Polemical Controversy

Starting Position and First Results of the Solidarity Act

The main measures to be taken have already been fixed in the coalition agreement of October 1998. Though in agreement with the CDU/CSU and the FDP in its goal to reduce sickness fund premiums, the strategy of the red/green government differs from that of its predecessor. The main strategy of the Kohl government was to shift costs to the insured and the patients (Bandelow/Schubert 1998). The SPD and the Greens have to be careful to meet the demands of their left wings. For this reason they retracted the measures passed by the Kohl government prior to starting with their own reforms. The Solidarity Act of January 1999, passed by the new government, included the following measures (http://www.bmgesundheit.de/gkv/down/leit.htm; see also Handelsblatt No. 215, 6/7 November 1998):
 

•      withdrawal of the latest cut in benefits,
•      reduction of the patients' co-payments,
•      elimination of provisions which envisage higher or new co-payments for patients,
•      removal of elements introduced from the private insurance sector,
•      abolition of the hospital emergency levy of twenty DM per insured person,
•      limitations on various expenditure items of the sickness funds for 1999

The main expense of the Solidarity Act was to be covered by a new 10 percent premium. Employers had to pay this additional premium in the case of low income jobs (less than 630 DM per month). Nonetheless, the health insurance budget showed a deficit of 2.2 billion DM for the first three months of 1999, while in 1998 there had been a surplus of 1.1 billion DM (Handelsblatt, No. 97, 21/22 May 1999). At the moment it remains unclear whether planned amendments of the "630-DM-Act" will result in amendments to the Solidarity Act. The weakening of traditionalists' power-signaled by the resignation of left-wing SPD party leader and Finance Minister Oskar Lafontaine in March 1999-may be a hint that the Solidarity Act will not last long.
 
In any case, the Solidarity Act was designed to create the prerequisites for the implementation of a basic structural reform to come into force in January 2000.
 

Compromise at the Federal Level Aims at Increase of Efficiency

1. The act will limit the growth of total expenditures of all sickness funds to the level of growth of total contribution revenues. Reduction of expenditures is a central aim of the SPD. This reduction should come about through increased efficiency. However, opponents predict a reduction of benefits.
2. The bill will draw up a list of medicines to be covered by the funds, including an appendix of homeopathic drugs. This list will be selected by a joint committee of physicians and natural-healers. The intention is to reduce medicinal expenditures and, at the same time, guarantee the quality of the drugs remaining on the list.
3. The bill also calls for a reduction in the number of hospitals and physicians covered by the sickness funds. It is argued that superfluous doctors and hospitals enlarge their offers beyond medical necessity. Opponents claim that this measure will make it very difficult for young physicians to find employment, resulting in the loss of their expertise.
4. The act will also allow the sickness funds to negotiate contracts with different groups of physicians. The current monopoly of the Länder Associations of Sickness Fund Physicians will be replaced by domination of the funds. This measure is intended to extend the competition between the different parts of the system. Opponents fear that it will restrict the patients' free choice of a doctor.
5. Responsibility for hospital finances will be transferred gradually to the funds. At the moment, the Länder are responsible for investment in hospitals. They will be released from this burden completely by 2008. In return, the Länder may have to cover maternity and death benefits now paid by the funds.
6. The reform will make it possible for the funds to introduce incentives for patients to consult general practitioners each time they seek the help of a specialist. This should also reduce "doctor hopping" (cf. U. Schneider 1999).
7. The bill will allow hospitals to increase their participation in outpatient care in cases of severe diseases like HIV or cancer. On the other hand, the act will also increase the number of operations that can be handled on an outpatient basis by sickness fund physicians. These measures should reduce the separation of outpatient and inpatient care.

Conflicts within the Red/Green Coalition

Despite the fact that the Health Minister and her two State Secretaries are members of the Green party, the ministerial draft was not dominated by the Greens, who had little prior experience with health policy. Instead, experts in the ministerial bureaucracy, many of whom are close to the SPD, gained the most influence.

Influence on the bill also came from outside the ministry. In order to mediate the conflict that health costs (as incidental labor costs) contribute to joblessness and that the same costs stabilize existing employment within the health services sector, health policy was integrated into the "Alliance for Jobs" (Bündnis für Arbeit), launched in November 1998. The healthcare working group within this Alliance differs from the preexisting pattern of sectoral corporatism in German healthcare policy. Whereas prior to the formation of the Alliance, physicians, sickness funds and many other interest groups have been involved in policymaking, the government invited only representatives of employers and labor unions to the recent meetings of the Alliance for Jobs.

Nonetheless, there were further working groups consisting of SPD and Green experts outside the Alliance that contributed to the preparation of the health care reform bill. The Greens created decentralized Länder Working Groups on Health, open to non-members. These groups have gradually become dominated by physicians and especially natural healers. All of these groups have influenced the draft legislation.

The Social Democrats are not entirely unified about the future of the health insurance (cf. Handelsblatt, No. 92, 14/15 May 1999), even though they were the first German party to develop specialized institutions to achieve common positions on health policy (cf. Döhler/Manow 1997). They favor strengthening the relative position of the sickness funds with whose representatives they maintain close contacts. In contrast to the Greens, the SPD would like to limit the benefits of the funds to "classical medicine."

While joint working groups of both parties' experts overcame most disputes, some conflict remained when the draft left the ministry. The Greens wanted to create a separate list of homeopathic drugs to be covered by the funds while the Social Democrats refused. Another area of conflict was the question how the position of general practitioners could be strengthened. This issue prompted Rudolf Dreßler, a left-wing SPD Bundestag member, to openly criticize the minister's draft, showing his personal dislike of the minister (cf. Die Zeit, No. 21, 20 May 1999).

Despite these problems, all leading healthcare policy actors of the SPD and the Greens at the federal level agreed to the compromise within a very short period. The final decision of the parliamentary parties for the first reading in the Bundestag is due in August 1999. Whether the bill will pass the legislative process without any further changes remains to be seen.
 

Remaining Hurdles

Even after its passage the act has to overcome a final hurdle. The association-based coordinating body of the German healthcare system gives professional associations of sickness funds physicians the means to block the act's implementation. However, given the growing differences among several groups of physicians, it will be very difficult for them to develop a common position.
 

Concluding Comments

Nonetheless, the coalition now has the chance to realize some of its main goals. The policymakers managed to find a compromise quickly, thereby sidestepping the common practice of blockade by interest groups, which could be counted on to kill a fundamental reform before it could be submitted to parliament. While the influence of the pro-physician FDP has been very strong during the last decades, it may now be the turn of the red/green coalition to carry the day against the interest groups. For this to happen, the most important condition will be maintained harmony within the coalition.

Regardless of whether the bill passes without fundamental changes, it will not solve the problems of the health insurance in the long run. It will help to reduce the incidental labor costs by cutting the incomes of some groups of the health service sector and by limiting some benefits. However, the government's call to increase efficiency gives no answer to the normative question of how much money the Germans want to pay for their healthcare system. Thus, many other healthcare acts will have to follow until a democratic decision about the status of the German public health insurance as a whole will be reached.

REFERENCES

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