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More cost control for outpatient medical care

Extra-budgetary remuneration: More cost control for outpatient medical care

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13.11.2023 Consultant report

Ever more frequently, expenditure on outpatient medical care is not capped. This involves the risk of uncontrollable cost hikes and false incentives. Outpatient medical services should therefore more often be subject to budget caps again, according to our recommendation in a recent advisory report to the Budgetary Committee of the German Parliament.

Individuals insured under the German statutory health insurance scheme are treated by some 185,000 physicians. In 2022, these panel physicians received more than €46 billion in remuneration payments – around 17 per cent of total scheme expenditure. A large number of billable treatment services are subject to so-called remuneration caps, i.e. budget capping. However, there are also treatment services that can be billed without applying budget caps. The German SAI has examined these extra-budgetary remuneration regime – with a special view to the Federal Government’s annual €14.5 billion subsidy to the scheme.

Extra-budgetary remuneration increases continuously

More and more services provided by panel physicians are not subject to budget capping. The share of such extra-budgetary remuneration has increased significantly between 2009 and 2022: from 22 per cent to almost 43 per cent.

In our opinion, extra-budgetary remuneration increases the risk that inefficient, in particular medically unnecessary services are provided. In addition, there is a lack of standardised national regulations and criteria as to which services may be remunerated on an extra-budgetary basis.

In order to increase transparency in providing services linked to uncapped remuneration and to prevent a further expansion of such services, we consider it necessary to establish binding criteria at national level.

While many of these services have been provided for a long time, in some cases for over a decade, the necessity of extra-budgetary remuneration has never been reviewed. Extra-budgetary remuneration should therefore be comprehensively evaluated in terms of efficiency and impacts on the quality of care.

In principle, services should only be remunerated on an extra-budgetary basis if this verifiably and significantly contributes to enhancing the quality and efficiency of medical care.

New remuneration rules under the Appointment Service and Healthcare Supply Act

The Appointment Service and Healthcare Supply Act, which came into force in 2019, created additional case groups under which services provided by panel physicians are remunerated without applying budget caps. One of the act’s objectives was to reduce waiting times for appointments for individuals insured under the statutory health insurance scheme. To remunerate physicians providing services under these case groups, the scheme spent some €12 billion by year-end 2022.

We did not find reliable evidence that the extra-budgetary remuneration provided under the act achieves its objective and improves care by reducing waiting times for appointments.

Removing budget caps does not solve problems

The Federal Minister of Health has come up with the idea that services provided by panel physicians should no longer be subject to budget caps. Among other things, this is to enhance care in rural regions. We doubt that this measure is appropriate to significantly improve the overall efficiency and quality of care for insured individuals.

Expenditure on outpatient care should adequately remunerate medical services, but should not be allowed to rise uncontrollably. Uncapped remuneration should therefore remain the exception.

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Advisory report (Short info in English, long version only available in German)

Extra-budgetary remuneration: More cost control for outpatient medical care PDF, 618 KB Download