The economization of healthcare
Interview with Kalle Kunkel, ver.di union secretary for the Charité and for Charité Facility Management (CFM), April 2017
The economization of healthcare in Germany has gathered momentum since the 80s.
Since then, there is a tendency
to introduce market-based management tools
and to rely more on competition.
The most radical steps were
first of all that in 1997
all forms fixed staffing levels in the hospitals
were abolished.
Until then, at least for normal nursing,
there was the so-called nursing personell regulation.
It was supended in 1996
and then abolished in 1997.
It was said that such planning regulations
are in the way of the new goal
of establishing more elements of competition in the healthcare sector.
So that was the first step.
The second step was the introduction of the fee-per case system
with diagnosis-related groups (DRG).
This was in 2003,
but the process had started earlier, maybe since 2000.
This was the point when hospitals
were no longer paid for the costs
that they actually incur.
Now, for each individual diagnosis,
meaning for each patient with a specific diagnosis,
only a defined fee per case is paid.
This was definitely a break,
because since then each illness or diagnosis
has a price tag attached to it.
The important mechanism that was introduced by this
was that the hospitals
that were able to treat the patients
at this price, or even at a lower price,
were able to make a profit.
And those who were not able to
treat the patients at this price,
will make losses.
One of the prerequisites for this
is something that has only been possible since the 1980's:
the fact that hospitals are allowed to make profits or losses in the first place.
Because there was a time in Germany
- it's hard to imagine this today -
where hospitals were forbidden to make a profit.
This means that there was an accurate account at the end of the year,
this was the so-called full cost coverage.
If the hospital could prove that it had operated in an economically efficient way
then its eventual losses were balanced.
And if there were profits, they had to be paid back.
So this system was abolished.
And we can say that the introduction of the fee-per-case system
was one further step in establishing the health care system
as a care economy, as a market.
Since then, we have seen more and more
hospital beds, and entire hospitals
being managed by private firms.
Ten or fifteen year ago, private firms
had a market share of 10-15%.
By now they have a share of 30%.
What is interesting here,
is that private firms mostly go for the profitable cases.
So now we are facing an important question.
Healtcare is a service of public general interest.
So the hospitals that are publicly owned,
as well as those that are run by welfare organisations
such as churches etc.,
they see it as their duty
- or they are obliged by their public mandate -
to actually deliver this public service.
That is, to maintain something like emergency care
and the entire spectrum of treatments,
while private hospitals are in a position to have their pick.
Also, when private firms buy hospitals,
they tend to specialize more and more
on those treatments that are profitable.
And in this process they also try to do
as many of the profitable operations as they can.
Consequences for the hospital staff
One of the consequences of this development was
a massive reduction of non-phyisican hospital staff.
For example, when it comes to nurses,
since 1996/1997, when the nursing staff regulations were abolished,
50.000 nursing jobs were cut
until the mid-2010's.
Interesting enough, in the same time period
physician's jobs were created.
The hospitals had an incentive to do so,
to have as many physicians who perform as many treatments and operations as possible.
On the other hand, all care work that is necessary
immediately before and after the medical intervention,
and which is also important for the recovery process,
is seen as a financial burden.
That's the reason for the massive cuts.
For the employees, this results in a massive increase of their workload.
By now, Germany has one of the worst nurse-patient ratios
of all European countries.
The figures vary, depending on the study,
between 1:12 and 1:13 on average.
If you take Norway as a benchmark,
in Norway, there is one nurse caring for
a little more than five patients, on average.
This has lead to a situation where, increasingly, nurses feel burnt-out.
They cannot finish their work, they work unpaid hours of overtime.
Another important element is that
they cannot live up to their own standards.
This means that each day when I go home from work, I feel dissatified.
with how I manage do my work - or how I do not manage it any more.
And this is one of the most important triggers for a burnout.
And while the workload was strategically increased through job cuts,
We also saw the hospitals
starting to profit from the low-wage sector
which had been established by the "agenda reform"
of the social democratic / Green party government.
They did so by outsourcing everything
that they call "not directly patient-related".
To sum it up, they have outsourced all areas
which they believe they can get away with,
because of the position that these employees have
on the politically determined labour market.
These are classical low-wage sector jobs that were outsourced.
The wage level of the employees of Charité Facility Management (CFM)
is at 60% of the wage level of the regular Charité staff.
This is one of the tendencies that we noticed.
It is combined with collaborations with private partner firms.
At the Charité it is set up in such a way
that a private consortium holds 49%
of the firm Charité Facility Management.
This consortium is actually responsible for all of the operating business.
Exactly how much money do they extract out of this and at which point?
