Conclusion and Developments in Health Care in Germany

Developments such as the introduction of HCCs impose a significant change of the market conditions and can have a severe impact on classically owner-run practices. These suddenly face unknown and unforeseen challenges ²²³. Thus, the whole field of HC became more complex and practices as much as HCCs are “complex economical entities. For their leadership it is required to be doctor and entrepreneur at a time.” ²²⁴. In specialized IT-literature about business modelling this market is called highly complex and thus requires very specific business architecture for HCCs in order to reach the company goals formulated for this volatile market ²²⁵. With the growth of business thinking and business administration in this market, HCCs definitely are a “business model of the future” ²²⁶. With the legal changes that were introduced in recent years, hospitals now, form part of the beforehand less competitive field of outpatient care, that used to be exclusively served to by contracted doctors. However, it is to be mentioned that patient behaviour is changing. For several years the quantity of outpatient treatments is growing. This, however, not only since care possibilities have improved, but also, because patients treat their own health in a different manner – and since precaution care simply has grown in importance – is making hospital care as a consequence less likely ²²⁷. And it is not only via HCCs that hospitals in Germany can now serve the outpatient care market. Hospitals can make contracts with HC carriers and thus can – to some extent – provide ambulatory care within the hospital. This possibility does not require the hospital to go through an application procedure, whereas, practitioners still have to successfully complete a complex application for contractual practice locations. The selection procedure, however, was softened (see Freedom of Establishment). In fact there also is a significant number of business advice books existing for hospital managers, suggesting them to economically explore the market of outpatient care and develop the business that way ²²⁸.

223 S. Kock, 2012, p. 115

224 Schreiber, 2015, p. 7

225 Pütz et al., 2018, p. 43

226 Renger et al., 2016, p. 10

227 Iserloh & Kehr, 2016, pp. 211–217

228 e.g. Lohmann, 2016, p. v

Financing Challenges in Health Care

One major reason for the introduction of these changes is, that HC is facing significant financing problems. Medical developments are growing in complexity and thus also in price

229. The government has to significantly re-evaluate the costs and pricing in the HCS, in order to assure adequate treatment for all citizens. Research showed that venture capital – under a range of limitations – may eventually be a way of approaching the financing issues the medical sector is facing ²³⁰. This, however, stands in contrast to the intentions to keep investors out of the market with laws such as the GKV-VStG (see page 30 for details). All attempts honoured, the initial investment at the opening of a clinic for a doctor, that just is starting, has grown significantly, since the number and complexity, thus, consequently price of treatment devices, that are required to treat today’s well-informed patient, has grown. This rising sum of investment imposes an increasing entrance barrier for medical practitioners. HC expenses and thus revenues of HC providers are expected to grow further in upcoming years – in some areas such as Berlin and its surroundings, growth is also expected since medical tourism is a topic of significantly growing importance ²³¹.

Health Care Open to Investors

New legal developments have also opened ambulant HC provision to large scale investors without a medical background – a trend that can also be seen in the particularly profitable market of dental care ²³². Such investors wishing the ambulant medical care market may make use of either a hospital or a non-medical kidney dialysis care centre, as a mean to enter the market and open HCCs ²³³. Structure-wise an HCC can be run economically but is required to have a medical director ²³⁴. This director, though, is – in medical questions – not subordinated to the economic management of the centre. The medical director is fully responsible for any medical decisions of doctors in the centre. However, he may hand over responsibilities for medical specialist areas to other specific specialist doctors and as such can delegate responsibility, if the size of the centre requires such action. Via hospital or dialytic

229 F. Fischer, 2003, p. 87f.

230 F. Fischer, 2003, pp. 27–31

231 Tomenendal et al., 2018, p. 15

232 Wolf, 2018

233 Theurer, 2017

234 Rödder & Schütte, 2013, p. 13

care centre possession HCCs are very attractive to large scale investors, given the margins in HC and OHC in Germany. The Colosseum Dental group – a 100% daughter of Jacobs coffee, an international coffee brand – that overall employs about 1000 dentists in 7 countries and is entering the German market with an additional subsidiary, is only one example of many players that are currently hunting for market share in this lucrative industry ²³⁵.

Developments in the Market

Market investigations have shown, that in Germany, the provision of healthcare in the countryside is significantly declining and even leading to a care supply shortage ²³⁶. Thus, alternative solutions for countryside HC – especially ambulant care – are of utmost importance to the German government. The continuous and growing support of the creation of multi-clinician-practices also in the form of HCCs is one such action ²³⁷. Research about origins and reforms of the German HCS, as much as about rights of practitioners in the German system has shown that over recent years the system has significantly been liberalized. Whereas medical practitioners used to be a very protected group of professionals providing their services as professional freelancers in their own practice, there is a significant development towards handling the provision of care under more commercial and economical viewpoints.

The growing rights of practitioners on the one hand simplifies the specialist’s work, however, also significantly reduces the barriers of market entry for other players and thus potential competition. Since hospitals are growing, their share in the outpatient market ²³⁸, it becomes more and more of an option to practitioners, that are trying to find a successor, to sell their practice to a hospital which can then integrate the practice in the hospital’s HCC structure.

Looking at Germany, there is all, but a lack of practitioners, let it be in general HC or OHC. Facts show, that the HC market is evolving and changing rapidly. The country – due to the systematic changes summarized in section 3.1.5 – is moving towards liberalized outpatient care and so the way especially ambulant care is delivered is transforming and will continue to significantly alter in upcoming years. A growing amount of administration is reducing the quantity of time practitioners can care for their patients in owner-run practices. Larger systems may employ backend structures to handle at least some of the administrative

235 Wolf, 2018

236 Dostal et al., 2018, p. 90

237 Jahnke et al., 2018, p. 7

238 Iserloh & Kehr, 2016, p. 218

requirements. That in combination with the increasing number of doctors demanding for jobs, rather than self-employment is fuelling alternative movements including the growing number of HCCs.

It can be summarized that there are two strongly contradicting forces that are shaping the future of care in the German market – or rather said the training requirements of the future workforce. Whereas on the one hand side the business requirements of the future workforce are raising when looking at the provision of out-patient care by single unit freelancers, on the other hand there is no business knowledge need whatsoever when looking at the potential employment of a doctor as a medical professional in an HCC or a practice group.