By Matthias Knöll, International Health Law Student, University of Groningen

Recently, Germany has debated a new reform of its health care system to remedy some of the worst outcomes of the market-based reforms introduced around 20 years ago, leading to, amongst other things, over-invasive treatment, and difficulties in financing the treatment of children. Those reforms were based on the Fallpauschale, a flat reimbursement rate system based on the diagnosis-related group (DRG). [i] Each year, the rates are calculated on the basis of data, which according to studies neither takes into account the totality of hospitals[ii] nor the quality of treatment afforded.[iii] The rationale for this form of accounting was to save costs by increasing the efficiency of health care through market mechanisms.[iv] The Fallpauschale is  considered to be the main problem in the current health system[v], necessitating a fundamental reform of the entire system.[vi] Despite the politicians mainly responsible for the planned reform[vii] recognizing this, the Fallpauschale will continue to exist[viii] while partly being replaced by other forms of financing.[ix] To highlight the issues with the continued reliance on this system, I will outline how the introduction of the Fallpauschale in the beginning of the 2000s has impeded the realization of the right to health as found in the International Covenant on Economic, Social and Cultural Rights (ICESCR)[x] and other international instruments related to the right to health.

The Right to Health

While the right to health in international law does not prescribe a certain manner of reimbursing hospitals,  the ICESCR obliges states to work towards the progressive realization of the right to health “as expeditiously and effectively as possible”.[xi] Increasing efficiency certainly is a part of this process, but any measure aimed at this needs to comply with the interrelated Availability, Accessibility, Acceptability, Quality (AAAQ) criteria as outlined by the Committee on Economic, Social and Cultural Rights (CESCR).[xii]  The following paragraphs will give a non-exhaustive list of non-compliance with these due to the Fallpauschale as a means to test the German health care system against its international obligations.

A)   How care was affected

As the most profitable approach for health care providers is to perform as many surgeries as possible in a short time,[xiii] patients are prematurely released to make room for new patients, impacting the quality of care offered. Between 1995 and 2010, the average time patients spent in hospitals dropped from 10.8 days to 7.9 days.[xiv] Releases of  unrecovered patients is increasingly common, for which the term “Blutige Entlassungen”, translating to bloody releases, was coined.[xv] In an interview with a former nurse, I was told that lying about complications which didn’t exist was necessary in order to protect a patient’s health due to premature releases being ordered.[xvi] Such practices seriously impede the quality aspect of the right to health, as it goes against scientifical and medical appropriateness. [xvii]

The Fallpauschale also lead to over-invasive, non-indicated procedures.[xviii] As routine surgeries and treatments can be optimized, hospitals specialize in procedures which are considered the most profitable.[xix] Statistics show how this has led to a sharp increase in operations without medical necessity, such as counterproductive back operations[xx] and the implantation of prosthetic hips[xxi] when less invasive options could have led to better results. The perverse incentives created by the DRG-based reimbursement have been criticized in a public appeal signed by thousands of doctors.[xxii] As patients are not properly informed properly about their options before operating, there is also breach of the information accessibility aspect of accessibility.  The failure of the state to implement a legal framework to ensure hospitals practice due diligence is a violation of its obligation to protect its citizens [xxiii] from profit-driven health care providers. Another example of such over-invasive approaches is the excessive amount of C-sections performed in Germany, which is more profitable than a regular birth.[xxiv] This runs counter to the obligation to safeguard reproduction found in the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) [xxv] due to the risk of complications from unnecessary C-sections for the mother, while also threatening the right of children to the highest attainable standard of health. [xxvi]

Moreover, the availability aspect was heavily affected, due to hospitals making the most profit from running at maximum capacity. This caused a decrease in reserve capacities while existing spaces are used intensively with one nurse caring for as many patients as possible, leading to preventable deaths.[xxvii] More than 10 percent of all full-time jobs in German hospitals were lost in the 4 years after the broad introduction of the Fallpauschale, which is attributed to personal costs being one of the main possibilities of cutting costs.[xxviii] Especially the time-intensive treatment of children is insufficiently compensated, which has contributed to the underfinancing of the child care sector which suffers from a disproportionate closure of pediatric clinics[xxix] and increasingly long distances for the treatment of rare diseases.[xxx] While there were 416 paediatric stations in 1995, only 334 of those remained in 2020.[xxxi]  This is directly impeding the availability and accessibility of treatment options for children and their right to the highest attainable standard of health.[xxxii]

