Germany’s health policy agenda
The German health care system is facing two major challenges. Sustainable financing still tops the German health policy agenda due to steadily increasing health care expenditure in Germany’s social market economy. Less in the daily political spotlight – but no less important – is how the country’s quality of care can be assured and improved. This topic causes political discussions whenever new reports are published (e.g. SVR-GK, 2003; WHO, 2000). Research is basically limited to analysis of the status quo in health care, especially its shortcomings in quality (cf. Allen and Riemer-Hommel, Reference Allen and Riemer-Hommel2006). Little attention is paid to the issue of how potential improvements – highlighted by various studies – can be implemented by an adequate quality assurance strategy. This article tries to fill this gap in two ways. Firstly, by developing a theoretical framework for quality assurance to evaluate the strategy applied in Germany. This framework (outlined in Section 2) not only describes legitimate quality assurance goals but also the regulatory instruments and organizations (or actors) needed to reach these goals within Germany’s social market economy. Taking this framework as a reference point, Section 3 analyses the current situation in Germany, paying special attention to the improvements anticipated by the Statutory Health Insurance (SHI) Modernization Act of 2004, which explicitly addressed quality issues. The latest developments initiated by the Health Care Reform Act (2007) are also outlined and evaluated. The conclusion (Section 4) summarizes the results.
Quality assurance: some theoretical considerations
The general problem
In terms of quality assurance, the basic goal for health policy is to provide good-quality care, thus protecting patients (as principals) from malpractice by medical providers (as agents). Consumer protection is necessary due to the asymmetric distribution of quality information within patient-provider relationships, which could lead to market failure as a result of a principal-agent problem (Arrow, Reference Arrow1963). To solve this problem, medical providers must receive stronger incentives to provide patients with good-quality care. These incentives occur in two different settings.
Firstly, they arise under competitive pressure in markets with asymmetric information. Incentives can be provided by patients themselves or by their trusted agents, like third-party payers (Lesser and Ginsburg, Reference Lesser and Ginsburg2006). Akerlof (1970) revealed that this pressure often brings private problem solving (e.g. guarantees). In such a consumer-driven system, providers have strong incentives to signal their quality (and efficiency) to patients or to patients’ trusted agents, such as medical insurance companies. Obviously, bad-quality providers will be less frequently chosen. If there are private solutions, there is no need for direct regulation, which is the second type of setting. Here we have to distinguish between merely setting up a regulatory framework and its application. The latter refers both to designing regulatory mechanisms and sanctions for rule breaking. In applying regulations, four questions have to be answered with regard to assigning competencies. Who is responsible for (a) setting up the regulatory framework, (b) designing regulatory details, (c) providing quality information, and (d) applying sanctions on providers that do not fulfil regulatory requirements? In general, the actors involved should be close to and well informed about the problem (i.e. low measurement costs) and also have strong incentives to find solutions.
Two different regulatory approaches can be applied in this regard. The first option is public regulation, established by the government’s health policy. The application of public regulations can be assigned to government bodies, self-governing bodies in the sector or corporatist bodies. The second option is self-regulation, set up and applied by medical providers themselves and their self-governing bodies. Self-regulation has a long tradition in Germany (Altenstetter and Busse, Reference Altenstetter and Busse2005) and occurs as a private solution – often voluntarily as a means of preventing public regulation. In both settings, the key is reliable information about quality (and efficiency). Such information must be available for patients (or their trusted agents) to compare providers and motivate careful choices (Ginsburg, Reference Ginsburg2005: 1520f.). Quality of care can be measured under three dimensions: structure, process, and outcome (Donabedian, Reference Donabedian1980), with different indicators and different measurement costs for each.Footnote 1
The lowest measurement costs arise with structural criteria, such as measuring health care providers’ qualifications. Another advantage is their availability before the diagnosis and treatment process begins. The quality of the process itself can also be measured. In line with Akerlof’s argument, for example, health care providers can signal their quality provision by offering guarantees to adopt state-of-the-art, evidence-based guidelines for treatment. While information about such process criteria is available before diagnosis and treatment, measurement costs are typically higher than for structural criteria. High measurement costs also occur when measuring outcome quality. We have another problem here: ex-post knowledge of quality parameters – e.g. typically, complication rates – are only available with a noticeable time lag after diagnosis and treatment, and they have to be risk-adjusted (e.g. Matthes and Wiest, Reference Matthes, Wiest, Klauber, Robra and Schellschmidt2005: 65).
