Using disease management and market reforms to address the adverse economic effects of drug budgets and price and reimbursement regulations in Germany.
OBJECTIVE
Germany spends the highest share (10.4%) of its gross domestic product on health care among European Union countries. The majority of this financing comes from an earmarked tax on labor earnings. Drug spending, as a share (12.7%), is relatively low, as is per-capita drug spending. Over the past decade, a number of specific budgeting initiatives were introduced to control drug spending-with some success, at least until the 11% increase in the first 6 months of 2001.


METHODS
This article describes and analyzes these governmental initiatives as well as other market reforms.


RESULTS
Germany has had a "drug budget silo mentality" throughout this period. But the focus of the mentality moved rapidly from the central budget to regional budgets and to drug budgets per physician based on historical data. These amounts do not correspond to either medical necessity or economic considerations. An analysis of the health-care system as a whole shows that the efforts to constrain spending with budget in one area can lead to higher total costs. This article also considers the impact of introducing other actual or proposed reforms such as a positive list to replace the negative list, generic substitution, retail price competition among pharmacies, and E-health commerce. There is also a new national institute constructing a database of information on health technology assessments.


CONCLUSIONS
To overcome the strong segmentation of the health system in physician, drug, and hospital budgets, we recommend using this information from proper cost-effectiveness evaluations to develop clear guidelines for disease management programs, reinforced by appropriate financial incentives.
Schwermann
Tim
T
Center of Health Economics and Health System Research, University of Hannover, Hannover, Germany.
Greiner
Wolfgang
W
v d Schulenburg
J M Graf
JM
D002017:Budgets; D003363:Cost Control; D003362:Cost-Benefit Analysis; D019468:Disease Management; D016527:Drug Costs / Q000639:trends; D004363:Drug Utilization / Q000191:economics*; D017850:Economics, Pharmaceutical; D005858:Germany; D006264:Health Benefit Plans, Employee / Q000331:legislation & jurisprudence / Q000458:organization & administration; D018166:Health Care Reform / Q000331:legislation & jurisprudence*; D019981:Health Care Sector / Q000331:legislation & jurisprudence; D005102:Health Expenditures / Q000639:trends; D006801:Humans; D007356:Insurance, Pharmaceutical Services / Q000331:legislation & jurisprudence; D009313:National Health Programs / Q000191:economics* / Q000331:legislation & jurisprudence; D012040:Regional Health Planning / Q000191:economics; D013673:Technology Assessment, Biomedical