Winter is Coming – But Not Yet. German Health Policy Under the Third Merkel Chancellorship

Abstract

Health policy in Germany for a long time was considered to be hardly reformable. During the last 25 years, reforms became more frequent, yet substantial major policy change is still rare. When taking a closer look, German health policy follows phases of stability alternating with punctuations of this equilibrium when fundamental structural reforms occur. This contribution analyses the German health policy of the 18th legislative period against the backdrop of this newly emerging pattern of health policy making by applying Punctuated Equilibrium Theory (PET). Marginal reforms without profound reorganisation of the health system were only possible in this period because of the particularly favourable financial situation of sickness funds. Consequently, the conflicting parties and interest groups were able to postpone fundamental solutions to upcoming problems to a later point in time. After explaining the marginal reforms under the third Grand Coalition, it becomes clear that the dominant equilibrium is not going to last: Winter is coming and will bring about concussions in German health policy soon.

1. INTRODUCTION

Health policy belongs to the most important and conflictual policy areas. In Germany, more than 11 per cent of the Gross Domestic Product (GDP) are spent on health; in absolute terms, these were more than 344 billion euro in 2015 (Statistisches Bundesamt 2017). While the distribution of these disbursements essentially depends on political circumstances, with sickness fund policy leading the way, complex constellations of different interests and norms held by parties, health care providers and beneficiaries, payers, health departments, and regional actors lead to a high potential for conflict (Busse et al. 2017).

Despite its great importance, health policy did not receive much public attention in the legislative period between 2013 and 2017. This is surprising for several reasons: In other countries, such as Denmark and France, the years until 2017 experienced many changes especially regarding structural and technological aspects (Berger et al. 2018; Brunn and Hassenteufel 2018). With the financial crisis losing visibility in Germany and the refugee crisis only dominating part of the legislative period, the question evolves why health policy did not make it on the agenda while other policies – minimum wage, car toll – did. What are the roots of declined public interest in health policy? Did health policy lack any major problems? Was it possible to find consensual agreements regarding the existing challenges? Did no major policy change occur and if not, why?

This contribution sheds light on these questions by concentrating on alternating phases of health policy stability and change as proposed in Punctuated Equilibrium Theory (PET). PET enables the understanding of long-term phases of stability punctuated by short-term instances of fundamental policy change. Thereby, the perspective allows for explaining policy stability, which – especially in times of substantial need for reform and upcoming challenges – is irritating. Empirical underpinnings of the presented argument why German health policy did not – against all odds – undergo major reforms stem partly from interviews with insiders, who participated in coalition negotiations and the legislative process.

Outlining the PET assumptions and explanations with respect to bygone German health policy in Section 2, this contribution continues by giving a short overview on the starting situation for likely or non-likely punctuations in German health policy in 2013. While the fourth section reflects on the role of coalition negotiations and their resulting coalition treaty which already registered the majority of later health policy reforms in the explanatory view of PET, the sections five to seven analyse the health policy reforms of the 18th legislative period against the backdrop of PET as a perspective on policy stability and change. Consequently, the empirical sections will provide explanations for all health policy reforms of the respective government. A conclusion summarises the main argument and gives an outlook as well as possible solutions for future challenges in health policy.

2. PUNCTUATED EQUILIBRIA IN GERMAN HEALTH POLICY

PET assumes that individual behaviour follows bounded rationality. Rationality is bounded insofar as that cognitive limitations allow only serial processing of information – one issue at a time – and are guided by policy images. Analogously, governments may only give attention to one policy issue at a time. These radical shifts in attention then bring about major change (Breunig 2011). In contrast, the large part of policy-making is effected in a policy subsystem, e.g. the subsystem of environmental or education policy. PET uses the term negative feedback to describe the state that policy-making takes place within the subsystem. Negative feedback brings with it policy stability that grounds on stable institutional constraints, consistent and coherent actor configurations, consistent policy venues (arenas of discussion between policy actors and resulting decision-making) in the policy process as well as a dominant policy image – a common perspective on political problems. This setting spawns continuing small reforms without effecting fundamental changes. Disruptive changes arise from (seldom) positive feedback cycles. For positive feedback to take place, one of three things needs to occur: Either public opinion changes so that it questions the capability of a policy subsystem to deal with a given policy issue and puts this issue into the centre of public attention. Alternatively, new policy venues can be discovered and used by policy entrepreneurs through venue shopping. Policy venues mean the loci of intellectual discussion and decision-making. Lastly, problem definitions may be presented in the context of altered policy images. The resulting new decision structures, processes, actors, agendas, and emerging institutional and personnel constellations finally lead to fundamental reforms (Baumgartner, Jones, and Mortensen 2017).