B)    Retrogressive measures

These effects show that the introduction of the Fallpauschale is a prohibited retrogressive measure as it cannot be “justified by reference to the totality of the rights provided for in the Covenant and in the context of the full use of the maximum available resources”[xxxiii] in a highly developed country such as Germany. It is striking that the intended effect of reducing the turnaround time in hospitals and cost-saving measures for operations was phrased as something positive at the time the Fallpauschale was introduced,[xxxiv] with insufficient consideration for the negative outcomes on the fulfilment of the right to health. This shows that the “most careful consideration” required before introducing retrogressive measures was clearly not given[xxxv] and Germany did not fulfil its obligations under the ICESCR. Moreover, retrogressive measures affecting core obligations such as non-discriminatory access and distribution of health facilities[xxxvi] are always prohibited.[xxxvii] This is especially critical in regards to the effects on child care and the right to reproductive health of women.

The way out?

Considering the devastating effects of the Fallpauschale and the harsh criticism thereof, it would seem prudent to suggest a radical policy change which removes all profit incentives that could impede the realization of the right to health of patients. Such an approach would be in line with the slogan of the above-mentioned public appeal of doctors and experts to put “Humans before profit” (in German: Mensch vor Profit).[xxxviii]

While Lauterbach, the German Minister of Health, promised a “necessary revolution in the hospital sector”[xxxix], the reform he presented in the beginning of December is likely to fall short of its promises.[xl] The Fallpauschale continues to cover 60% of the budget, but will be supplemented by a reimbursement for the provision of capacities itself (Vorhaltepauschale) independent of the number of patients treated.[xli] While this is a first step towards improving the availability of health care, no sufficient measures to combat the pressure on employees in the health sector or to prevent over-invasive approaches have been suggested. The German Medical Association has called the reform a first important step, but continues to call for abolishing the DRG-based reimbursement.[xlii] Experts had previously called for an entirely new system in the highly affected pediatric care,[xliii] which was only taken into account by reducing the DRG-dependent reimbursement from 60% to 40%.

Thus, market mechanisms will continue to dictate the decisions hospitals must make to cover their costs or to increase shareholder profit. Hospitals will continue to spend as little on payroll costs as possible while keeping patients as shortly as possible, and over-invasive procedures for the cheapest price possible will remain in the interest of profit-driven hospitals and thereby impede the right to health.  It seems unlikely that these issues can be remedied as long as the Fallpauschale will continue to exist in its current form.

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[i] ‘Krankenhausfinanzierung’ (Bundesministerium für Gesundheit (Ministry for Health)) <www.bundesgesundheitsministerium.de/krankenhausfinanzierung.html> accessed 5 January 2023.

[ii] Michael Simon, Das DRG-Fallpauschalensystem für Krankenhäuser Kritische Bestandsaufnahme und Eckpunkte für eine Reform der Krankenhausfinanzierung jenseits des DRG-Systems (Hans-Böckler-Stiftung 2020) 48f.

[iii] ibid 132.

[iv]  Jürgen Klauber and others, KrankenhausReport 2020 Finanzierung und Vergütung am Scheideweg (Springer 2020) 6, 11-15.

[v] ‘Kurz erklärt: Darum geht es im Ärzte-Appell und so können Sie ihn unterstützen’ (stern.de, 1 October 2019) <www.stern.de/gesundheit/aerzte-appell-im-stern--rettet-die-medizin--8876008.html> accessed 5 January 2023.

[vi] ‘Deutsches Gesundheitssystem - Die Misere der Krankenhaus-Finanzierung über Fallpauschalen’ (Deutschlandfunk, 25 October 2021) <www.deutschlandfunk.de/deutsches-gesundheitssystem-die-misere-der-krankenhaus-100.html> accessed 6 February 2023.

[vii] ‘Lauterbach: „Wir haben die Balance zwischen Medizin und Ökonomie verloren“’ (Bundesministerium für Gesundheit (German Ministry for Health), 14 December 2022) <www.bundesgesundheitsministerium.de/presse/interviews/interview/krankenhausreform-diezeit-14-12-22.html> accessed 6 February 2023.

[viii] David Muschenich, ‘Experte zu Krankenhausreform: „Das Fallpauschalen-System bleibt“’ (taz.de, 7 December 2022) <https://taz.de/Experte-zu-Krankenhausreform/!5896807/> accessed 5 January 2023.

