German DRG System: Significant Changes Ahead

The German Healthcare system is constantly evolving. Not only are there various mechanisms from the administrative institutions in place to regularly assess the reimbursement schemes, but there are also ongoing political initiatives.

With the current Minister of Health (Jens Spahn, CDU), these initiatives have increased in pace and density. There have been 18 new laws related to healthcare introduced in the past 18 months.

Two of those laws, the PpuG (Law on Lower boundaries for nursing quotas in healthcare institutions) and the PpSG (Law to strengthen the nursing profession), will have a significant impact on the DRG system and on market access strategies for everyone currently in the market and everyone looking to enter the hospital market in the future.

Very simplified, the law results in the removal of all nursing costs usually included in the lump sum DRG-payments. Removing parts of the lump-sum DRGs will lead to a new distribution within this lump-sum, while the reduced DRG will create the incentive to reduce external costs (primarily medical devices).

Due to the severe nature of this change, the discussion on the exact process of the removal of nursing costs, and more importantly, how to determine the nursing budget for 2020 and beyond, is ongoing. We assume there will be very short notice of the exact situation.

The fact that the nursing cost is removed from the DRG-lump sums also implies that some DRGs will be reduced significantly more than others, simply because the amount of nursing time differs depending on the procedure.

Therefore, this reduction and the uncertainty of the nursing budget negotiation will most likely lead to cost-cutting measures in the hospitals. We strongly advise investigating the DRG(s) related to your method or device and simulate the effect of the removal of nursing costs on your economic model.  From there, you can derive argumentation for your users and their administration. Also keep in mind that because of the individual hospital nursing budget negotiations, any economic and price argumentation must be more tailored towards individual hospitals than before.

We have been building such a simulation model for several customers and were able to provide them with an appropriate track for their team.

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