PET has largely developed from evolutionary theories and comparative inductive analyses of budget developments in Western democracies. The argument rests on the premise that policy-making is either incremental and marginal or results in fundamental reforms. However, the latter are rare and only occur if a topic is set on the government agenda. Taking higher education policy as an example, the politics of admitting students to university programmes might largely be organised by universities and the respective politicians concerned with higher education policy regulate the number of university places with respect to the expected job offers. Normally, the government would not turn too much attention to this policy issue because it does not present a major challenge at a given point in time and there are other policy issues that demand consideration. However, the policy issue might raise attention at the top level of government when public opinion changes, for instance because there is an unequal distribution of university places depending on social status, impeding social mobility. Or, a recent example in Germany, the Federal Constitutional Court rules that the distribution of university places in medical training depending on the final grade is discriminating. In such a case, the government might shift its focus to this policy issue and induce the involvement of new actors and new ideas in the policy-making process on that policy issues. This would present positive feedback and thus might result in a major, substantial reform (Baumgartner and Jones 2009).

In German health policy, the Health Care Structure Reform Act (Gesundheitsstrukturgesetz, GSG) in 1992 is the most prominent example for positive feedback. The Enquete Commission (committee consisting of members of parliament and experts to work on specific issue for a longer period of time and present a final report to parliament) between 1987 and 1990 and the following cross-party cooperation between the two largest parties of conservatives (CDU/CSU) and social democrats (SPD) finally resulted in the first major health policy reform in Germany, which introduced competition between insurance funds for the first time. It was a compromise between CDU/CSU and SPD that enabled such policy to circumvent the strong corporatist actors of self-governance and private industry, which beforehand had hampered substantial reforms as veto players but without any formal decision powers. The self-governance encompasses those institutions and bodies that are part of indirect public administration with substantial decision power and largely autonomous governance of their realm. This includes public bodies such as the sickness fund associations or institutional bodies like the Joint Federal Committee (JFC, Gemeinsamer Bundesausschus (G-BA)) that includes five representatives from care payers (National Association of Statutory Health Insurance (SHI) funds), five representatives from care providers (two from the German Hospital Federation, two from the National Association of SHI Physicians and one from the National Association of SHI Dentists), and three impartial members. The JFC makes binding decisions, for instance on the scope of the benefits catalogue for SHI insured.

Up to now, policy analysis has spent much more attention to these phases of substantial policy change than to phases of relative stability. What form do decision processes take below the surface of public discussion? PET equally answers this question, analogously using the term negative feedback cycle. It describes policy processes with stable actor compositions in firm institutional venues, which merely marginally react to emerging challenges. As long as these institutional procedures do not reach the light of public discussion or experience shocks internal or external to the subsystem that provoke existing structures, there is no need and no request for new actors or new policy venues to produce new policy images. Subsequently, participating actors agree on pure distribution policies until a substantial reform becomes indispensable. The question here is not whether this point is reached, but when. Health policy in Germany is predominantly marked by this kind of development. This could lead to the conclusion, that – through the thicket of interests and in the light of many constraints regarding centralisation of power – the health system has been hardly reformable (Wilsford 1994). But that does not really hit the spot. Over long phases, the health system has been characterised by dense step-by-step reform processes with a vast number of acts and reform measures. But most of these reforms only took place inside of the internal institutions, unconnected to new policy images, and they did not shock the system by altering paradigms or constitutional structures and functions (Döhler 1991; Czada 2005).

During the last decades, health policy in Germany toggles between phases of structural stability and phases of more substantial reform discussion containing structural evolvement. At first sight, this finding contradicts the former view on the German political system: Its decentralised state structure accompanying the centralised society and three nodes (parties, cooperative federalism, and parapublic institutions like the social insurance) is supposed to produce a consolidation of change processes (Katzenstein 1987). Consequently, the altered pattern of policy-making indicates a presidentialisation of the German system (Poguntke and Webb 2007). In US presidentialism, relatively separated and often regional policy subsystems allow for policy change that at least as a rule may proceed within the policy area without any influences from outside or from other policy fields. According to the perspectives of international policy process research, substantial changes mostly are the result of situational constellations of subjective problem perceptions and power relations (Herweg, Zahariadis, and Zohlnhöfer 2017) or other specific constellations of explanatory factors for structural change (Bandelow et al. 2017). More specifically, political or policy entrepreneurs (Deruelle 2016), or allies of programmatic elites (Hassenteufel et al. 2010) hold an important role.

3. AUGURIES OF PUNCTUATIONS IN HEALTH POLICY UNDER THE THIRD MERKEL CHANCELLORSHIP

Since 1992, health policy in Germany has experienced institutional changes that promote policy-making by punctuation. Firstly, the interests of the associations that can act as veto players in the German health system have become highly fragmented in recent decades. Whereas until 1992, typical characteristics of German health policy encompassed a relatively stable ideological conflict between advocates of more self-responsibility versus representatives for solidarity, this orientation faded from the spotlight. Instead, more recent health policy has experienced many well organised single actors whose – primarily financial – interests competed, yet this conflict is less intense. At the same time, organisational structures have become more professional: Big pharmaceutical companies operate their own public affairs offices in Berlin while other interests are represented by agencies. Professional information services enable various actors to influence concrete decisions in a detailed and rapid way (Busse et al. 2017).