Based on these health care quality standard dimensions and the two basic approaches (regulation or competition), the subsections below outline a proposed framework for quality assurance. We start with a discussion of available instruments and potential actors that could be responsible for their application, before finally outlining a feasible assignment of actors and duties within a health care system embedded in a social market economy.
Quality assurance: available instruments and potential actors
Quality assurance before market entry
Instruments to assure quality of care can be applied at two stages: before and after market entry of medical providers.Footnote 2 In applying instruments such as measuring medical providers’ structural quality, it especially makes sense to set up barriers to entering the health care market. Thus, market access is limited to well-qualified providers, e.g. by approving only those providers with certain (and proven) medical qualifications. Likewise, the regulator could set minimum standards for the number of medical procedures performed by a provider, thus ensuring a minimum level of quality provision. Barriers to entry can be set up by regulation or in a competitive situation. If medical providers have restricted market access in a competitive situation, this is usually done by the third-party payers who use selective contracting, thus restricting reimbursement for services provided to those providers with given qualifications. Thus, they put up barriers to private actors entering the market. However, the basic pre-requisite for such a solution is that third-party payers must have good incentives to care about the quality provided, i.e. to act as trusted agents for patients. Again, this is typical if they themselves act in a competitive situation: third-party payers can then signal the quality of medical providers they have under contract to their own customers, thereby strengthening their own competitive position.
Quality assurance in the market
Once medical providers are in the market, government policy needs to determine if the system will rely more on regulation, or on private solutions arising in competitive surroundings. If regulation is the chosen approach, the better-informed actors in the market (e.g. corporatist bodies) should be allowed to design the regulatory details. As the ultimate goal of quality assurance is consumer protection, patients and their organizations should play an active part in regulation design. Health policy can even stimulate self-regulation instead of public regulation, thus leaving regulation to self-governing bodies which are the relevant actors in the health care system (Allen and Riemer-Hommel, Reference Allen and Riemer-Hommel2006: 206).
Based on minimum-level quality, ensured by entry barriers, quality of care can be further improved by structural, process, and outcome measures. The standard of medical providers’ knowledge could and should be reviewed regularly to ensure long-term structural quality. Thus, providers will keep up-to-date with current knowledge in their specialist fields. In addition, process obligations could be introduced to ensure that state-of-the-art medicine is provided. Finally, outcome measures can be published to inform patients about the quality of services provided. In this respect, the quality of data collection and dissemination is an important problem to be solved. The data-collecting organization must have a good reputation for unbiased work (Lesser and Ginsburg, Reference Lesser and Ginsburg2006: 562). It must be an independent organization, not influenced by any interest groups in the health care system. Another important question is which actor should be responsible for applying sanctions to the medical providers who do not meet the specified requirements. To be credible, this actor must be able to remove such medical providers from the market.
If private solutions are to be implemented in competitive circumstances, an adequately designed framework should be provided to establish workable, quality-based competition among health care providers (Sauerland, Reference Sauerland2001a). Such competition can be either price-based or service-based. If performance-based payments are chosen, reimbursement of health care providers is linked to the quality of service they provide (Petersen et al., Reference Petersen2006; Rosenthal and Frank, Reference Rosenthal and Frank2006). This is a type of price-based competition, in which higher-quality providers receive higher fees than those who provide lower-quality services. Competition of this kind can be particularly effective if third-party payers are able to use the quality of the health care providers with whom they have contracts, or their high-quality services, to attract more members (complementary quality-based competition among third-party payers). This means that third-party payers can direct patients who are paying for (or who want to pay for) a particular level of quality directly to those providers who can offer the quality desired. In contrast to price-based competition, no selective contracting is required in order to create service-based competition. If health care providers – reimbursed by regulated prices – are competing for patients, they can gain higher profits if they manage to attract more patients through higher-quality services, i.e. increasing their profits depends on increasing their market share. This service-based competition among health care providers is workable even if no complementary quality-based competition exists among third-party payers.
