In March 2022, Lauterbach shared a non-authorized draft of his reform plans to stabilise the SHI funds finances. However, this draft version was withdrawn a few days later again.
Now, on 28 June 2022, the German Health minister, Dr. Karl Lauterbach, has presented his new cost saving plans. Shortly after, the draft law on the financial stabilization of statutory health insurance (GKV-FinStG) was revealed on 4 July 2022.
Reason for the new law
Over the last years, the health care expenditure increased immensely (more than 4% per year), but the increase in income of SHI funds from insurance premiums was small. This resulted in an all-time-high deficit, estimated at about €17 bn. Lauterbach sees this deficit as a failure of his predecessor, Jens Spahn.
Without any new measures, the deficit requires an average increase in insurance premiums by 1% in 2023 (from 1.3% to 2.3%). Then, the premiums would need to be increased by 0.2 or 0.3% every year.
However, instead, Lauterbach wants to introduce measures to spread the cost savings across clinicians, pharmacies, the pharmaceutical industry and payers, and not solely the insured population.
Three key measures to increase income
The German finance minister, Christian Lindner, set out three strict criteria for the health care reforms and cost containment measures:
- no further debt,
- no supplementary budget,
- and no tax increases.
Therefore, Lauterbach’s draft aims to reduce the deficit by about €16 bn and stabilise the SHI finances by increasing the income of the health fund with three key measures:
- an increased tax subsidy of €2 bn, and a federal loan of €1 bn,
- an increase in the additional insurance premiums by 0.3 points, and
- an increase in efficiencies through other measures.
The draft law still has to undergo departmental voting.
Tax subsidy and loan
Tax payers will have to cover another tax subsidy of €2 bn, which goes to the health fund. In addition, the budget for 2023 also includes a federal loan of €1 bn to the health fund.
Savings from SHI funds
SHI funds need to reduce their financial reserves to the legal minimum. This budget of about €4 bn will directly go the health fund.
In addition, there will be a cap for the administration costs of SHI funds at 103% of the previous year. Also these cost savings will go to the liquidation reserves of the health fund.
Insurance premiums
Lauterbach proposes to increase the average additional insurance premiums from 1.3% to 1.6%. He estimated that this planned increase will result in an additional €4.8 bn to €5 bn.
There will be no cuts in services to patients.
Other measures
An additional €3 bn should be achieved by increasing efficiencies.
Ambulatory care
Lauterbach stated that the honoraria paid to clinicians and hospitals will remain the same, and there will be only “minor amendments”.
However, the draft act to stabilise the SHI finances suggests to remove the “new patient regulation” that was introduced with the TSVG. This regulation rewards clinicians with €10 for every new patient. The removal of this regulation was strongly criticised by clinician associations, as the incentive is a critical part of the honoraria. They estimated that this means €300-400 mn less for clinicians.
Furthermore, despite the claim of no service cuts to patients, the removal of the “new patient regulation” will have a big impact on patients. With reduced honoraria, clinicians will have to cut back on their service offerings. This will results in fewer appointments and longer wait times, thereby directly impacting patients.
Dentists
The fee system for dentist will be amended. Lauterbach proposes to cap the point values and total fees for contractual dental treatments. This will lead to reduced spending for the SHI funds in 2023 of around €120 mn and in 2024 of around €340 mn.
Hospital sector
In the care sector, Lauterbach has identified a contribution that can result in double payments. He plans to remove this loophole.
He also wants to reduce the number of nursing staff in hospitals that are considered in the care /nursing budget. From 2024, costs of qualified nursing staff can be taken into account in the budget only if the staff is used in direct patient care on wards with beds.
Pharmacies
Pharmacies also have to contribute to the “efficiency improvements”. The mandatory discount given by pharmacies (German: “Apothekenabschlag”) will be increased from €1.77 to €2.00 for two years. This will provide €170 mn for the health fund.
Pharmaceutical industry
Lauterbach announced that the pharmaceutical industry has to give “solidary contributions” in 2023 and 2024. The amount is depending on their profit, totalling €1 bn across all companies per year.
He justified these with the major growth in profits over the last years.
In addition, he plans drastic changes to AMNOG and drug pricing, with significant consequences for the pharmaceutical industry.
Pricing
- The price cap for products outside of reference price groups (German: “Preismoratorium”) will be in place for another 4 years. The cap means that SHI funds will not pay more for a drug, even if manufacturers increase their prices.