Likewise, the distance both within and between veto players has increased (Grüning, Strünck, and Gilmore 2008). Various competitive and efficiency instruments have been launched in the last decades, which shifted the relationships between service providers (e.g. between general practitioners and specialists) or health insurance funds (e.g. between general local health insurance funds and company funds) on a more competitive level. In consequence, there are more heterogeneous problems and possibly even distribution conflicts within interest groups, making concerted blockades against punctuation less likely (Breunig 2006; Worsham and Stores 2012). An example is the Pharmaceutical Market Restructuring Act (Arzneimittelmarktneuordnungsgesetz, AMNOG) in 2011. The law curbed the rising expenditure on medicines; pharmaceutical companies were forced to define the price of a new medicine in relation to its added value compared to therapies already on the market. Although this had a considerable impact on the German pharmaceutical market, the influential lobby of the research-based pharmaceutical companies could not prevent this law, as there were internal conflicts between German companies that were hit particularly hard by this law and internationally operating companies that were more willing to compromise with it.

Secondly, the scope of government intervention in the health system has increased in recent years, which also improves the likelihood of punctuations (Fagan, Jones, and Wlezien 2017). Since the GKV-WSG (Act to Strengthen Competition in the Statutory Health Insurance (GKV-Wettbewerbsstärkungssgesetz)) 2006, the legislator has had a direct influence on the amount of insurance contribution rates, which was previously left to each health insurance company. In several reforms, the state centralised structures of self-government. This includes the statutory establishment of the Joint Federal Committee (Gemeinsamer Bundesausschuss, G-BA) in 2003, which was successively assigned more control tasks in subsequent years, or the establishment of the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) in 2007, to which the tasks of the central associations of the individual health insurance funds were transferred. This centralisation simplifies state interaction with self-government and counteracts blockades of health policy reforms occurring by partial interests. In addition, the state has increased direct influence on self-government by increasingly monitoring the composition of top bodies.

Thirdly, with a special importance of parties in a parliamentary system like Germany, parties possess a central role in putting new policy images on the agenda, for instance in coalition negotiations (Walgrave and Varone 2008). Although the development of German health policy in recent years has been characterised by strong ‘expertization’ (Ewert 2015) and party-political de-ideologisation (Knieps 2017), the agendas of the governing parties still leave their mark on the system. Since 1998, the German health system thus has been exposed to various influences, because in each legislative period a different party supplied the health minister. Changing party interests together with the need for official profiling of each health minister increase the possibility of positive feedback.

According to the theoretical approach of PET, the overall circumstances for positive feedback and punctuations were favourable in the 18th legislative period. But health policy did not receive much public attention and did not make it on the agenda of the top level of government (Osterloh and Rieser 2014). This is all the more surprising, because the number of reforms was higher than in other legislative periods, which indicates that there had been serious problems and need for reform. But measures were implemented ‘in silence’ within the health subsystem and did not provoke directional changes. They also did not provide answers to essential challenges facing the system. The first explanation could be the refugee crisis, which dominated the attention of the government and the public media – but did not begin until 2015 and thus cannot explain the lacking punctuation in the first half of the legislative period. Furthermore, certain events in other policy areas actually got on the agendas despite the refugee crisis, e.g. minimum wage, car toll, rent control or female quota. The refugee crisis in particular also revealed structural deficits in the German health system, which could have turned into punctuations, but did not.

The other explanation is the unexpected positive financial situation of health fund and statutory health since 2011, on which health policy stability in Germany bases. This surplus also increased systematically in the 18th legislative period and amounted to a total of 25 billion euro in 2016 (BMG 2018). The essential root of these reserves is the increase of general contribution rates from 14.9 to 15.5 per cent, as decided through the Act for Sustainable and Socially Balanced Financing of the SHI (GKV-Finanzierungsgesetz, GKV-FinG) in 2011, which also presented a reaction to the anticipated setback in economic activity following the financial crisis (Bandelow and Hartmann 2014). However, this expectation proved wrong. While the economy boomed, the financing situation of sickness funds improved even more. Therefore, the Budget Accompanying Act 2014 decided to continue the reduction of the federal subsidy to the GKV for the years 2014 and 2015 (10.5 and 11.5 instead of 14 billion euro). Hence, the economic starting situation of German health policy since 2011 differs substantially from former periods of pivotal conflicts after the second oil crisis: There was no tangible financial pressure to either increase contribution rates, cut benefits and services or change structures. Thus, the financial crisis cannot explain German health policy in the 18th legislative period.

As a consequence, this article now turns to central mechanisms of PET as potential explanations for German health policy-making from 2013 to 2017. No major change was visible, despite existing crises and a favourable starting situation for potential punctuations. Drawing on the concepts of PET including the choice of policy venues and policy processes on subsystem level, the empirical study of reforms outlines in what way PET reveals why health policy in Germany had been as stable as it was.

