Challenges for the German Healthcare System in the COVID-19 Pandemic and Beyond
Christine Arentz is a Professor for (Health) Economics at the Institute for Insurance Studies (ivwKöln) at TH Köln – University of Applied Sciences (Cologne, Germany).
Her professional experience includes four years of working as a Senior Economist and Project Manager at the Scientific Institute of the Private Health Insurance (WIP) in Cologne, Germany, where she managed research projects in International Health Care System Comparisons, (German) Health Policy and Long-term Care.
She holds a PhD in Economics and completed her thesis at the Institute of Economic Policy at the University of Cologne (Germany), where she worked as a researcher, lecturer, and policy advisor. In the earlier stages of her career, she worked as a credit analyst in international real estate, as well as a research assistant both at the United Nations Economic Commission for Europe (UNECE) and the German Central Bank.
Ines Läufer works as a systemic organizational consultant, specializing in the public sector. Starting in October 2021, she will work as in-house consultant for the association of municipalities in North Rhine-Westphalia.
She holds a PhD in economics and completed her dissertation at the Institute for Economic Policy at the University of Cologne, where she worked as a researcher, lecturer and policy advisor.
In 2013, she spent three months as a fellow at AICGS, where she conducted research on "Accessibility and Efficiency of Private Health Insurance in the United States and Germany."
After completing her PhD, she worked as an economist at the German Federal Ministry of Health for nearly three years before turning her attention to organizational change and workplace cultures in the public sector as a key issue of good policy.
The COVID-19 pandemic has thrown a spotlight on two major weaknesses of the German healthcare system: First, the glaring lack of digitization, leading to a lack of data and prevention possibilities (such as warning particularly vulnerable groups). Second, the critical working conditions for skilled nursing staff and the resulting unattractiveness of the job. Although Germany compares favorably with other countries in terms of staff density and hospital bed endowment (including intensive care beds), the workload per nursing staff is significantly higher than in other countries; by international comparison, a disproportionally high number of treatments take place in the inpatient instead of the outpatient sector, leading to a high workload for hospital staff.
In the following, we will describe these problems and outline their interaction and causes. Building on this, we discuss if the pandemic can serve as an accelerator of digitization and thereby possibly also reduce workload for hospital staff.
Causes of the German healthcare system’s weaknesses in digitization
Even before the COVID-19 pandemic, the German healthcare system was known for its low level of digitization by international standards. While the inadequate technical equipment of the local health authorities became clearly visible to the public especially in the pandemic, the low digital data infrastructure in clinics was already known before the pandemic as an untapped potential for improving the quality of care (see next section).
During the pandemic, both areas came (again) into public focus. Due to the lack of any central digital information system on overall hospital bed availability and occupancy, no hospital capacity planning was possible at the beginning of the pandemic. Thus, a reliable assessment of the situation with regard to the danger of overstretching the healthcare system was not possible. Therefore, on its own initiative, the German Interdisciplinary Association for Emergency and Intensive Care Medicine (2020), quickly established a registry on intensive care bed occupancy, which was able to provide data on available intensive care beds and ventilation capacities as of mid-April 2020.
Second, the local health authorities responsible for tracking infections and informing contact persons also lacked the digital infrastructure needed for these tasks. Most data exchanges between the health authorities were fax-based. This led to significant time delays and work overload in the health authorities, some of which had to be supported by the federal armed forces in order to be able to trace infection chains. Furthermore, the local health authorities lacked data on risk groups and the socioeconomic structure of reported cases—this stood in the way of a differentiated, targeted prevention and information campaign. It was not until late in the pandemic that it became clear that socioeconomically disadvantaged groups were particularly affected by infections and in many cases were in intensive care. On March 22, 2021, the Fraunhofer Institute for Intelligent Analysis and Information System (IAIS) published analyses of age-specific, geographic, and socioeconomic correlations in the spread of COVID-19 for the first time. A targeted prevention campaign would have been possible by specifically addressing these groups.
Why is the German healthcare system so under-digitized by international standards? There is little doubt that digitization could increase the quality of care and reduce underuse, overuse, and misuse of care. However, there are a number of challenges in the practical rollout in terms of coordination, alignment, and cost-bearing.
Due to the lack of any central digital information system on overall hospital bed availability and occupancy, no hospital capacity planning was possible at the beginning of the pandemic.
The causes of the low level of digitization can be traced primarily to the regulatory structures since the federal structures in Germany imply that responsibilities and funding are distributed among different political levels. This hampers the coordination needed when building a digital infrastructure and ensuring interoperability of software.
The German healthcare system is known for its complexity: While the federal government, led by the Federal Ministry of Health, sets the legal framework for the players in the health care system, the responsibility of the states extends primarily to inpatient care (e.g., hospital planning) and the public health service. In addition, there is the self-administration of payers and service providers, which set the standards in many areas through an institutionalized process of negotiation among all actors. The strong fragmentation of care, which is a consequence of the different responsibilities, also means that an overarching, holistic establishment of digital infrastructure has not yet been possible to the necessary extent.
In the area of local health authorities, the financially responsible federal states have neglected the staffing and material equipment for years, which turned out to be a major problem in the pandemic. Furthermore, data protection regulation adds to the costs of digitization by tightening the legal requirements for the introduction of digital products and data exchange between health care providers.
The causes of the low level of digitization can be traced primarily to the regulatory structures since responsibilities and funding are distributed among different political levels.