[ix] Dritte Stellungnahme und Empfehlung der Regierungskommission für eine moderne und bedarfsgerechte Krankenhausversorgung Grundlegende Reform der Krankenhausvergütung (Regierungskommission für eine moderne und bedarfsgerechte Krankenhausversorgung 2022)  <www.bundesgesundheitsministerium.de/fileadmin/Dateien/3_Downloads/K/Krankenhausreform/3te_Stellungnahme_Regierungskommission_Grundlegende_Reform_KH-Verguetung_6_Dez_2022_mit_Tab-anhang.pdf> 9.

[x] International Covenant on Economic, Social and Cultural Rights (adopted 16 December 1966) UNGA Res 2200A (XXI) Article 12.

[xi] General comment No. 3: The Nature of States Parties’ Obligations (14 December 1990) Committee on Economic, Social and Cultural Rights E/1991/23, para 9.

[xii] General comment No. 14: The right to the highest attainable Standard of Health (11 August 2000) Committee on Economic, Social and Cultural Rights E/C.12/2000/4 para 12.

[xiii] Ina Brzoska, ‘Operationen füllen Klinikkassen’ (n-tv.de, 26 April 2012) <www.n-tv.de/wissen/Operationen-fuellen-Klinikkassen-article6108251.html> accessed 5 January 2023.

[xiv] Birgit v. Criegern, ‘Die Krise im deutschen Gesundheitswesen heißt Fallpauschale’ (Heise.de, 28 May 2013) <www.heise.de/tp/features/Die-Krise-im-deutschen-Gesundheitswesen-heisst-Fallpauschale-3398982.html> accessed 5 January 2023.

[xv] Dr Günter Gerhardt, ‘Blutige Entlassungen: Die Akten haben entschieden’ (Medical Tribune, 1 December 2019) <www.medical-tribune.de/meinung-und-dialog/artikel/blutige-entlassungen-die-akten-haben-entschieden> accessed 5 January 2023.

[xvi] The source wishes to remain confidential but has worked in multiple German hospitals before.

[xvii] CESCR (n x) para 12(d).

[xviii] Helmut Laschet, ‘Das DRG-System vernachlässigt Qualität und Innovation’ (2021) 24(5) InFo Hämatologie + Onkologie 48.

[xix] Michael Simon (n ii) 205 & 209.

[xx] Jörg Blech, ‘Rückenschmerzen: Überflüssige OPs - Was wirklich gegen das Volksleiden hilft’ (DER SPIEGEL, 17 December 2022) <www.spiegel.de/wissenschaft/medizin/rueckenschmerzen-ueberfluessige-ops-was-wirklich-gegen-das-volksleiden-hilft-a-a790a0e3-a64d-48e9-bd13-a44e1460906f> accessed 5 January 2023.

[xxi] ‘Kostendruck bei Implantaten gefährdet Therapie’ (Deutsches Ärzteblatt (German Doctor News), 21 November 2019) <www.aerzteblatt.de/nachrichten/107610/Kostendruck-bei-Implantaten-gefaehrdet-Therapie> accessed 5 January 2023.

[xxii] ‘Ärztlicher Appell für weniger Ökonomie im Gesundheitswesen’ (Deutsches Ärzteblatt (German Doctor News), 5 September 2019) <www.aerzteblatt.de/nachrichten/105771/Aerztlicher-Appell-fuer-weniger-Oekonomie-im-Gesundheitswesen> accessed 5 January 2023.

[xxiii] General comment No. 24 (2017) on State obligations under the International Covenant on Economic, Social and Cultural Rights in the context of business activities (10 August 2017) Committee on Economic, Social and Cultural Rights E/C.12/GC/24 para 14, para 16.

[xxiv] Tobias Heimbach, ‘Prävention lohnt sich (nicht): Warum manche Krankenhäuser in der Pandemie an leeren Betten verzweifeln – und einige profitieren’ (Business Insider, 17 August 2020) <www.businessinsider.de/politik/deutschland/warum-manche-krankenhaeuser-in-der-pandemie-an-leeren-betten-verzweifeln-und-einige-profitieren/> accessed 5 January 2023.

[xxv] Convention on the Elimination of All Forms of Discrimination Against Women (adopted 18 December 1979, entered into force 3 September 1981) 1249 UNTS 13 (CEDAW) Article 11 (1)(f).