4. POLICY VENUE: HEALTH POLICY IN COALITION NEGOTIATIONS 2013

For policy-making in Germany, coalition negotiations have turned into a central arena of decision-making and thereby in terms of PET present an important policy venue. The importance of these negotiations rose with increasing numbers of participants, length, and duration of negotiations as well as depth of detail and extension of coalition treaties. In 2013, negotiations took place on four levels coordinated by a steering committee and documented by a team of editors. When party chairs at the top level make decisions without consensus on the lower level, on which the expert working groups act, these decisions may be interpreted as punctuations of the equilibrium, because they do not stem from the policy experts in the subsystem. Decisions that purely emerge from expert groups, however, rather resemble the state of the equilibrium.

In 2013, the coalition negotiations between CDU/CSU and SPD soon came to agreement in essential questions of health policy, such as admitting hospitals to offer services in outpatient care. There was some dissent, though, especially regarding the handling of the market for established drugs after the AMNOG. Several issues were part of bargaining business: While the SPD achieved the abolition of general additional contributions raised by sickness funds (‘small capitation fee’), the CDU/CSU in return realised the long-term care fund. Among the most important actors of these negotiations were Jens Spahn (CDU), who later became junior minister for finances (parlamentarischer Staatssekretär), and Karl Lauterbach (SPD), later vice chair of the parliamentary party. Hermann Gröhe, although later health minister, did not participate in the negotiations. Another peculiarity of the 2013 negotiations on health policy was that the FDP had dropped out of parliament and government so that the health minister in office, Daniel Bahr (FDP), did not participate in the negotiations. As a result, there was no one-sided access of one of the negotiating parties to resources of the health ministry. Nevertheless, Bahr agreed with the health ministry answering joint requests of all negotiating parties. Both sides thus had experienced specialists in health policy while upper levels of decision-making were less relevant for health policy than for other areas (interview with a high-ranking civil servant at that time; interview with two representatives from peak interest associations).

Tying in with the starting situation of a particularly positive financial situation in 2013, coalition negotiations started with a customary review of the financial status. Specialists from the German Ministry of Health (Bundesministerium für Gesundheit, BMG) confirmed this convenient state of finances, but (wrongly) projected the risk of financial scarcity from 2015 on. Yet, the lack of concrete need for action allowed for leaving aside the most visible conflicting issue: the possible introduction of a citizen’s insurance.

Even though the later health minister Hermann Gröhe did not belong to the negotiating actors, health policy reforms of the 18th legislative period largely and systematically followed the agreements recorded in the coalition treaty (Table 1). This concerns primarily the area of sickness fund policy whereas deviations from the coalition treaty touch upon areas that potentially in future may lead to a punctuation of equilibrium, like the Act on Secure Digital Communication and Applications in the Healthcare Syste – E-Health Act (eHealth-Gesetz), and the Act to Improve Hospice and Palliative Care. Only the SHI Self-Governance Strengthening Act at the end of the legislative period shows a real punctuation of stable policy-making.

TABLE 1 HEALTH POLICY MEASURES IN THE 18TH LEGISLATIVE PERIOD IN GERMANY; 2013–2017

Act	Legislative Initiative; Approval by the Bundesrat Required	Draft; Promulgation; Commencement
Budget Supplement Act 2014	Federal Government; No	13/03/2014; 11/08/2014; 16/08/2014
First Long-Term Care Strengthening Act (Erstes Pflegestärkungsgesetz – PSG I)	Federal Government; No	30/05/2014; 17/12/2014; 19/12/2014
SHI Financial Structure and Quality Development Act (GKV-Finanzstruktur- und Qualitäts-Weiterentwicklungsgesetz – GKV-FQWG)	Federal Government; No	11/04/2014; 21/07/2014; 01/01/2015
SHI Care Improvement Act (GKV-Versorgungsstärkungsgesetz – GKV-VSG)	Federal Government; No	29/12/2014; 16/07/2015; 22/07/2015
Preventive Health Care Act (Präventionsgesetz – PrävG)	Federal Government; No	29/12/2014; 17/07/2015; 25/07/2015
Act to Improve Hospice and Palliative Care (Hospiz- und Palliativgesetz – HPG)	Federal Government; No	01/05/2015; 01/12/2015; 08/12/2015
E-Health Act (E-Health-Gesetz)	Federal Government; No	29/05/2015; 21/12/2015; 29/12/2015
Hospital Structure Act (Krankenhausstrukturgesetz – KHSG)	Federal Government; No	11/06/2015; 10/12/2015; 01/01/2016
Second Long Term Care Strengthening Act (Zweites Pflegestärkungsgesetz – PSG II)	Federal Government; No	14/08/2015; 21/12/2015; 01/01/2016
Third Long Term Care Strengthening Act (Drittes Pflegestärkungsgesetz – PSG III)	Federal Government; Yes	12/08/2016; 23/12/2016; 01/01/2017
SHI Self-Governance Strengthening Act (GKV-Selbstverwaltungsstärkungsgesetz – GKV-SVSG)	Federal Government; No	17/11/2016; 21/02/2017; 01/03/2017
Care Professions Reform Act (Pflegeberufereformgesetz – PflBRefG)	Federal Government; Yes	15/01/2016; 22/06/2017; 01/01/2020
SHI Pharmaceutical Supply Strengthening Act (GKV-Arzneimittelversorgungsstärkungsgesetz – AMVSG)	Federal Government No	14/10/2016; 04/05/2017; 13/05/2017

Source: Own compilation based on the website of the German health ministry (https://www.bundesgesundheitsministerium.de).

