TCS Daily

Doctors Against Patients

By Jan Burdinski - April 4, 2006 12:00 AM

BERLIN -- When German chancellor Angela Merkel took office in November last year, she did so with a promise to improve the struggling German economy by introducing much-needed market reforms. During last year's election campaign, many observers compared Merkel to Margaret Thatcher and predicted a German version of the Iron Lady's reforms of the British economy in the early 1980s.

So far, however, Merkel's policies look more like those of Gordon Brown, the U.K. Chancellor of the Exchequer whom Martin Wolf of the Financial Times recently likened to a Soviet tractor factory manager.

After years of slow growth, Merkel's government has decided to raise the value-added tax from 16% to 19% by January 1, 2007 -- hardly the most efficient measure to restore consumer spending. At the same time, Merkel's Social Democrat coalition partners are blocking much-needed reforms of the overregulated German labor market.

This week in Berlin, the government will be advocating a series of health care reforms similar to Gordon Brown's unsuccessful and over-bureaucratic attempts to reform the UK National Health Service.

One of the more draconian proposals is a "bonus malus" penalty system for doctors who prescribe too many expensive drugs to German patients. This new system is designed cut public expenditures for prescription drugs by making physicians personally liable if they exceed their quarterly budgets. For instance, physicians will have to cover 50% of the excess spending out of their own pocket if they exceed their budgets by more than 30%.

At first glance, making anyone stick to a budget may sound like sound financial policy. The problem is that in this case the budget does not necessarily reflect real world demand. The allocation of funds for medicine is not driven by patients and doctors but by politicians - much like the production targets for Soviet tractor factories were set by bureaucrats in Moscow with little regard to the needs of Russian and Ukrainian farmers.

Germany will be on its way to a shortage of medicine if the government gets its way. The government's goal is to reduce the annual pharmaceutical costs by 400 million euros starting in 2007, and German patients are already receiving too little medicine. For example, only 30% of Germans with osteoporosis receive treatment, and the German sick funds do not cover preventive medicine for osteoporosis patients. This means that middle aged and elderly women with osteoporosis often have to experience a debilitating hip or other bone fracture before they receive the medicine they need.

A shortage of medicine means that patients will no longer be able to trust doctors to prescribe them the medicine they need. The medical needs of the individual patient will take second place to the budgetary considerations of the doctor.

One possible consequence is that patients will be inclined to exaggerate the symptoms they have in order to move up on the doctor's list of priorities; and doctors will tend to dismiss more patients as hypochondriacs. These diverging interests will lead to distrust between patients and their doctors and undermine the open doctor-patient dialogue that is required for early detection of health problems and successful treatment.

The lower use of drugs and the worsened doctor-patient relationship could end up costing the German economy more than the 400 million euros the government hopes to save. Without the right medicine, patients are more likely to spend time in expensive hospital care and to be absent from work due to health problems. Add the time and resources that will be wasted on legal expenses and handling objections from doctors and patients, and it becomes evident that managing German health care like a Soviet tractor factory is not very cost-efficient.

In addition, there are long-term costs to consider. Germany has more medical students per capita than any other European country. What will these future doctors think about working in a system that penalizes them for doing the job they have been trained for, namely curing patients? Providing second class care to patients and being denied access to the latest advances in medical research is hardly a very encouraging prospect. Chances are that the best and brightest of Germany's future physicians will add to the brain drain and join the 400,000 European researchers that currently live in the United States.

When the brains leave, so do the prospects for investments in research and development. Without such investments, Germany will have to rely on old economy products based on heavy industry. Again, the Soviet tractor factory comes to mind.

The author is Founder and director of the Institute for Political Analysis and Strategy in Berlin.


1 Comment

Gotta problem? We got a pill...
Maybe they realize that the doctors will dispense an essentially unlimited amount of drugs without regard to the costs to society. These costs translate into lost life in other parts of the country and the world. You can spend huge amounts of resources to extend the lives of people near the end of theirs. And so many of these drugs are lifestyle drugs: "I could stop eating bratwurst every day, or just take a pill and keep piling on the colesterol." The real values in public health are created by education and engineering- health information, clean water, public sanitation, etc...

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