extra.
So the sickness funds encourage doctors to look for patients who can be diagnosed with an illness that brings an extra premium, and share the profits, while people with conditions not on the government list are out of luck. Nor is there any incentive any longer to improve the health of those who are sick or at risk of becoming so. As Luther put it, “It’s totally absurd when the sickness funds have a bigger interest in the sick than in the healthy.”
You can find more information on the structure of German health care system at Biggovhealth.org, the international health care site of the Center for Medicine in the Public Interest (the public policy institute home of drugwonks.com).