While the coalition negotiations present a new venue for policy-making in the sense of PET, health policy-making at the start of the legislative period in 2013 continued as equilibrium politics in the subsystem. Health policy was largely and almost exclusively negotiated within the respective working group that encompassed the usual actors of the subsystem without getting attention from the top level of government. Thus, a punctuation through venue shopping did not occur. The following sections review the single reforms of the 18th legislative period to assess whether other sources of punctuations can be detected and how health policy outcomes of this period can be explained.

5. NEGATIVE FEEDBACK: DISTRIBUTION POLICIES IN TIMES OF ABUNDANCE

Following the favourable starting situation, health policy of the 18th legislative period concentrated on distributing the saved-up surplus according to requests from financial and service providers as well as publicly communicated deficits of the health care system. These distribution policies illustrate negative feedback (Baumgartner, Jones, and Mortensen 2017, 57) and reduced the call for structural reforms. During this time of abundance, quality became the shared policy image (Baumgartner and Jones 2009, 25) of the largely stable subsystem. Unlike solidarity or self-responsibility, this policy image as normative principle is acceptable to all parties involved in health care.

Given the positive financial situation, the lead of the responsible ministry managed to promote emerging claims systematically alongside the coalition treaty, without any public attention and within the boundaries of the subsystem. However, aspirations were not limited to the health policy subsystem, but also came from other subsystems, such as the ministry of finances aspiring to break even. Because of the convenient financial situation, the health system was able to contribute to this aim by reducing tax subsidies to the SHI. The Budget Supplement Act for the years 2014 and 2015 decided to continue the already earlier effected reductions of tax subsidies.

Tying in with this measure, the SPD achieved a reorganisation of the structure of additional contributions and special payments, as agreed on in the coalition treaty. Additional contributions once were divergent depending on the sickness fund and raised as a general contribution with tax subsidy in case they exceeded 2 per cent of the income liable for insurance contributions. Moreover, a so-called special contribution of 0.9 per cent of the employee’s contribution was raised, while at the same time keeping the employer’s contribution stable. In 2014, the SHI Financial Structure and Quality Development Act integrated the special contribution within the additional contribution, which in turn is now dependent on income. Consequently, tax subsidies became redundant (see Table 1).

As a further distribution policy, the SHI Care Improvement Act installed the innovation fund in 2015. Between 2016 and 2019, this fund fosters testing and researching of trans-sectoral types of care with an annual overall budget of 300 million euro. Both sickness funds and health fund respectively finance one half of each sponsorship sum (Knieps 2017). Since a ten-headed committee takes decisions on funding within the innovation fund, and since this committee consists of members of the same institutions represented in the Joint Federal Committee (Gemeinsamer Bundesausschuss, G-BA) as well as of health ministry representatives, the usual actors with formal decision power in the health care system allocate the resources here, too. Thus, the fund presents ‘business as usual’, reducing the probability of bringing new actors, impulses and ideas into the system and disturbing the equilibrium.

The refugee crisis exacerbated another structural deficit, which affects the relationship between extraneous insurance benefits and tax-funded benefits. The starting points were blatant deficits in the medical care of refugees. Refugees are not members of the statutory health insurance fund. Municipalities approve their need for medical care and pay a reimbursement rate to the health insurances. The health care of refugees was therefore associated with considerable bureaucratic effort and was subject to local quality fluctuations. The Asylum Acceleration Act (Asylbeschleunigungsgesetz, ASylBeschlG) 2015 has opened up the possibility for refugees to receive an electronic health card from health insurances even without membership in order to simplify access to health services and billing procedures. After recognition, the rate of reimbursement for refugees is adjusted to the unemployment subsidy rates. In the course of the legislative process, there was discussion concerning the reimbursement rate that health insurance companies receive for unemployment subsidy recipients, which was set much too low (90 euros instead of the average 136 euros per month required). This would have been an occasion to reform cost-covering contributions for refugees and unemployment subsidy recipients from the federal tax budget. However, this opportunity was not seized. Instead, rising expenditure on health care for refugees was refinanced through grants from the well-filled Health Fund (Schaich-Walch et al. 2016).

A little separated from health policy is the field of care policy. Because of the lighter network of established actors, this field provides less possibility for negative feedback and thereby a greater probability of punctuations. Nevertheless, the 18th legislative period experienced as few punctuations as in the area of health policy, also due to equally high financial reserves in care insurance. The Long-Term Care Strengthening Acts effected the distribution policy and redefined the need for nursing care (from three levels to five degrees of required nursing care) as to an orientation not only towards illness or disability but also towards physical, psychological, and cognitive condition. Care services were adapted to price developments and extended as a result of the favourable finance situation. At the same time, contribution rates increased, of which a part flows into a newly established care fund that is to absorb contribution increases in the next 20 years. Finally, municipalities received more competencies when it comes to care consulting. Although the reforms contain far-reaching modifications, they present – against the backdrop of the PET – stable policy-making with usual actor constellations, not least as a result of the surplus in the care insurance. Finally, the Care Professions Reform Act complemented the care policy agenda of 2013–2017, expected to come into force in 2020. By introducing a two-year general nursing education, it aims at promoting the attraction of care jobs and counteracting related skill shortages.