Although the problem of sanctioning poorly performing providers can be solved by market mechanisms, the pre-requisite for both types of quality-based competition – as for a workable regulation approach – is the availability of reliable information about the quality provided. In the case of service-based competition for patients, the reporting of provider performance must be done in a user-friendly manner to ensure that patients can make informed decisions when choosing a health care provider (Lesser and Ginsburg, Reference Lesser and Ginsburg2006: 562). Empirical studies in the United States show that service-based competition in health care markets with regulated prices leads to better quality of services (Gaynor, Reference Gaynor2006: 15–20). As prices are highly regulated within German health care, more competition also could improve quality of care in the German system.
A feasible framework for quality assurance in a social market economy
One of the basic principles of the social market economy in Germany is self-responsibility on the part of citizens: each individual should solve his or her own problems – as far as he or she is able to do so. Only in cases where individuals find themselves out of their depth should larger entities such as the state come to their assistance in accordance with the principle of subsidiarity. This argument generally calls for a consumer-driven health system. However, a key responsibility within health policy is to define the goals to be achieved within the health care system. Legitimate goals, fulfilling the consensus criterion, are (1) to ensure that all people have access to medical services and (2) to ensure the provision of services according to patients’ preferences while also ensuring the quality and efficiency of these services.
In the tradition of German Ordnungspolitik (Ordo-liberalism), the theoretical basis for a social market economy, health policy should provide the legal framework (rules of the game) for the relevant actors in the health care system (Sauerland, Reference Sauerland2004). This means, for example, establishing an adequately designed competition law (Sage, Hyman, and Greenberg, 2003) and solving the problem of inadequate information that currently affects quality of care arrangements. To prevent market failure, incentives should be provided for relevant actors to attend to the quality of care provided. This can be done either by a quality-assurance strategy which either relies on public regulation or on more private competition (see Figure 1). A sensible overall strategy consistent with the logic of a social market economy could use a combination of both instruments: appropriate regulations are useful for consumer protection, particularly in the area of structural quality before the market entry of medical providers, while the quality of processes and outcomes can be maintained or improved through quality-based competition among third-party payers and health care providers after their market entry. If quality-based competition already exists, the parties involved have clear incentives to provide information and thus to position themselves as quality providers (Sauerland, Reference Sauerland, Leschke and Pies2005: 258ff.).
Template matrix for regulation and competition as instruments of quality assurance
According to the subsidiarity principle, health policy should delegate the design of regulatory details within the given framework to the parties involved, i.e. self-governing bodies (e.g. health care providers or third-party payers) or corporatist bodies. These players typically have better information to resolve specific measurement and monitoring issues. However, credible sanctions should be legally established so that they can be applied in cases when self-governing or corporatist bodies do not fulfil the tasks assigned to them or when medical providers do not meet the quality standards set.
Patients themselves can, in a competitive framework, assume an important function if they penalize health care providers of recognizably poor quality by switching to better-quality providers. Different studies (e.g. Hanson, Yip, and Hsiao, Reference Hanson, Yip and Hsiao2004) show that patients take quality into account when selecting a health care provider. In order to be able to fulfil their role as rational, well-informed consumers and thus be responsible for their own consumer protection, patients need sufficient and well-presented information about the quality of services provided by individual practitioners. Patients have a vested interest (i.e. their own health) in using such information if it is made available to them. So far, various surveys in Germany have shown that patients are very interested in more (or better-presented) information about the quality of services offered by different health care providers (Nolting and Wasem, Reference Nolting and Wasem2002; Bertelsmann Foundation, 2004; Dierks and Schaeffer, Reference Dierks, Schaeffer, Klauber, Robra and Schellschmidt2005). Health policy could establish the obligation to make quality data available and accessible. In such circumstances, independent private information brokers with high reputations (like the well-established German Consumers’ Association, Stiftung Warentest) could play a role in analysing and making available quality data. Figure 2 gives a theoretical overview of the different actors in the system and the duties that would need to be assigned.
