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How to fix Germany's ailing healthcare system

June 1, 2024

During the COVID-19 pandemic, Germany's Health Minister Karl Lauterbach was one of the country's most popular politicians. Now he plans to slash the number of hospitals and digitalize bureaucracy. Not everyone is happy.

Intervertebral disc surgery on the lumbar spine
In Germany, financial pressure forces hospitals to do as many operations as they can, even if they are poorly qualified to carry them outImage: Felix Kästle/dpa/picture alliance

To hear Karl Lauterbach describe it, it is nothing short of a revolution. Speaking at an annual doctors' conference in early May, the German health minister said the reform plans they had been working on for two years marked a "Zeitenwende" (turning of the times) in German health care — an allusion to the military overhaul Chancellor Olaf Scholz announced after Russia's full invasion of Ukraine in February 2022.

Some 15 different draft laws are in their "critical phase," Lauterbach told the medical professionals, all of which are part of an attempt to tackle a host of problems the country is facing — including: Too few doctors, too many empty hospital beds, too much financial pressure on hospitals, and poor digitalization standards.

The verdict on his ambitions has been divided: Doctors' associations have praised Lauterbach's intentions, while health insurers have warned they could lead to higher premiums. As Dirk Heinrich, an ear-nose-throat specialist and chairman of the doctors' association Virchowbund, told DW, the reforms are "light and shadow."

Eugen Brysch, chairman of patients' protection organization Deutsche Stiftung Patientenschutz, came to a harsher conclusion: "The Federal Health Minister has many ideas. But it is doubtful whether they are practical," he told DW.

Karl Lauterbach presenting digitalization projects in the healthcare system
Health Minister Karl Lauterbach has launched healthcare reforms on a massive scaleImage: Chris Emil Janßen/Imago Images

A new way to pay hospitals

One of the biggest and most contentious of Lauterbach's plans was approved by Olaf Scholz's Cabinet this week — a two-pronged hospital reform that will change the way German hospitals are financed and impose new care standards.

Germany has the highest number of hospital beds per capita in the European Union (7.9 beds per 1,000 inhabitants — EU average: 5.3) but maintaining these is expensive. According to Lauterbach, this has left many hospitals on the brink of bankruptcy. The result is that patients are being kept in hospital unnecessarily so hospitals can charge health insurers extra money — which in turn drives up the whole country's health costs and insurance contributions.

The reform means that hospitals will no longer be paid per treatment — instead, they will get a guaranteed income for making certain services available. This, it is hoped, will alleviate the financial pressure on hospitals to pack in as many operations and treatments as they can, even if they are poorly qualified to carry them out.

This measure is supposed to ensure that patients needing complex treatments are referred to specialists earlier. This, according to the Health Ministry, will reduce health costs in the long run, as patients stand a better chance of being cured and are less likely to fall victim to mistakes, as hospital staff will be less rushed and overworked. Lauterbach claims this reform will save tens of thousands of lives a year..

Artificial intelligence saving lives in the operating room

Too many hospitals

"The hospital reform is right and important," said Heinrich. "We do have too much in-patient care, but what is happening now is way too little. Reforming the hospitals without a comprehensive outpatient treatment reform, and without emergency care reform won't make a difference."

Brysch was also skeptical. "In the field of outpatient medical care, elderly, chronically ill and care-dependent people will find it almost impossible to find a new doctor," he said.

Germany also struggles with a lack of doctors' offices in rural areas, as fewer doctors want to live there. The Health Ministry wants to tackle this by offering clinics in rural areas extra money. Here again, Brysch was cautious: "The fact that better earning opportunities are now being created will not in itself lead to more doctors in rural areas. After all, other location factors also play a role."

One issue has been resolved in the new reforms: The cap on payments for general practitioners. Doctors have long complained about this budget limit — and occasionally gone on strike over it — because they say it often forces them to treat patients for free. Scrapping the cap, Lauterbach hopes, will provide doctors with incentives to take on more patients. Heinrich welcomed this move, but again, said it failed to go far enough. "It stops halfway, because the budgets remain in place for specialist doctors," he said. "It's no use for a patient if they get an appointment quicker at their family doctor but then have to wait months for a specialist."

A host of minor reforms

Some minor reform plans are less controversial: Lauterbach wants every patient to have a single digital medical record showing treatments and test results from all the doctors they have seen.

There are also plans to reduce waiting times at doctors' offices by allowing doctors to carry out consultations online or by telephone, and to prescribe medication for an entire year for people with chronic conditions. Up until now, such patients have had to come back to the doctor every three months to get their prescriptions renewed.

The new Krankenhaus-Atlas (hospital atlas) has already gone online. It allows patients to compare hospitals using an overview of treatment options, case numbers and the number of complications, as well as information on hospital staffing levels.

Edited by Rina Goldenberg

While you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter Berlin Briefing.

Benjamin Knight Kommentarbild PROVISORISCH
Ben Knight Ben Knight is a journalist in Berlin who mainly writes about German politics.@BenWernerKnight