This is something that is kept from the public,
because the respective contracts are not made public.
The whole thing is a veritable scandal.
A public institution making contracts
worth millions of Euros,
and we don't know exactly what is written in these contracts.
Up to date, CFM is inhibiting the constitution of a correct supervisory board
through which employee representatives would have the possibility
- they would have to repect secrecy -
but they would have the right to inspect these contracts.
Also we as a union would have the opportunity to be present and to inspect.
We believe that this is one of the reasons that CFM
has blocked the constitution of a correct supervisory board for many years now.
Until today, even though court has ruled at the beginning of this year
that a supervisory board needs to be formed, they still try to play for time.
the profits
The question of profits or surplusses can be discussed on several levels.
First of all: We have private hospital companies
That fact is widely talked about, at the moment.
In Germany, we have the largest hospital corporations in Europe.
And they extract millions or billions of Euros from the system.
And we have to remember that these are health insurance funds.
This is money that the insured persons pay to ensure good healthcare service.
And this money ends up as profit of the corporations.
That's one side of it.
When we get to the second side, that's where things become a bit complicated.
The corporations say: "Well, we do re-invest a large portion of that money."
And this is partially true.
What is also important here: The communal hospitals,
just like the hospitals that are run by non-profit organisations,
in this respect at least, they all behave the same way.
The communal and non-profit hospitals also
make a profit, or have a a net revenue.
They also try to extract that from the system. Why?
Because the public authorities, the federal states in this case,
would normally have to pay the investment costs,
which would be necessary to maintain the hospital infrastructure.
We have a so-called two-pillar system:
Health insurances pay for the treatments, and for the operational expenses.
The federal states pay the costs that are necessary for the infrastructure.
Buildings, procurement of technology, and so on.
It is commonly known that they do not sufficiently do this.
We have studies that were conducted by the hospital
which say that only approximately half of the real investments of the hospitals
are funded by the public sector.
The rest comes from so-called own resources.
This again is one of these ideologial plastic phrases.
What it actually means, is:
Funds that were originally intended for financing treatment
for financing proper wages and proper staffing levels,
these funds that come from the insured persons
are used to meet financial obligations of the federal states.
This is an important point because it has larger implications
On one hand it has to do with this whole question of austerity,
meaning that the so-called saving of money, which takes place,
really means that the federal states do not meet a legal obligation
and instead the community of insured persons is held liable for it.
The second dimension of this is that hospitals do not make
all necessary investments, but only those that cannot be delayed any more.
So an enormous investment backlog has been created.
The federal states say, well,
we have financial problems.
For example, property taxes have been abolished,
and this has had a big impact on the federal states,
as it had been a state tax.
So for many years now, their investments have been decreasing.
The nominal value of the investments, the total numbers, as well as their percentage.
This means that the share of the investments made by the states decreases each year.
So any discussion about working conditions,
about the conditions of healthcare in hospitals
is inextricably connected with discussions about tax politics, fiscal politics.
And each party, or each organisation,
who says we want to improve things here,
without answering the question how the federal staes can meet their obligations,
so that we do not force the hospitals, at leat those who are not profit-oriented,
to use their operating funds to transfer them to contruction sites,
any such party or organization is basically hypocritical.
Conclusion
What we can see here is that we are facing quite a large cartel of interests.
who wants things to stay as they are.
The federal states, Berlin here for example,
in this state we would probaly need ...
Well, not probably, these are calculations of the hospital institutions themselves,
we would need 250 to 260 million Euros each year
in overall investments for the hospitals.
Berlin is currently paying about 100 million.
There's a 150 million gap.
Now we would have to ask: "How do we get there?"
The government coalition has decided to pay some debts instead.
The states are interested in a continuation of the status quo.
From a fiscal point of view, the hospitals take it out of their operating costs
they will continue to do so because financing it any other way is difficult.
The large hospital corporations are of course interested
in keeping the system profit-oriented.
The position of the health insurances is a bit peculiar:
Normally, they should be interested in having a rational control mechanism.
But for a few year now, they have also taken the position
of promoting market-based solutions.
So, the way we see it at the moment,
is that the only ones that represent a rational, fact-oriented postion here
are actually the employees.
This is why, about two years ago at the Charité,
we went on strike.
Because we noticed that on the question of staffing levels,
in a politial context, the arguments have been presented years ago.
The connection that Mr. Gröhe's big expert commission
has found just two months ago, that there is
a relation between the number of nurses and the health of their patients,
normally, this should be common sense.
Even if that is not enough, studies exist since ten years ago,
that have compared evaluations of this fact.
Mortality increases with each additional patient that a nurse has to care for.