Template matrix of actors and duties to be assigned in quality assurance
Quality assurance: the status quo in Germany
The structure of the German health care system
The German health care system is characterized by four groups of relevant actors: firstly, the federal government which establishes the health care system’s legal framework and pays tax-financed subsidies to the Statutory Health Insurance (SHI) funds; secondly, patients who need medical services and pay their insurance premiums to SHI and to private insurance companies; thirdly, physicians and hospitals which provide medical services; and, fourthly, third-party payers (basically SHI funds) which are responsible for financing these medical services. Figure 3 gives an overview of the health system’s structure.Footnote 3
Relevant actors, flows of funds and services in the German health care system
SHI is the dominant third-party payer in the German health care system. The vast majority of the population (around 90%) is insured under the SHI scheme, and the SHI share accounted for 57% of the total expenditure on health in Germany in 2005 (FSO, 2007). Due to this prominent position, the SHI enjoys a great deal of attention in health policy, including within the sphere of quality assurance. All government activities affecting the quality of medical care are geared towards the services and health care providers accredited under the SHI scheme (Schirmer, Reference Schirmer2002).
An analysis of the quality assurance status quo in 2001 came to the conclusion that the German strategy was ‘in need of improvement’ (Sauerland, Reference Sauerland2001a), because (i) it was based primarily on regulations on inpatient and outpatient care, medications and medical aids (Sauerland, Reference Sauerland2001b) and (ii) there were no credible sanctions available for bad-quality medical providers. Similarly, Allen and Riemer-Hommel (2006: 206) found that before 2004 ‘the quality initiatives that actually found their way into the Social Law add to the bureaucracy in the German system without delivering visible results to patients’.
The strong regulator influence has a long tradition in Germany (Altenstetter and Busse, Reference Altenstetter and Busse2005). While health policy (i.e. the Federal Ministry of Health) establishes the legal regulatory framework, regulatory details are typically set by corporatist bodies in the self-governing German health care system. Thus, these corporatist bodies play an important role. Figure 4 shows the relevant actors in the field of quality assurance.
Relevant actors in quality assurance
Since 2001, several pieces of reform legislation have been passed with the explicit aim of introducing more competitive elements into the German health care system. Most of the changes in quality assurance are due to the SHI Modernization Act, which came into force in 2004 (Allen and Riemer-Hommel, Reference Allen and Riemer-Hommel2006: 208 f.). In order to assess the current status quo in Germany, we précis the major changes made in the German Social Code Book Five (SCB V) which relate to new regulations (Section 3.2 below), new actors in quality assurance (Section 3.3), and Disease Management Programs (DMPs) as a new instrument to be applied by SHI funds (Section 3.4). In addition, the latest health care changes legislated in 2007 are outlined in Section 3.5.
Regulatory framework for quality assurance
The legal basis for quality assurance in the SHI-financed system is laid down in the fourth section of the German Social Code Book Five (SCB V). Detailed regulations on quality assurance measures are set out in §§ 135 to 139c, SCB V. These regulations refer to the inpatient and to the outpatient providers reimbursed within the SHI system. Taking current statistics in 2005, the inpatient regulations applied to 98.2% of the beds in German hospitals and to 97.7% of all physicians in the outpatient sector (FSO, 2006). The SHI Modernization Act of 2004 introduced a new general obligation to implement an internal quality management system for both inpatient and outpatient providers.Footnote 4
SCB V (in (§§ 135 to 136b) just establishes general obligations for the outpatient sector. Definition of detailed measures is legally delegated to the regional Associations of Statutory Health Insurance Physicians and the Federal Joint Committee. However, for the first time, the law explicitly refers to measures of structural quality as a barrier to market entry: providers must have certain qualifications and/or equipment for permission to provide certain services – and have them reimbursed by SHI funds.
