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According to prevailing opinions, the demographic trends of Germany were the biggest cost drivers in the health system. With the number of elderly people increasing, as well as those living for longer, there are enormous costs for the treatment of diseases and illnesses associated with old age which will continue to escalate. This is frequently discussed in the media at the moment. A recent study from the Barmer Ersatzkasse, however, concluded that only 18% of the additional expenditure of funds is due to the demographic trends of the country. Thus, there must be other reasons for these cost increases, leaving 82% of the cost increases down to other factors not related to an aging population.

Uwe Repschläger is the author of the study and head of corporate governance at BEK. He identifies the „real reasons“ for the cost increases as the following:

  • Price for drugs and medicines,
  • Doctors‘ fees und
  • medical advances such as innovative devices.

More or less, all of these identified areas can regulated by interventions. The demographic trends, on the other hand, must be adapted to in the short or medium term. An ideal outcome for the treasury is thus an increased output whilst restricting spending. The problem here is that each of these areas are protected by strong lobbying groups. This week, the treasury negotiated with medical representatives over the remuneration of doctors. The results of the study seem supportive in limiting the cost increases of doctors.

The medical community demanded EUR 3.5 million from the treasury to cover the remuneration increases for doctors. The treasury in turn offered EUR 2.2 million in return. As a result, mediation assistance provided by Vorsitzenden des erweiterten Bewertungsausschusses chairman Jürgen Wasem resulted in a EUR 300 million increase being agreed. Whilst the treasury is satisfied by this ruling, the medical profession sees this as a catastrophic result, and plans massive protests in the coming weeks.

The fact that the health care system costs „too much“ money is not the sole reason for this anger. Looking at adjacent industries, such as the automobile industry, the market growth and future investment in all sides is always welcomed. Lastly, there are too many jobs in such a huge industry. The awareness that public health spending is managed and distributed among market participants makes us believe that savings and expense reduction methods are effective means of deciding this distribution. In addition to investigating the causes of cost drivers on health care, it would also be interesting to analyse exactly who gets the extra costs. It could show that there is positive growth momentum within the employment market, which would render the debate about cost increases exempt from the notion that individual companies or other stakeholders benefit more.