To help inform the Conference on Managing Hospital Volumes, co-organised by the German Federal Ministry of Health and the OECD, and held on the 11th April 2013 in Berlin, the OECD Secretariat produced a paper to provide an international perspective on Germany’s situation and the current policy debate. The paper begins by comparing the structure of the hospital sector in Germany and its level of volumes with other OECD countries. It then provides a general background on how hospitals are financed in Germany. Finally, it provides some observations on the operation of the German hospital system from an international perspective, with a view to highlighting potential areas of discussion for policy makers.
Many OECD countries are currently grappling with the challenge of increases in hospital volumes. Addressing this requires policy makers to deal with the question of what represents a ‘medically appropriate’ amount of care. This is difficult to answer, and is likely to vary across countries which have different social preferences and often substantially different health care systems. Nonetheless, Germany’s level of hospital services has traditionally been higher than many OECD countries by a magnitude far greater than differences in age, morbidity and social preferences for accessing care across countries could justify. Compounding this situation is a high level of variation in the volume of services delivered across Germany’s Länder (states), raising the question of the extent to which this problem is driven by factors specific to the health system.
While the German health care system may have the financial capacity (and appetite) to continue to underwrite a very available hospital sector, the continual growth of hospital volumes from already high levels risks entrenching incentives for the over-provision and over-supply of hospital services. This situation ought to focus discussion and raise questions about whether high volumes of hospital services in Germany – both in recent years and in general terms – are medically appropriate. To help aid this discussion, this paper provides a number of observations about the structure and financing of hospitals in Germany. After providing an overview to the hospital sector and illustrating that Germany has greater volumes of hospital services when compared to other OECD countries, it argues that:
- Germany has a more open-ended approach to the financing of hospital services and weaker controls over the hospital budget than in many other OECD countries.
- DRGs in Germany are almost strictly used for pricing, whereas other countries use DRGs as one of many tools they have to influence hospital budgets.
- State governments do not have an incentive to rationalise hospital capacity where this may be desirable.
- The vast array of quality information available in Germany ought to be used to better direct financing.
Following the conference, the paper is now available as a Working Paper: No. 64 - Managing Hospital Volumes: Germany and Experiences from OECD Countries (October 2013).
Download Hospital Volumes: An International Perspective on Germany: a presentation by Mark Pearson during the BMG-OECD Conference on Managing Hospital Volumes, Berlin, April 2013.
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Health Working Papers