The inefficiency of the health care system in Germany

A wave of viral infections has pushed Germany’s children’s hospitals to their limit. This winter, doctors' practices and children's hospitals were bursting at the seams. Some clinics didn’t even have beds available at peak times. There is also a shortage of antibiotics, painkillers and medication to reduce fevers – production was outsourced to other countries to save money, at the cost of reliability. The chairman of Germany’s hospital association said: “Right now, we are seeing all areas of health care being pushed to their limits.

How is this possible in a country that spends more on health care than almost any other country in the world: More than a billion euros a day? Even though children’s hospitals are currently in the spotlight, Germany’s whole health system is affected. One major problem: There are colossal staff shortages. Hospitals like Berlin’s Charité had to cancel scheduled operations. Only emergency procedures were carried out. During the pandemic, thousands of nurses quit their jobs. For the remaining staff, the situation is increasingly difficult, especially during the winter virus wave.

But the current virus wave is just the straw that broke the camel’s back. The underlying problem is more fundamental. And – spoiler: It’s about money. Up until around 20 years ago, hospitals were paid per patient, per day. As a consequence, they could make more money by allowing patients to stay longer. To make the system more efficient, the so called DRG system, short for diagnosis related groups, was introduced. From that point on, hospitals were paid per diagnosis – no matter how complicated the treatment was. An incentive to treat patients quickly, efficiently and on masse! Certain procedures, like knee surgery, became more financially attractive and were performed more often – even if they were not always necessary.

Losers under the new system: Time-consuming specialist areas – like pediatrics and care. Since the introduction of DRGs, Germany’s health system has become more focused on economics than on health. More and more hospitals, by now nearly 40 percent, are run by private companies. And that their goal is to make money. Many doctors and nurses are frustrated by the working conditions. Overtime is common. Often there is not time to take a short break or even go to the bathroom. Every fourth doctor in Germany is considering quitting their job.

By 2035, more than a third of all health care positions could be vacant, a study found. Many are particularly frustrated about the high level of bureaucracy and a lack of digitalization. Nursing staff suffer from a lack of recognition, responsibility and low pay. There aren't enough staff to plug the gap. And the gap is getting wider. First, pediatrics takes more time. And that means: Money. The same level of specialists is needed in pediatric and adult care alike, but children’s doctors treat less patients and aren’t paid for being on call.

Waves of infection that keep pediatric staff busy are more common in winter – meaning that during summertime, they have less to do – but still need to be paid. To address the financial difficulties in the whole system, Germany’s health minister, Karl Lauterbach, has announced what he calls “a revolution in hospital care”. He says he wants to put “medicine first rather than economics”. Payments per diagnosis are to be reduced. Instead, hospitals are to receive money for overhead costs, like staff and equipment. To operate more efficiently, hospitals will be arranged in three tiers. From hospitals providing basic care to highly specialized hospitals. Costly overnights are to be cut down by performing more procedures on an out-patient basis. With these measures, the minister hopes to use money and manpower more efficiently – and thereby relieve the whole system. And for the particularly affected pediatric care sector, a 300-million-euro aid package is planned. Critics fear, that the reforms won’t solve the staff shortages and that the issues relating to payments per diagnosis will still persist. So maybe this is not quite the envisaged major overhaul of the system, but a desperately needed new start.