Compared to the outpatient sector requirements, the inpatient sector regulations are relatively detailed. Here § 137 SCB V rules that the Federal Joint Committee – in cooperation with the Association of Private Health Insurance, the German Medical Association and the Professional Associations of Health Care Professionals – should define the measures for quality assurance. The law also specifies the areas to be covered by these measures, formulating that quality of structure requirements call for a minimum number of scheduled procedures to be specified per doctor (or per hospital) before the procedure can be performed.
To collect more SHI-approved quality data, structured quality reports must be compiled by German hospitals, covering the status of their quality assurance programs, plus the type and scope of services performed. These reports have to be published on the Internet, thus making quality information publicly available. The FJC has hired the Federal Office for Quality Assurance (BQS), a private company founded by the German Medical Association, private health insurance companies, SHI funds, and the German Hospital Association, to prepare the quality reports on hospitals (Allen and Riemer-Hommel, Reference Allen and Riemer-Hommel2006: 209). Comparative quality reports can also be compiled by regional Associations of Statutory Health Insurance Physicians and by health insurance funds (or their associations) to provide additional information on SHI-accredited physicians and their patients.
Compared to the previous regulatory rules, the changes introduced by the SHI Modernization Act (2004) constitute clear improvements in outpatient sector regulation. SHI physicians now have the explicit obligation to perform quality management. Looking at the changes in the inpatient sector, the legal obligation to collect quality-related data and to make them publicly available shows progress in the quality-assurance process. This establishes a basis for better-informed patients, thus enabling more responsible consumer choice within the German health system.Footnote 5 However, the BQS quality reports could be improved in order to better inform information-seeking patients (Selbmann, Reference Selbmann2005). In addition, BQS independence in preparing hospital quality reports can be criticized because the company is a corporatist body owned by the above-mentioned interest groups. Finally, a positive development initiated by the Health Reform Act (2004) is the setting up of medical providers’ structural quality criteria (Schirmer, Reference Schirmer2002) as pre-requisites for performing certain procedures and getting them reimbursed.
New actors in quality assurance
The SHI Modernization Act (2004) also introduced two important new actors on to the field of quality assurance: the Federal Joint Committee (FJC) – mentioned above and defined by § 91 SCB V – and the Institute for Quality and Efficiency in Health Care (IQWiG). Its legal foundations are set out in §§139a–139c of SCB V.
The Federal Joint Committee
The Federal Joint Committee (FJC) is a corporatist body and has the duty to ensure quality in SHI-accredited medical and dental facilities, the inpatient sector, and any cross-sectoral areas. The FJC officially replaced four committees that were previously responsible for quality assurance. The resulting simplification of the competence delineation was, however, only an ostensible one, as the Federal Joint Committee makes decisions within committees that essentially correspond to the old committee structure. In addition to the Chair, the Federal Joint Committee comprises two other independent members. Providers nominate nine members: the National Association of SHI Physicians (four members), the German Federal Association of Medical Fund Dentists (one) and the German Hospital Association (four). The SHI funds are represented by another nine members. In addition, up to nine patients’ association representatives can participate in the committee meetings, but they do not have voting rights in the decision-making process (§ 140f SCB V).
Although it has no significantly improved duties, the Federal Joint Committee (FJC) may help to reduce decision-making costs, thereby improving efficiency in setting up quality assurance rules; and although patients’ rights have been improved by means of their participation in the FJC, a critical point is still the weak position of patients in this committee.
