Healthcare 2025: The Future is Connected and Regional
September 20, 2021
Dr. h. c. Helmut Hildebrandt | OptiMedis
Guest post by Dr. h. c. Helmut Hildebrandt, Chairman of the Board at OptiMedis AG
Integrated Healthcare in Germany has not developed as hoped. Admittedly, there are some successful projects which show that cooperation and integration with a focus on prevention, health promotion and maintenance, and digitalization lead to improved healthcare and increased efficiency. And the COVID-19 pandemic has also made it clear how important regional networking and efficient local structures are. Nevertheless, a nationwide implementation still seems to be a long way off.
A group of renowned experts from the healthcare sector wants to change this and has developed a comprehensive concept for “Innovative Healthcare Regions”. The aim is to establish sustainable, needs-based, robust and fair, integrated healthcare in a growing number of regions and – within a foreseeable period of time – as standard care for the whole of Germany. Since its publication in mid-2020, the concept has been the subject of intense debate, and at the same time, support for it is growing: More and more decision-makers in the healthcare sector are convinced that we need a new form of standard care and, with in light of the new legislative period, are calling for a strong political signal in the direction of regionalization of healthcare development and responsibility, as described, for example, in the election program of the German party Bündnis 90/Die Grünen.
“More” healthcare is rewarded
The focus of the concept is a business model that rewards the “production” of healthcare. Until now, financial resources in the German healthcare system have been distributed according to the cost recovery principle. However, it is well known in economics what incentives are provided by setting or negotiating prices on the basis of assumed or established costs: Service providers are given an incentive to increase the volume of services they provide and to form as large an alliance as possible in order to achieve economic advantages. In parallel, this gives them an incentive to minimize costs internally. This, in turn, is best accomplished by shorting the hours of expensive labor and by replacing it with the lowest-paid labor possible. The idea of so-called “regional budgets” is based on a reversal of the incentive system – away from “volume” and toward “value”.
There are already some regions within Germany where such models have been implemented. For example, Gesundes Kinzigtal GmbH, which was launched in 2005, has taken on a “virtual budget co-responsibility” for those insured by health insurance company AOK Baden-Wurttemberg and the Social Insurance for Agriculture, Forestry and Horticulture (SVLFG) in the Kinzigtal as an integrator. The company is rewarded if the costs of the insured of both health insurance companies develop positively for all sectors of care compared to the national average. It then receives a bonus as a share of the profit achieved by the health insurance funds. Physicians are free to decide whether they want to participate in the model. They will, in any case, continue to be remunerated via the Association of Statutory Health Insurance Physicians. They also receive additional remuneration from Gesundes Kinzigtal GmbH.
In this model, the integrator – in this case Gesundes Kinzigtal GmbH – is interested in keeping the population in the region as healthy as possible, or in treating diseases on an outpatient basis where possible. On the other hand, if a patient is in need of inpatient care, the integrator has an interest in having him or her treated as efficiently as possible in the most suitable hospital. Similar models are being implemented in the “Healthy Werra-Meißner District” and the “Healthy Schwalm-Eder District+” and served as a model for the authors of the concept for “Innovative Health Regions”.
Regional integration units conclude contracts with health insurers
According to the concept, “innovative healthcare regions” are counties or urban districts where there is a separate contract between ideally all health insurers (including private health insurers) and a local company responsible for healthcare, the so-called “regional integration unit,” which can be founded by local actors. The population size of each region should be between 100,000 and 200,000 to ensure that care remains easily manageable.
The “regional integration units” should support the population in the best possible way in maintaining healthcare in cooperation with local health actors. They ought to connect healthcare and integrate players so well that the population is in good hands in the event of illness. Whenever there are digital applications or supraregional care structures that demonstrably lead to better results, however, these should be given preference. The Regional Integration Units will be economically rewarded for the result, i.e., for the generated healthcare benefit – and not for the number of services as the service providers in today’s healthcare system.