[xxvi] Convention on the Rights of the Child (adopted 20 November 1989) UNGA Res 44/25 (CRC) Article 24 (1) & (2)(d); For the health outcomes see Cain Polidano, Anna Zhu and Joel C Bornstein, ‘The relation between cesarean birth and child cognitive development’ (2017) 7(1) Scientific Reports  <http://dx.doi.org/10.1038/s41598-017-10831-y> accessed 5 January 2023, page 7f.

[xxvii] Michael Simon (n ii)  199-204.

[xxviii] Ibid 178.

[xxix] ‘FAQs Finanzierung Kinderkliniken’ (Deutsche Gesellschaft für Kinder- und Jugendmedizin e.V. (German Society for Child and Youth Medicine)) <www.dgkj.de/unsere-arbeit/politik/faqs-finanzierung-kinderkliniken> accessed 5 January 2023; Cordula Tutt, ‘Krankenhäuser: „In Kinderkliniken können nur noch 60 Prozent der Betten betrieben werden“’ (WirtschaftsWoche, 2 December 2022) <www.wiwo.de/politik/deutschland/krankenhaeuser-am-limit-das-system-der-fallpauschalen-funktioniert-bei-kindern-besonders-schlecht/28843720.html> accessed 5 January 2023.

[xxx] Ibid Deutsche Gesellschaft für Kinder- und Jugendmedizin.

[xxxi] Sabine Pusch, ‘Kinderkliniken: Droht der Kollaps?’ (BR | Bayerischer Rundfunk, 3 November 2022) www.br.de/br-fernsehen/sendungen/gesundheit/kinderklinik-reform-kinderkrankenhaus-100.html accessed 5 January 2023.

[xxxii] Convention on the Rights of the Child (n xxvi) Article 24 (2)(a) &(b)

[xxxiii] CESCR (n x) para 9, CESCR GC 14 (n xii) para 32.

[xxxiv] Klaus Weinert, ‘Von Fallpauschalen und DRGs’ (Deutschlandfunk, 27 May 2001) <www.deutschlandfunk.de/von-fallpauschalen-und-drgs-100.html> accessed 6 February 2023.

[xxxv] CESCR GC 3(n xi) para 9, CESCR GC 14 (n xii) para 32.

[xxxvi] ibid (n xii) para 43(a)&(e.

[xxxvii] ibid (n xii) para 48.

[xxxviii] ‘Mensch vor Profit: Ökonomisierung an deutschen Krankenhäusern abschaffen!’ (Change.org, 2019) <www.change.org/p/menschvorprofit-ökonomisierung-an-deutschen-krankenhäusern-abschaffen-jensspahn> accessed 7 February 2023.

[xxxix] ‘Krankenhausreform - Lauterbach: Es braucht eine neue Vergütungs- und Planungsstruktur’ (Bundesministerium für Gesundheit (BMG), 5 January 2023) <www.bundesgesundheitsministerium.de/ministerium/meldungen/krankenhausreform-4-sitzung-bund-laender-gruppe-fuer-die-krankenhausreform.html> accessed 7 February 2023.

[xl] Kalle Kunkel, ‘Die abgesagte Revolution’ (Rosa-Luxemburg-Stiftung, 30 January 2023) <www.rosalux.de/news/id/49896/die-abgesagte-revolution> accessed 3 March 2023.

[xli] Nadine Bader, ‘Pläne für Krankenhausreform: Das Ende der Fallpauschalen?’ (tagesschau.de, 6 December 2022) <www.tagesschau.de/inland/innenpolitik/fallpauschalen-lauterbach-101.html> accessed 5 January 2023.

[xlii] Bundesärztekammer, ‘Fallpauschalen dringend abschaffen Vorschlag zur Reform der Krankenhausvergütung ein erster richtiger Schritt’ (Bundesärztekammer, 7 December 2022) <www.bundesaerztekammer.de/presse/aktuelles/detail/fallpauschalen-dringend-abschaffen#:~:text=“%20Nicht%20nur%20die%20Vergütung%20der,,%20Hebammen%20oder%20Physiotherapeut:innen> accessed 7 February 2023.

[xliii] Bundesärztekammer, ‘Reinhardt: Wir brauchen ein neues Vergütungskonzept für Kinderstationen’ (Bundesärztekammer, 13 September 2022) <www.bundesaerztekammer.de/presse/aktuelles/detail/reinhardt-wir-brauchen-ein-neues-verguetungskonzept-fuer-kinderstationen> accessed 7 February 2023.