The Institute for Quality and Efficiency in Health Care
For scientific analysis, the FJC can assign duties to another new actor in the quality assurance regime: the independent Institute for Quality and Efficiency in Health Care (IQWiG), financed by contributions from the SHI system (§ 139c SCB V). IQWiG has the legal duty to:
record the current level of knowledge in the diagnosis of, and therapy for, selected illnesses;
prepare scientific documents, reports, and statements on the quality of services provided within the framework of the SHI;
review evidence-based guidelines;
make recommendations on Disease Management Programmes (DMPs);
evaluate the benefits of pharmaceuticals; and
provide information about the quality of health care services available to the public.
IQWiG is legally obliged to consult external experts in carrying out these duties. In addition, the work of the institute should be as transparent and traceable as possible through regular reporting. Furthermore, the influence of interest groups on the work of IQWiG should be avoided through the disclosure of potential conflicts of interest among the participants, such as, for example, their relationships with the pharmaceutical industry.
Some of these obligations came into law following the experience of the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom, which is often cited as the model for IQWiG. NICE’s basic remit is to evaluate medical procedures and medical technologies/pharmaceuticals. Positive evaluation is a prerequisite for the funding of services through the National Health Service (NHS). So far, NICE has assessed only a small proportion of NHS interventions. Whereas the work of NICE generally has been assessed positively (e.g. Davies and Littlejohns, Reference Davies and Littlejohns2002; Hill et al., Reference Hill2003), there has also been some criticism due to a suspected lack of independence (Davies and Littlejohns, Reference Davies and Littlejohns2002), and this served as a lesson in the establishment of IQWiG. Other studies emphasize that NICE decisions very much depend upon the cost effectiveness of the treatment method under evaluation (Towse and Pritchard, Reference Towse and Pritchard2002) and are thus in line with a utilitarian normative theory of health economics (Rothgang et al., Reference Rothgang2004: 24). The institute’s close relationship with the pharmaceutical industry has come in for particular criticism (Hill et al., Reference Hill2003). One indicator is that service evaluations place great emphasis on medicines, with an above-average quota of positive drug recommendations. By December 2003, more than 64% of evaluations were evaluations of pharmaceuticals, over 95% of which were approved (Rothgang et al., Reference Rothgang2004: 10). A further criticism is that medications often are not available in a timely fashion, due to the institute’s long decision-making process. Not surprisingly, the pharmaceutical industry has highlighted this problem (Kmietowicz, Reference Kmietowicz2000: 980). In principle, the process is necessary, as the guidelines must fulfil the highest scientific standards. This, however, means that NHS patients often have to wait more than a year before being able to benefit from innovative drugs (Fuhr, Reference Fuhr2003). It took, for example, two years for NICE to evaluate the cost effectiveness of Beta Interferon (Waiß, Reference Waiß2003: 50). The majority of directors of regional health authorities in the UK are also of the opinion that NICE is too slow in making recommendations (Davies and Littlejohns, Reference Davies and Littlejohns2002).
If it manages to learn from the NICE experience and to avoid the above-mentioned problems, the new Institute for Quality and Efficiency in Health Care (IQWiG) could play an important role in the German quality assurance strategy. Its evaluation of evidence-based guidelines could improve both the quality of actual guidelines and the transparency of such guidelines. Moreover, its provision of information about the quality of health care services can help patients make better-informed decisions when choosing a medical provider (Schaeffer et al., Reference Schaeffer2004). Both points (evaluation of guidelines and provision of information) are important pre-requisites for improving the quality assurance strategy in Germany (Sauerland, Reference Sauerland2001a: 142). However, there are some critical points to consider: the legislation gives IQWiG some duties that were previously fulfilled by the Agency for Quality in Medicine, which includes the involvement of private health insurance companies (AQM, 2004: 3). This shows that health policy in Germany favours publicly implemented organizations over private organizations. It also highlights the impression that more emphasis is placed on regulation and less on voluntary, private solutions emerging in a competitive situation. Recent criticism of the institute’s performance has mentioned IQWiG’s funding as it is assigned by the Federal Joint Committee (and therefore by SHI funds represented in the FJC). IQWiG’s financial independence is seen as critical (Wehling, Reference Wehling2007), so it remains to be seen whether or not it will be able to fulfil its duties properly.