6. NEGATIVE FEEDBACK: MARGINAL REFORMS UNDER STABLE CIRCUMSTANCES

Regarding hospital policy, the Hospital Structure Act in 2016 indicates the hospital reform of the 18th legislative period. Largely contested on the side of unions and self-governance, such reform was especially expensive with additional expenditures of around 0.9 billion euro in 2016 and anticipated increasing additional expenditures in the following years. Originally, the reform aimed at addressing two problems: Disincentives produced by diagnosis-related group (DRG) systems leading to an orientation towards quantity-concerned instead of quality-concerned diagnoses, and the decreasing investment volume of states into hospital financing. Furthermore, the reform increased the jobs for nursing staff, activated financial incentives for keeping care equipment in good condition, and improved support for ambulatory emergency care. Concerning inpatient care, a structure fund disposing of a total of 500 million euro aims at reducing overcapacities by fostering the conversion of stationary care into stationary care institutions offer non-stationary treatment of patients. At the same time, the G-BA is allowed to now set nation-wide guidelines for hospital financing and market access, which might indicate a paradigm change from state-level regulation to federal state and self-governance regulation.

As a result of the AMNOG, which was designed by the previous government, and cost containment through a pricing moratorium and manufacturers’ discounts, the Grand Coalition saw no need for action regarding drug policy. It was the AMNOG that introduced early benefit assessment of drugs in Germany. Since then, every newly approved medicine must be tested for its additional benefit and may not be sold more expensively in case it does not present any. If the medicine offers an additional benefit, the manufacturer and the peak association of sickness funds negotiate a selling price (Ruof et al. 2014). The coalition treaty refrained from a benefit assessment of the existing market, arguing that this would overload the Institute for Quality and Profitability in the Health Care System (Institut für Qualtiät und Wirtschaftlichkeit im Gesundheitswesen, IQWIG) and the G-BA. Anyway, manufacturers had meanwhile found ways to bypass regulations of the AMNOG. Unrealistically high prices to begin with result in high final prices and the numbers of applications for approval of orphan drugs (to treat rare diseases), which are not subject to the additional benefit assessment, rose rapidly. Consequently, the AMNOG did not reach the desired savings. As a reaction, cooperative negotiations with the pharmaceutical industry resulted in the SHI Pharmaceutical Supply Strengthening Act. However, it contained only marginal corrections of the AMNOG and it was again the favourable financial situation that enabled the pharmaceutical industry to succeed in averting a possible retrospective validation of (low) reimbursement prices.

The well-filled treasuries also allowed for negative feedback within the system of prevention policy. Between 2005 and 2013, the Preventive Health Care Act had failed to be approved three times but finally passed in 2014. In virtue of divergent interests and power relations in parliament and the federal council, as well as complex interest constellations on different levels, the government relinquished the involvement of all social insurance carriers in a prevention fund and moved away from the idea of a unified legal regulation. Instead, the reform kept to the established system of social insurance carriers and upheld their existing prevention tasks. Obviously, this measure depicts classic policy-making in the equilibrium, because neither new policy images nor new actors found their way into the system. Financially, the burden for extending preventive tasks is with the GKV. Sickness funds are supposed to invest around double of the former amount into prevention services and health promotion. A national prevention conference (NPK) organised by the peak organisations of statutory health, care, casualty, and pension insurance, is intended by the reform to develop and pursue a joint prevention strategy.

7. FIRST SIGNS OF PUNCTUATIONS IN THE HEALTH POLICY EQUILIBRIUM

Despite the strong negative feedback through distribution policies in the health care system during the 18th legislative period, first signs of punctuations are visible from time to time. Positive feedback occurred, firstly, when strategically addressing new issues and, secondly, as a result of the postponed requirement of reregulation. These present first signs of a phased transition towards policy change (Studlar and Cairney 2014). Reregulation becomes necessary either because of conflict internal to the system, such as the contradiction of private versus statutory health insurance or ambulatory versus stationary care, or because of new developments external to the system, such as digitalisation. All three of these types of positive feedback appeared in the legislative period.

