GERMANY: An Introduction to Healthcare
For more than 100 years, Germany’s healthcare system has been characterised by statutory health insurance. Nowadays, approximately 73 out of 83 million inhabitants are covered by statutory health insurance whereas only 10 million patients are privately insured. Germany’s yearly expenditure on health amounts to 390 billion euros. This corresponds to around 11% of GDP. The statutory health insurance funds spend approximately 220 billion euros a year on services for their insured. Hence, the statutory health insurance funds have an important impact on all stakeholders in the German life sciences business. This leads to a highly regulated healthcare system with a major emphasis on the cost-benefit ratio of services provided.
In addition to the density and quantity of regulation, healthcare is one of the most complex and rapidly changing regulatory branches. Since the beginning of the current legislation, with Jens Spahn taking the office of Minister of Health in mid 2017, an almost disruptive change in statutory health insurance is to be observed. Prior to the COVID-19 situation more than 30 major legislative amendments were triggered by the ministry. One focus has been the acceleration of digitalisation. The legislature provided the impulses necessary to catch up with the developments in other countries such as installing electronic health records and electronic prescriptions. The implemented regulations on the Digital Health Applications on a panel doctor’s prescription are a unique service that goes beyond catching up with other countries while being closely monitored by foreign markets.
The COVID-19 pandemic situation challenges all stakeholders and leads to constant actions by the legislature. Legislation focuses on handling the testing programs and treatment of persons suffering from COVID-19 as well as economic support for service providers which are severely hit by the implications of the pandemic.
In-patient and out-patient services are regulated by national laws. Public and private hospitals as well as out-patient service providers also have to follow regulations on state level and have to deal with local authorities.
All in all, legal advice for the healthcare industry has to cover many areas. This obviously includes legal know-how and expertise on healthcare regulation and extends to, inter alia, mergers and acquisitions, antitrust and competition, and public procurement as well as data protection.
Current Developments and Challenges for the Industry
The German healthcare industry offers interesting investment opportunities. Main targets for financial and strategic investors are in-patient medical care centres and nursing homes. This development is observed closely by the legislature and subject to steady assessment because there are concerns that the prospect of profits might outweigh the quality of the provision of care. Hence, legislative impediments constantly have to be foreseen and considered.
Digitalisation of service providers themselves and their means of communication with all stakeholders is a massive challenge for the healthcare sector. The legislature strongly emphasises this in their agenda and monitors the development closely so reactions can be on short notice and all parties need to be agile at all times. Hence, legal advice has to be focused not only on existing regulations but has to consider legislative activities as well.
Mail order pharmacies are constantly challenged by the representatives of stationary pharmacists and their attempts to jeopardise mail order business in general with legal actions and attempts to influence the legislature with the aim of prohibiting mail order sales.