DMPs as a new instrument in quality assurance
Since 2002, SHI funds have had the opportunity – and the legal obligation – to provide Disease Management Programs (DMPs) for chronically ill people (FMHS, 2002). One basic aim of DMPs is to improve patient compliance and thus to reduce treatment expenditures while improving the quality of care provided (FMHS, 2002). To attain these aims DMPs should be offered for diseases (a) that a large number people suffer from; (b) where patients’ own motivation or compliance is extremely significant for the success of the treatment; and (c) that incur high expenditures for SHI funds. In 2007, SHI funds offered programs for patients with diabetes mellitus type 2, breast cancer, and coronary heart disease. DMPs for patients with diabetes mellitus type 1, asthma, and chronic obstructive pulmonary disease (COPD) are in the pipeline (FIO, 2005b).
While the programs are financed by the SHI funds, services are provided by regular SHI providers. Participation in these programs by chronically ill patients is voluntary. Before a fund can offer a program it must be approved by the Federal Insurance Office (FIO), initial approval is valid only for a limited period of time, and approval can be renewed if the program is evaluated by external appraisers (Gerlach et al., Reference Gerlach2003). Meanwhile, the FIO has set quality standards for the evaluation of structured treatment programs for Diabetes Mellitus type 2 and breast cancer to ensure the quality of programmes offered (FIO, 2005a).
In order to promote the introduction of DMPs by SHI funds, funds offering these programs do not have to carry the financial burden of providing them. The rationale underlying this policy is that if there were an influx of chronically ill patients to a particular fund, their income-dependent contributions would not cover their per-capita treatment costs (even if these are reduced by the DMP) and the fund’s expenditures would increase faster than its revenues. As a consequence, contribution rates would increase, and the fund’s position in terms of SHI fund competition would worsen. Therefore, DMP funding is provided through the SHI risk adjustment scheme defined in § 166 SCB V. Consequently, SHI funds offering DMPs actually have improved their competitive situation (Seitz, Reference Seitz2004: 11). Some health insurance funds have even offered ‘per capita premiums’ to attract chronically ill patients because payments from the risk adjustment scheme are so high that insurance funds have anticipated financial surpluses (n.A., 2003).
SHI funds embraced this new instrument and offered numerous DMPs. By October 2005, about 5,500 DMPs had been approved by the German Federal Insurance Office (FIO, 2005c). Of these, more than 1,500 were breast cancer programs, more than 3,000 were for patients with Diabetes Mellitus Type 2 and about 800 for coronary heart disease. The programs also seem to have been well received by patients themselves (AOK, 2003). In August 2006, about 2.85 million people were enrolled in DMPs: 2.04 million in Diabetes Mellitus Type 2 programs, 0.72 millions in coronary heart disease, and 64,000 in breast cancer programs (Schmacke, Reference Schmacke2007).
The introduction of DMPs in Germany is generally an improvement in quality assurance. Their significant advantage within the SHI framework is that chronically ill patients are no longer ‘bad risks’ for the funds – on the contrary, the subsidies provided may now lead to a positive selection of chronically ill patients as ‘good risks’ (Busse, Reference Busse2004). Furthermore, this instrument also gives SHI funds the opportunity to use the quality of care provided as a competition parameter (Seitz, Reference Seitz2004). In principle, this enables quality-of-care improvements to – potentially – reduce SHI fund expenditure. On the other hand, SHI expenditure may increase if better-quality treatment is provided within the DMP framework. If, however, we offset this increased expenditure against the costs avoided through the provision of higher-quality service, the programs are to be welcomed from a macro-economic perspective (Häussler and Berger, Reference Häussler and Berger2004: 11 and 53ff.). However, it will take several more years before the actual impact of DMPs on the quality of care provided can be analyzed (n.A., 2005).