- The final reimbursement price negotiated between a manufacturer and the GKV-SV applies retroactively from month 7 after launch onwards. Currently, the price applies from month 13 onwards. This will result in savings in the ambulatory sector of €150 mn per year.
- Lauterbach wants to introduce additional considerations in price negotiations. For example, the price negotiations should include price-volume agreements or caps on annual prescription volumes. Also, wastage due to inefficient package sizes should be accounted for. The estimated savings from this are €50 mn per year.
- The GKV-SV should have a stronger position in the price negotiations by setting price thresholds and limits based on the additional benefit assigned by the G-BA. The GKV-SV should benchmark these limits against the price of the appropriate comparator therapy (ACT), if this is still under patent protection.
- No additional benefit > Reimbursement price below that of ACT
- Minor or not-quantifiable additional benefit > Reimbursement price consistent with ACT
- Considerable or major additional benefit > No price limits or thresholds
- For ACTs with patent protection that were not subject to an additional benefit assessment, a discount on the price will need to be considered.
- These price limits and thresholds are assumed to result in savings of €250 – €435 mn per year.
- Furthermore, for certain drugs used in combination, the price negotiations have to include an additional 20% discount, resulting in another €185- €250 mn in savings.
Orphan drugs
As previously announced, Lauterbach wants to limit the special status of orphan drugs. Now, annual sales of an orphan drug exceeding a €20 mn threshold (instead of the current €50 mn threshold), will trigger a full early benefit assessment. This will result in savings of €100 – €200 mn per year.
Other measures
He did not share details and was vague on two further measures:
- Reducing the deficit in the flat rates for recipients of unemployment benefit II (ALG II)
- Structural reforms in the hospital sector
Comments from the Green party
The Green Party feels that his draft to stabilise the SHI fund finances still leaves a lot of unanswered questions and room for discussion. They are also worried that the savings are expected to come from the service providers, i.e. clinicians, hospitals and the care sector, all of which are already struggling financially.
The coalition contract between the government parties included the dynamization of the federal subsidies or better financing of the contributions of ALG II recipients. The reforms, therefore, need to include this now, but it was still missing.
The SHI funds need more income, but at the same time, many insured people need financial relief. So instead of the increase in the insurance premiums, the Green Party are proposing to raise the insurance premium limit. In 2022, this limit is €58,050 per year or €4,837.50 per month. Up to the limit, the insurance premiums are based on the income. Any income above this limit is free from insurance premiums. By raising the limit, the bulk of the contributions would be “carried by strong shoulders” (i.e. people with a higher income), thereby protecting the majority from increased premiums.
Further, the Green Party is asking for an increase in the federal grants for Hartz 4 recipients and refugees from Ukraine.
They also emphasised that it was even more important to use the healthcare budget effectively, i.e. for more prevention and better working conditions.
Comments from the clinician association BÄK
The BÄK strongly criticised the proposed deletion of the new patient regulation, which will reduce clinicians’ honoraria. While this might provide some short-term cost savings, overall it will increase the pressures on clinicians and the healthcare system even more. The BÄK foresees that this will result in even more young clinicians deciding to not set up an office, and existing offices to be closed.
As an alternative, they propose the reduction of VAT on drugs, which would provide some financial relief for hospitals.
Comments from the GKV-SV
The GKV-SV wants to see a solution for the flat rate insurance premiums from recipients of unemployment benefit II (ALG II). They estimated that this was too low by about 2/3.
The SHI funds are organizing and paying for the health care of recipients of the ALG II, but are receiving €10 bn less from taxes per year than what they spent.
The GKV-SV also flagged that the decrease in the financial reserves of SHI funds was associated with risks.
Representatives of individual SHI funds also raised immense critique. The proposed cost measures in the draft would not result in a sustainable solution to stabilise the SHI fund finances but offer only short-term relief.
Further reading related to HTA in Germany
- Which endpoints are important to the G-BA and IQWiG?
- How does the G-BA pick the appropriate comparator?
- When can an off-label drug be the appropriate comparator therapy?
- Regular and abbreviated early benefit assessments – Is this the end of orphan drug privileges?
- HTA guide
- EUnetHTA21 starts preparation for joint HTA from 2024
- G-BA assessment of orphan drug gene therapies, Zolgensma and Libmeldy
- Why did the G-BA assess Trimbow now?
- IQWiG methods version 6.0, English
- The biggest SHI fund, the AOK, proposes an end to free pricing in Germany
- New government coalition plans AMNOG, pricing and other reforms
- Prof. Dr. Karl Lauterbach is the new German health minister
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