Hermann Gröhe managed to emphasise his own concerns with respect to hospice and palliative care, written in the Act to Improve Hospice and Palliative Care. Already at the beginning of his term of office, he announced his intention to focus reforms more on ethical questions. Consequently, the HPG did not just aim at improving care for dying and terminally ill patients but accompanied intensive discussions on assisted suicide. When extending palliative care through the HPG, one hope was to avoid patients at the close of their life having to request assisted suicide. From the PET perspective, the reform presents a slight punctuation of the equilibrium as it touches upon a new topic at the edge of health policy and puts it centre stage of public discussion. Ethics thereby leaves its institutional frame so that new actors are enabled to shape this topic with reference to their ideas. With the HPG, insured people hold a legitimate claim for sickness fund consulting regarding services in hospice and palliative care. In the general ambulatory palliative care (AAPV), the G-BA records requirements concerning palliative care. Licensed physicians that include hospice and palliative care in their service portfolio get unbudgeted rewards. Further measures facilitate specialised ambulatory palliative care in rural areas, increase reimbursable costs of stationary and ambulatory hospice work, financially foster palliative care in hospitals without a separate palliative care unit, and provide incentives for stationary care establishments to conclude contracts with SHI-physicians to improve medical support in homes (Kohlen 2016).

In contrast, the 2017 SHI Self-Governance Strengthening Act addresses challenges internal to the system. Prior to the reform, controversies and scandals in the National Association of Statutory Health Insurance Physicians (Kassenärztliche Bundesvereinigung, KBV) produced a need for action. They concerned accusations of corruption and distribution disputes among the two bases of the association: general practitioners and specialists. The two chairs were deeply disunited and thus blocked the investigation of the scandals and affairs of the umbrella organisation. Hence, the reform draft targeted a considerable expansion of ministerial supervision of the entire sphere of self-governance. Proposed measures provided for turning the legal supervision into a functional supervision, which – understandably – ended in resistance on the side of the self-governing institutions that found fault in the supervision of organisations that up to now had not given any reason for complaint.

After frequent revision of the draft, the final version clarified responsibility concerning legal and functional supervision and moderated authorisation of ministerial representatives to interfere in processes of the self-governance. Instead of a regular external scrutiny of processes in the peak associations, the reform imposed an annual reporting obligation of the health ministry to the parliamentary health committee. This obligation encompasses information on supervisory measures and control of self-governance. Additionally, the reform changed electoral laws of administrative councils and KBV, composition of the KBV board (complemented by a third ‘neutral’ member), and extended the right to inspection and the right of examination by the national assembly of SHI-physicians as well as the transparency precepts of the assembly members. Against the backdrop of the developments of the self-governance, which shows an erosion of traditional self-governance organisation, the reform presents a further example of centralisation and extension of hierarchical types of governance. This includes also an extension of G-BA competences since its foundation in 2004, partly as a non-intended result of single reforms and partly explicitly intended by the legislator as also in this legislative period. Although consisting of members of the self-governance, the G-BA functions and works predominantly with recourse to expert knowledge and not to interests. In total, the GKV-SVSG therefore depicts a punctuation of the equilibrium by shifting responsibilities, and strengthening actors that originally did not play a major role in policy-making on this level (Altenstetter and Busse 2005).

As in other policy fields, too, digitalisation presents an innovative challenge for health policy to address. Expanding the telematics infrastructure including corresponding digital applications is especially important in health care. While the electronic health card had already been planned to be introduced in 2006, it was distributed only in 2009 and, having insufficient infrastructure, it restricted itself to the storage of the assured people’s core data. In the last years, Germany was considered to be a late runner in international comparisons of e-health and telemedicine. To make up leeway, the E-Health Act (Gesetz für sichere digitale Kommunikation und Anwendungen im Gesundheitswesen) stipulated several measures. These included an area-wide digital infrastructure by mid-2018 connecting all doctors' surgeries and hospitals, a modern core data management examining and updating the assured people’s core data that furthermore aims at preventing service malpractice, storage of medical emergency data (pre-existing illnesses or allergies) at the patients’ discretion, a firmly written medication plan when prescribing more than three medicines, introduction of the electronic patient chart by 2019 containing information on the patient’s treatment as well as supplementing data (emergency data, vaccination card, or medication plan) with the possibility for the patient to complete the data by information on nutrition and exercise, and, finally, the introduction of teleconsulting and consultation-hours via video. As the reform’s implementation runs rather sluggishly, it remains to be seen whether the actions taken bring about the desired effect. Due to strong fragmentation in the service landscape and complex diversity of interests, the health system remains a tricky area for information technological innovations, which would require incremental changes rather than punctuated major change. In order for the E-Health Act to succeed, subsequent governments must keep up with technological innovations and enhance started measures.

8. CONCLUSION

How can one explain health policy in the 18th legislative period in Germany? This contribution emphasises the valuable insights PET gives in the analysed case. In doing so, it ties in with existing research on punctuated equilibria (Baumgartner et al. 2009) and provides evidence that a pluralisation of interests with complex decision processes and a variety of policy venues accompanying favourable financial situations in a specific policy field increases stability in the equilibrium but piles up a need for reform that finally will break into a punctuation. Between 2013 and 2017, health policy in Germany is an illustrative example of policy-making in the equilibrium, only partly showing first signs of punctuations. Against the backdrop of the PET, it becomes clear that German health policy-making increasingly follows the US-American pattern, turning away from traditional continuous policy-making without substantial changes. Previously, Germany fostered ongoing continual policy-making because of semi-sovereign structures of its political system. But especially the pluralisation of parties and unions as well as the fragmentation of decision processes and differentiation of policy subsystems are drivers of the changing pattern here (Breunig 2006). Partly, the federalism reform facilitated this modified pattern: Since 2007, no health reform needed approval of the federal council. Consequently, there was a declining need for cross-partisan and cross-governmental (between state and federal government) cooperation. Nevertheless, in case of substantial structural reforms, the federal council still needs to give its approval, for instance when sickness fund governance is to be reorganised. The institutional arrangement in Germany provides an exceptional opportunity for strategic venue shopping (Grüning, Strünck, and Gilmore 2008). When approval by the federal council is required, legislators may either join forces with corporatist actors to leverage partisan conflicts, or form a cross-partisan alliance to rob the interest groups of the threat potential to impinge on election campaigns.