The latest development: Health Care Reform Act 2007
With regard to quality assurance, the new Health Reform Act, which came into force on 1 April 2007, brought several more changes. These changes mainly refer to the actors within the quality assurance framework and focus on the collection and publication of quality data. In this regard, the Federal Joint Committee (FJC) now has the additional duty to develop guidelines for quality measurement (§ 136 SCB V). Moreover, the Institute for Quality and Efficiency in Health Care (IQWiG) received the new duty of not only having to evaluate the benefits but also the costs of treatment methods (§ 139a SCB V). It is not yet clear how IQWiG is going to carry out these evaluations. In January 2008, IQWiG presented a new discussion paper on ‘Assessment Methods for the Relation of Benefits to Costs in the German Statutory Health Care System’ (IQWiG, 2008). The final decision on its cost effectiveness methodology is due some time in 2008.
To improve the information basis for patients choosing a medical provider, the Federal Joint Committee has to engage an independent organization (defined in the new §137a SCB V) and to pay for the services provided. The organization’s duties are to develop indicators for quality measurement and quality documentation, to participate in external quality assurance, and to make information about quality and quality assurance available to the public. To ensure the organization can fulfil its duties, medical providers within the in- and outpatient sectors are now obliged to provide all necessary quality data (§135a SCB V). Existing organizations (e.g. the Federal Office for Quality Assurance, BQS) must be used for this purpose and, if necessary, their organizational structure must be adapted to the above-mentioned new duties. However, it is not yet clear how this new organizational strategy can remain independent if the functions are to be carried out by existing organizations like the BQS.
Summary and conclusions
One common goal of nearly all health care reform legislation in the last five years has been to introduce more competition into the system thus to improve the efficiency and quality of health care provision. Although we can see some changes in the legal framework, the details described above show that the German strategy for quality assurance still basically relies on regulations and corporatist bodies (Altenstetter and Busse, Reference Altenstetter and Busse2005). Within its chosen regulatory approach, health policy’s main focus still lies on structural quality measures that limit market entry for other medical providers. Table 1 gives an overview of the situation.
Health care regulation and competition in Germany
Taking a closer look at the assignment of duties to the respective actors responsible for quality assurance functions, we can see the changes introduced by the health care reform legislation enacted in 2004 and 2007. Table 2 provides an overview of the main responsibilities assigned. We see that health policy, i.e. the Federal Ministry of Health is still responsible for establishing the legal framework for quality assurance. The regulatory details (and competitive elements) are assigned to a corporatist body, namely the Federal Joint Committee (FJC). This major new player in the field of quality assurance has a variety of duties to fulfil and represents the interests of various health care system stakeholders: medical providers, third-party payers, and – in a limited form – patients. With the FJC, the German quality-assurance field is dominated by a major corporatist actor.
Quality assurance actors and assignment of duties in Germany
In order to fulfil its duties, the FJC delegates certain tasks in quality measurement, data collection, and information provision to two different organizations: the Institute for Quality and Efficiency (IQWiG) and the organization mentioned in the new § 137a SCB V. Both organizations are supposed to be independent in fulfilling their objectives. Unfortunately, it is this very independence that is a critical element in the policy discussion about the roles of these organizations, particularly their financial dependence on the FJC corporatist body. As the independence of relevant organizations is necessary to create a strong reputation for quality measurement and providing objective information, only if these pre-requisites are met can the currently assigned organizations fulfil their duties in quality assurance – thus providing more (and more reliable) information to patients.
Finally, a more competition-based approach in quality assurance could emerge on this basis. Patients’ rights to receive information have been improved but patients are still waiting for more reliable information in order to make even better informed choices on their health care providers (Dierks and Schaeffer, Reference Dierks, Schaeffer, Klauber, Robra and Schellschmidt2005). The resulting quality-based competition among health care providers (and third-party payers, especially SHI funds) could help to further improve the quality of care in the German health system.
Acknowledgements
Thanks to Ansgar Wübker and Eva Ludwig for helpful comments on earlier versions of the paper. I would also like to thank one referee for helpful comments and the managing editor for providing editorial assistance. However, the usual disclaimers apply.