In general, it can be expected that the crisis has increased the attention paid to the public health service and that the federal states have a greater interest in better equipping health authorities. Making up for decades of omissions in a crisis is inherently difficult. Nevertheless, the pandemic has proven to be an accelerant. Many local health authorities have been better equipped technically to enable digital contact tracing and data exchange with other local health authorities.
In the hospital sector, hospital occupancy registers have been introduced, and there is now also a vaccination register. Neither is perfect in terms of data quality, but at least the crisis has shown that it is possible to set up such registers in a relatively short time.
However, the implementation of greater digitization in the healthcare system requires a number of preconditions: In order to ensure that the data can be used by all players (interoperability), there must be legal (central) requirements that ensure connectivity and a data protection law that does not inhibit innovation and data exchange for better medical care. In turn, the development of a digital infrastructure is an investment for the individual players, the financing of which must be ensured by the responsible government level. This has not been guaranteed in recent decades.
Critical working conditions for nursing personnel in the German health care system
In addition to the lack of digitization, or as will be shown, linked to it, is the work overload for nursing staff, which is sometimes also seen as a problem of staff shortage. But the notion of staff shortage falls short: Germany ranks third in Europe in terms of staff density (nursing staff per inhabitant). The problem is that Germany simultaneously has the fewest nursing staff per inpatient case next to Hungary. Thus, German nurses (and similarly doctors) are under a very high workload.
There are several reasons for this. For one thing, Germany has lacked coordinated hospital planning for decades—the hospital structure was therefore not aligned to future care needs. Responsibility for hospital planning lies with the federal states, as does responsibility for financing investment costs. Operating costs, on the other hand, are borne by the health insurance funds. Since no coordinated plans have been drawn up in recent decades as to what an efficient hospital landscape might look like, the result is that Germany has a very large number of hospitals, many of which operate uneconomically simply because of their small size, but which are not closed for political reasons. The clinics can decide for themselves which treatments they offer, regardless of whether they are specialized in the respective treatments. As a result, treatments also take place in clinics that do not perform them regularly due to low case numbers. This can lead to poorer treatment outcomes because staff lack routine. In addition, more specialized professionals are needed overall than would be the case if certain treatments were concentrated in fewer hospitals. Specialization could lead to more efficient and higher-quality care, which would also result in less work for nursing staff due to more routine treatment processes and fewer patients per nurse.
Efficient workforce planning within hospitals is again dependent on the degree of digitization.
At the same time, in recent decades the German federal states have increasingly failed to meet their obligation to provide existing hospitals with sufficient investment funding. For years, investment funding has covered only about half of the required investments each year. This has put hospitals under considerable financial pressure so that they have increasingly financed the funds they need from operating costs, i.e. via so-called DRG financing, which the health insurance funds provide. Hospitals therefore had and still have an incentive to perform as many treatments as possible in order to finance the required investments from the treatment revenues. Accordingly, the number of treatments rose by 15.4 percent between 2000 and 2017, without this being explained by demographic factors or increased morbidity. These incentives lead to unnecessary treatments (overuse/misuse) and a high workload for caregivers. Especially because hospitals can generate positive contribution margins if they use more treatments but fewer nursing staff for them. Policymakers have responded to these developments by introducing nursing staff floors for certain areas and this is to be expanded in the coming years.
The inadequate funding of investment also means that hospitals have a reduced incentive to make costly investments in improving work processes and digitized care processes. Even if these could allow a reduction in costs in the medium term, the lack of investment cost financing inhibits these investments.
However, efficient workforce planning within hospitals is again dependent on the degree of digitization. This is another area that reveals the digitization gap that is generally evident in Germany. For meaningful staff planning, the patient data with their different treatment needs would have to be digitally recorded in the hospitals in order to be able to deploy the staff according to the needs. An electronic patient file would be helpful for this, but its implementation has been delayed in Germany for years. In many hospitals, the corresponding data on patients is managed completely independently of the respective personnel planning and documentation of staffing levels. In addition, the management of documentation is often still predominantly non-digital, which makes the linking of data sets considerably more difficult.
Without a fundamental reform in hospital structures and a shift from inpatient to outpatient care, the problem of work overload for hospital staff is likely to remain.
The lack of digitization in German hospitals therefore also leads to misguided and inadequate workforce planning. The backlog that Germany has in the area of digitization is also clear in international comparisons .  Here, Germany scores well below average, both in terms of the EU average compared to the United States. The United States has a score of 5.3, while Germany only has a score of 2.3 (EU: 3.6).
The healthcare system in Germany must therefore be digitized at an accelerated pace in order to improve patient care in post-pandemic times. This is particularly important because even if working conditions are improved, the burden on nursing staff is unlikely to lessen given the demographic shifts with fewer and fewer young workers and the simultaneous significant increase in older people, which will lead to a further increase in the need for treatment.
Although the established parties are all committed to the need to modernize the German digital infrastructure, the problem of different levels of responsibility in the federal system remains. Without a fundamental reform in hospital structures and a shift from inpatient to outpatient care, the problem of work overload for hospital staff is likely to remain.
However, there is reason to be optimistic that the pandemic will lead to a surge in digitization in local health authorities and hospitals and will perhaps even lead to more intensive digitization if the framework conditions are set accordingly. As outlined above, increased digitization of hospitals could also lead to better staff planning and thus relieve the workload of nursing staff, which in turn could increase the attractiveness of the profession and improve patient care.
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This article is part of the AGI project “The Importance of the Transatlantic Partnership in Times of Global Crises” and is generously funded by the European Recovery Program (ERP) of the Federal Ministry for Economic Affairs and Climate Action (BMWK).