Compared to previous legislative periods, the analysed period distinguishes itself because of its particularly favourable financial situation. This allowed for temporarily postponing comprehensive structural reforms, extending services and additionally funding ‘innovative’ projects. Conflicts are to follow in the upcoming legislative period, when the expensive reforms such as the KHSG produce consequential costs. A lack of palpable crises allowed legislators to handle health policy in accordance with the agreements in the coalition treaty. Unlike earlier phases of health policy, there were no stable conflict lines between old advocacy coalitions of proponents of solidarity on the one side and of self-responsibility on the other. An innovative programmatic elite, such as the one established through the Enquete commission at the beginning of 1990s advocating the introduction of elements of competition while at the same time strengthening centralisation of governance, was equally absent.

While PET not merely explains phases of stability and experienced policy-making in the equilibrium, it also allows for predicting that this equilibrium will not last. New punctuations will come. Triggers may come from within the system, which at some point will have to face the external challenges that already exist and react with some kind of structural reforms that they were able to defer owing to the financial surplus. Structural reforms for instance should address the unclear role of the private health insurance, the unclear relation between ambulatory and stationary care with its resulting inefficiency, and the reorganisation of the morbidity oriented risk adjustment scheme (morbiditätsorientierter Risikostrukturausgleich, mRSA). Regarding the latter, two expert assessments were mandated, of which one is already present since October 2017 right after the last general election. It proposes a considerable extension of already contested adjustments. Structural reforms are also required in the area of skill shortage, especially with respect to nursing care and country practitioners. Digitalisation has up to now only resulted in disappointment. Negative experiences with the electronic health card and a lack of mutual consent in terms of governance structures rank among the biggest challenges. Hospital investment still remains a conflicting aspect when it comes to state and federal responsibility. Hospitals in general differ significantly depending on sponsorship and size. In the ambulatory sector, the increased specialisation led to new distribution disputes. Besides arising from intrasystem challenges, new punctuations may also result from external influences. A change in public opinion is one of the possible catalysts. Pertaining to the divide of statutory and private health insurance, public opinion is likely to polarise in the near future, also against the backdrop of a changing European political landscape, through enforced EU cooperation on health policy or newly emerging parties.

After the general election in 2017, another grand coalition resumed work. But, in contrast to 2013, health policy has been put on the agenda by the SPD (with their claim for a citizen’s insurance) after the exploratory talks of CDU/CSU, FDP and the Green Party failed. While agreement has been reached regarding payment of insurance contributions on equal terms by employers and employees, some reforms still are under discussion. An established working group between state and nation-state actors is to elaborate on future developments in cross-sectoral care. The depletion of sickness funds’ financial reserves is scheduled in line with a reform of the risk structure compensation scheme. Since a punctuation may equally serve as a partisan strategy as in the electoral campaign or as an individual stepping stone towards higher office, there is great potential for substantial change. Therefore, and this is in line with the prediction of the PET, health policy will surely overcome its state of equilibrium in the near future. Health policy actors should develop solutions to protect against the cold when winter is coming. An Enquete commission, 25 years after the last one, might help to form new programmatic actors to weather this season.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

ABOUT THE AUTHORS

Nils C. Bandelow is Professor of Political Science at the University of Braunschweig and Co-editor of European Policy Analysis journal. His research interests concern health policy established theories of the policy process and emerging frameworks such as the Programmatic Action Framework (PAF) and Social Identity Framework (SIF).

Anja Hartmann is Professor for Sociology of Demographic Change at the University of Applied Sciences and Arts in Dortmund, Germany. Main areas of research are health care systems and health care policy, Public Health, prevention and health promotion, demographic change and life course sociology.

Johanna Hornung is Research Associate at the Chair of Comparative Politics and Public Policy, University of Braunschweig. She is Editorial Director of the European Policy Analysis journal (EPA). Her research interests include comparative public policy applying policy process theories and psychological concepts.

ORCID

Nils C. Bandelow http://orcid.org/0000-0002-6745-3253

Anja Hartmann http://orcid.org/0000-0002-8520-754X

Johanna Hornung http://orcid.org/0000-0001-6542-3985

Additional information

Funding

This work was supported by Deutsche Forschungsgemeinschaft [grant number BA 1912/3-1] and the Agence Nationale de la Recherche (grant number ANR-17-FRAL-0008-01).