Hospital Capacity Planning in Germany: Still a âFrozen Landscapeâ?
Hospital governance in Germany has undergone major transformations since the early 2000s. Hospital remuneration patterns, ownership structures, and the internal organization of hospitals have all morphed tremendously. Due to the introduction of diagnosis related groups (DRGs), a privatization quota which exceeds those of neighboring countries, and internal managerialization, todayâs German hospitals have little in common with those of the mid-1990s (Mosebach, 2009). One dimension of hospital governance, however, still belongs to the âfrozen landscapeâ (Esping-Andersen, 1996) that the German welfare state was famous for during this earlier period: the governance of hospital capacity planning. Even though the basic parameters defining hospital capacity planning have changed considerably, reform has largely stalled. Only in 2007 did a handful of German states begin hesitantly adhering to the predominant global scripts in this domain.
This paper has two objectives. First, it seeks to map the recent hospital planning policy landscape. Second, it aims to explain why some states belong to the first movers in this arena, while others belong to the group of late (or even non-) movers. The paper begins with a short introduction to hospital governance in Germany and a description of the research design employed. The latter consists of two different steps. First, theoretically derived and empirically derived ideal types in hospital planning are developed in order to classify hospital capacity planning policies in the 16 German states. Next, Qualitative Comparative Analysis (QCA) is carried out in order to distinguish between the roles of partisan politics, problem pressure, Germanyâs welfare mix, and statesâ administrative capacity in driving variation in hospital capacity planning.
The results show that both New Public Management (NPM) and post-NPM models figure among reform-minded states, while a considerable number of states continue to maintain traditional planning policies. The implementation of reforms thus cannot be explained by a single condition. Rather, there are different causal paths towards the introduction of new planning models. The analysis reveals that persistently high numbers of public providers and problem pressure tied to bed density and investment backlogs together play a dominant role in driving reform.
Hospital Governance in Germany: A Hybrid Arrangement Combining Markets and Hierarchy, Bureaucratic Planning and Performance Orientation
The German hospital sector displays rather complex governance arrangements that reflect both German federalism and a unique tradition of welfare corporatism. From the initiation of social policy in the country in the late nineteenth century, the âcorporatistâ German welfare regime has incorporated private for- and non-profit actors in both decision-making and the provision of hospital services. In fact, until the 1970s, hospital planning decisions were mainly negotiated between hospital owners and health insurance funds. Hospital planning only became a public responsibility in 1972, when the public perception that facilities were poorly allocated and underfunded became predominant (Wiemeyer, 1984; Simon, 2010).
With the enforcement of the hospital funding law (Krankenhausfinanzierungsgesetz (KHG)) in 1972, the logic of German federalism was layered upon the existing corporatist framework. German federalism is characterized by a division between legislative and administrative power. As a general rule, the system assigns legislative power to the federal government, while the right to design implementation structures is allocated to individual states. Hospital policy, however, stands as an exception to this rule by prescribing shared political responsibility for hospital direction. Since 1972, inpatient care provision and reimbursement have remained national responsibilities, while state governments have taken charge of hospital planning and hospital infrastructure policy. In terms of policy instruments, hospital governance at the state level is based on two different tools, hospital plans and infrastructure programs. Hospital plans define the territorial distribution of hospitals and are designed for regular adaptation to changing circumstances. It is up to the states, however, to decide when to issue a new plan.
Hospital infrastructure programs distinguish between lump sum grants (Pauschalförderung) or specific grants (Einzelförderung) (Ettelt, Ellen, Sarah, & Nicholas, 2008). According to the hospital funding law, each state is responsible for the financial sustainability of all hospitals included in the hospital plan and has to ensure that hospital care meets the needs of the population at affordable costs (§ 9, 5 KHG). However, while costs for technical equipment have skyrocketed in the past few decades as a result of technological innovations in medical care, state subsidies have decreased considerably over the years. Hospitals throughout the country therefore suffer from a so-called âinvestment backlogâ (Bruckenberger, Klaue, & Schwintowski, 2006), though states comply to a differing extent with their funding obligations, and investment quotas vary considerably across the country.
Not only is the constellation of actors involved in hospital planning complex, but the two levels of hospital governance in Germany also follow very different reform trajectories. At the federal level, reform activity has been high in the past two decades. The governance of inpatient care has experienced a major shift towards performance oversight, most explicitly through the introduction of DRGs as a remuneration instrument. DRGs are not a market-instrument per se; however, in combination with tight budgets, they foster competition between hospitals. Instruments of managed (âintegratedâ) care, which are negotiated in individual (âselectiveâ) contracts between funders and providers, too, have promoted competition and output orientation (Mosebach, 2009). To counterbalance market forces, however, quality policies have also recently been introduced (Bode, Lange, & MĂ€rker, 2013). All hospitals are currently expected to conduct thorough quality management reviews and are subjected to external quality assessments. Similarly, the concept of quality in hospital policy has been elevated on the political agenda by federal-level actors. The legal framework for both internal and external quality management has been designed by a host of corporatist national health committees, first and foremost by the so-called Joint Commission.
In contrast to the federal level, reform trajectories in the states have remained slow andâas the following sections will showâdiverse. In the past, hospital plans were only rarely considered an effective tool in shaping hospital policy. Most often, plans were only incrementally adapted to meet changing demographic trends or disease patterns without substantially altering the policy instruments that undergirded them.1 Most states still follow rather traditional forms of bureaucratic governance with a strong input orientation. The âbedâ remains the most important planning unitâuntil recently, whether a bed lay occupied or vacant was not considered an important question in planning procedures.
In other words, hospital governance in Germany today provides contradictory incentives for hospital managers: while instruments at the federal level, such as selective contracting or integrated care, imply both the possibility of capacity losses and capacity gains within an institution, âplanning service volumesâ or âactivitiesâ are not yet part of the planning philosophies of most states. Here, the full exploitation of the available number of beds is rewarded. Hospital governance in Germany is hence characterized by conflicting logics: bureaucratic planning procedures at the state level meet a governance system which is characterized by both performance orientation and a strong focus on quality assurance (see also Byrkjeflot, Neby, VrangbĂŠk, & Mattei, 2012). In terms of modernizing hospital planning, the crucial question is not only how to fund facilities and technical equipment in light of shrinking public budgets. Indeed, the more substantial issue consists of how to deal with the quest for increased output and quality assurance.
What drives the shift towards both performance orientation and quality assurance? In the recent literature on health policy change, we find very different approaches to explain the findings. First of all, problem pressure is considered as a crucial factor pushing policy actors to adapt their health care systems to changing circumstances (Schmid, Cacace, Götze, & Rothgang, 2010). Talking about problem pressure in the area of health policy means talking about medical-technological progress, about social-demographic changeâin particular the development towards an aging societyâand the changing consumer habits of increasingly better informed patients. Each of these developments results in a higher demand for increasingly more expensive medical treatments while, at the same time, economic resources are limited. The introduction of performance-oriented instruments is considered in this strand of literature as a functional answer to the cost containment problem. ...