Embattled German coalition debates health reform (News Feature)

By Jean-Baptiste Piggin Jun 18, 2010, 16:54 GMT

Berlin - Whether it is killer viruses, drug lobbyists or tenacious old people, there is no shortage of perceived villains when nations like Germany struggle to save universal health care.

Key aides to Chancellor Angela Merkel agonized at two days of talks in Berlin starting Friday over how to eke out the available money or whether to increase the levy on German salaries that pays for the German health system.

But experts on the economics of health care say the Merkel government is shirking the bigger question that also slipped by US President Barack Obama: how to lower the bill for treatment.

As a rich country, Germany can easily fight off something like one dangerous virus. When H1N1 swine-flu arrived last year, the German states swiftly launched a free-vaccination programme that cost 283 million euros (345 million dollars).

The programme proved a fiasco, with only 7 per cent of Germans lining up for their jabs. Millions of doses remain unused.

That reinforced a perception that waste is rife in healthcare.

About 90 per cent of Germans buy health insurance from state-supervised funds. Roesler officials say the funds face a deficit of 11 billion euros next year as costs race ahead of their income.

Reports of waste have increased pressure on German Health Minister Philipp Roesler, a 37-year-old eye doctor who came to office last year with promises of reform, to reduce spending before he tries to increase the premiums Germans pay into the regulated system.

As the talks began at his office, Roesler said 'there will be no taboos' when it comes to cutting unnecessary costs.

Little has come of Roesler's call in March this year to end the power of pharmaceuticals companies to set their own prices for patented drugs. Some media, like the newspaper Handelsblatt on Friday, say he was stalemated by pharmaceutical industry lobbyists,

Others say he has been sidetracked by the party infighting that has strained Merkel's coalition.

As he went into the Berlin talks, Roesler, who belongs to the Free Democratic Party, was mainly hoping for an alteration in the levy system. He proposes that all wage-earners pay a minimum base rate, plus a surcharge based on incomes.

Analysts say this would mean a hike in contributions for many of the customers compared to the levies they pay at the moment.

The Bavaria-only Christian Social Union (CSU) adamantly opposes levy changes, contending that savings are the priority.

Peter Sawicki, who is about to retire from his post at the government-backed Institute for Quality and Efficiency in Health Care (IQWiG) in Cologne, broadly agrees with that criticism.

'We have to stop throwing our money out the window before we talk about raising more money,' he told the German Press Agency dpa in a telephone interview.

He said a core problem in the German system was over-supply, with doctors prescribing drugs of doubtful medical benefit or duplicating one another's diagnostic tests on the same patient.

'Near my office, there are 10 pharmacies within walking distance, but only two petrol stations,' he said, giving another example.

The inter-party dispute, with Merkel's Christian Democratic Union (CDU) holding the centre ground, has become increasingly bitter.

The rancour, the insults and the weakening in Merkel's authority from the continued stalemate have led some to compare the dispute to the US debate on health insurance which tied up the Obama administration for weeks earlier this year.

CDU health expert Jens Spahn warned as the Berlin talks began: 'This is our last shot.'

Fritz Beske, who heads a health think tank in the city of Kiel, says Germans are still avoiding an uncomfortable truth: that public systems providing for the poor will soon have to ration care.

'It's demographic,' he said in an interview. In the next four decades, the number of working-age Germans paying into insurance schemes will sink from 50 million to 36 million. Combine that with the blessing of longer lives.

'Of every 100 newborn girls today, 50 will live to at least 100,' he forecast.

Caring for the elderly, many of whom develop multiple chronic health problems, is the most expensive part of health care. Beske argues that public systems will have to refuse some very expensive therapies to people who no longer have very long to live.

'Nowadays we first figure out what we need, and then find the money to pay for it,' he said.

'In future we will have to do the exact opposite. A certain sum of money will be available to the system, and we'll have to figure out how to meet all the needs fairly.'