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Commentary on Digitization of the German Healthcare System

“A new three-pronged framework for the digital world”

(Originally published in Market Access & Health Policy Issue 05/2017. Download the original article in German here.)

The digitization of our lives does not stop when it comes to our health. However, the framework conditions around healthcare in Germany are extremely unfavorable in comparison to our European neighbors. Our healthcare policy is lagging behind: regulations are out-of-date, data protection requirements are excessive, and sustainable investments into healthcare innovation are proving hard to find.

Communication between the “patient” and the “system” is shaped by an old-fashioned framework. The ban on telemedicine and the debate on a ban of the mail-order prescription drug market are just two examples. And this occurs in a world where “Doctor Google” is now part of standard care elsewhere − or where the family doctor can at least use Skype to make a diagnosis and write a prescription.

Further fiercely contested sectors such as the authorization right in the outpatient sector and the prohibition right in the inpatient sector, are issues that we haven’t really made progress on recently.

A recent survey by McKinsey also corroborates the deficits in the hospital market when it comes to digitization, finding that German hospitals had a tremendous amount of ground to make up. Three out of five hospitals so far are lacking a digitization strategy. The vast majority of directors (85%) describe the progress and quality of digitization at their own facilities as inadequate.

Resistance is coming from all fronts, including a latent “digital aversion” in the German medical profession on the one hand, and legislative ignorance when it comes to the German medical market on the other. Compounding the problem is that in spite of all of counterarguments, our current telematics structure does not provide for the integration of apps into our system. Here, too, politicians ought to provide impetus for change.

All of this results in innovation struggling to make it into the system. And even if it was possible to overcome the kind of aforementioned resistance, innovation usually ends up failing in the end due to formal processes. The Federal Joint Committee has certainly acknowledged the situation, but whether or how the committee can (or wants to) counteract this is still entirely open.

 

 

One thing is clear: digitization will not be stopped by the German health system.

But where are the new, fresh ideas for tomorrow´s healthcare supposed to come from? The answer is simple: not from the stakeholders involved, but from up to 90 per cent of the start-up scene.

The problem with this is that while the rules for establishing a start-up in the US, for example, are clear from the outset − because the FDA acts as both the authorizing and regulatory authority for start-ups − we are lacking criteria for authorization as well as compensation. The German start-up scene is therefore suffering from a clearly diagnosed case of non-regulation, which is why lawmakers must act quickly. Germany needs a new three-pronged approach to the digital world: quality, authorization, and compensation. Or, to use the market idiom: there is a need for a digital AMNOG process. It is the only way that we will be able to spark innovation for our market once again.

Various calls to action from lawmakers, are at least providing some initial signs of hope, such as the list of demands put forward by Brigitte Zypries, who -at present- is still the Federal Minister for Economic Affairs and Energy. As early as January 2014 she was making a case for the digital future of the healthcare sector. Going hand-in-hand with this is the call from the young digital economy to create virtual practices.

But it is here where this undeniably innovative approach is confronted with the healthcare system’s established structures. This collision with reality raises the stakeholder-driven question: If one imagines the future of virtual practices, what would happen with the service guarantee of doctors and pharmacists? Or perhaps one should approach this future-oriented issue from a societal perspective and ask: To what extent is the service guarantee in its current form still feasible given our demographic development? And wouldn’t such structures and processes be optimized much more easily by means of digital applications? Where can digital applications support risk management, quality management and knowledge management?

 

Enquiry into this should begin as an open-ended debate, to borrow politicians’ favorite expression.

This also means that the lawmakers in the end can and may very well conclude that the established structures can remain in place as they are − but only if they have discussed and demonstrated that this should be the case.

The debate on the ban of the mail-order prescription drug trade is unfortunately just one example out of many where a single stakeholder − in this case, pharmacists taken as a whole − throws its weight around. This raises the completely open-ended question: Why can’t there be a mix of virtual practices and a digital pharmacy solution for structurally weak regions? In those places where locally available medical care for many patients, especially elderly ones, in rural areas has already virtually become a Fata Morgana, it would be downright negligent not to take advantage of the opportunities that digitization offers!

We need innovation like this in the healthcare market. But, we should also be aware that the start-ups don’t necessarily need Germany to realize their plans and achieve success.

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