The establishment of the “Regional Integration Units” is initiated by regional healthcare conferences with the participation of the population or also by the democratically elected bodies. In addition, they should be accountable to them and to health insurers. Regional integration contracts regulate accountability and remuneration based on success. These also define the form of start-up financing via a “Future Fund for Innovative Health Regions” and the subsequent mandatory reimbursement.
The core elements of the concept at a glance
- Regional, professionally set-up healthcare conferences take on a key role with the respective counties or independent cities: They obtain regional health data for healthcare planning and initiate contracts between Regional Integration Units and health insurance companies.
- The Regional Integration Units conclude contracts with the health insurance for the management of prevention, treatment and rehabilitation onsite according to a predefined contract model. Compensation is tied to health outcomes; it is measured by the relative reduction in cost growth in the region and by quality metrics.
- Integration units receive start-up financing as a transitory item from the health insurance funds out of a “Future Fund for Innovative Health Regions” which is established specifically for this purpose. It is repaid from the 11th year onward. Similar to government bonds, this future fund enables private investors to invest in increasing the efficiency of the healthcare system, thus providing for the years from 2035 onwards.
- Nationwide monitoring makes the results transparent and leads to competition between regions and health insurers for the best local healthcare.
- Both patients and stakeholders are free to participate in the integrated healthcare solutions.
This reversal of the healthcare business model has numerous advantages:
- For the local municipalities and districts, the Regional Integration Unit will support the Public Health Service in prevention and health promotion out of its own interest.
- The local companies, i.e. employers as well as employees, have a partner for company healthcare management in the integration unit.
- Contribution rates for health insurance funds can be stabilized or, at least in the longer term, will not increase to the extent that would otherwise be expected under current conditions.
- Innovations – whether from the digital, medical technology or pharmaceutical sectors – will find their way into healthcare via the Regional Integration Units if they contribute to the health benefits of the population.
- Care is secured for the people of the region to a greater extent than before. The integrator will ensure good local care out of its own interest, since high costs for possible emergency physician missions would indirectly be at its expense.
The crucial role of the region
The idea of “re-regionalizing” responsibilities for health and healthcare may sound like a step backward to some. However, we do not want to return to the old power structures or give up the advantages of centralization. On the contrary, we advocate making the best possible use of digitalization while at the same time compensating for the disadvantages of centralization – including the experience of increasing powerlessness at the local level and an over-bureaucratization of decision-making processes to the point where federal legislation takes over micromanagement as a substitute – by making additional use of the possibilities of regional self-governance and entrepreneurial self-determination. Agile management can only be developed at a manageable level, and no central body needs to decide whether a local sports club receives a financial grant for a special offer for the very elderly. Or how a digital innovation, for example in Eschwege, optimizes care and how it is financed.
Target: Ten percent of care delivered via health regions in 2025
The proposal of the author group requires significant changes in federal and state legislation. And it would significantly change the healthcare system in Germany. But we see it as a real opportunity – toward sustainable, needs-based, robust and at the same time fair, integrated healthcare in a growing number of regions and – in a foreseeable time – as standard care for all of Germany. To start, we propose a target: Ten percent of the population should be able to enjoy care according to the “healthcare regions” model in 2025.
For further discussion, a discussion platform has been set up on Linkedin (in German language): www.linkedin.com/groups/9029235.
Editor’s volume “Future of Healthcare” on the topic
The complete book on the concept “Integrated Care – Now”, which was previously published in the magazine “Welt der Krankenversicherung” (WdK), is available via this link (in German language).
In August, medhochzwei Verlag published the volume “Zukunft Gesundheit – regional, vernetzt, patientenorientiert” (Future of Healthcare – Regional, Connected, Patient-centric), which is available via this link (in German language). It contains the concept on “Innovative Health Regions” and summarizes the current discussion on the future of healthcare. Renowned authors have contributed their expertise on important issues.