Archived news

November 2010

Germany: Increase in Sick Fund contributions — A bitter pill for members and employers


Ray of Hope for Providers of Medical Products and Services

Saving can be different: The decision of the Federal Ministry of Health indicates this fact with the resolution to increase the contribution to sick funds from 14.9 to 15.5 percent. A painful decision for members as well as for employers, which however accounts for the definition of the economic term “saving”. Saving is defined as remaining factor between income and consumption or (expressed with regard to the sector of sick funds) contribution revenues minus service expenses.

Currently the health care fund manages 170 billion Euro and bases on contribution revenues dependent on economic trends and on expenditures independent on economic trends. A system that cannot permanently resist this area of tension without adaptations. The costs were an important regulating screw in the past, now the revenue-side becomes more significant. This does not slim down the system totally but it clearly shows that a certain range of service at a defined quality cannot get under cost pressure indefinitely.

The positive impulse for industry and service providers on the market is certainly not directly noticeable but it shows that there can be alternative ways beside contracts with lower margins for service providers.

However, this will not ensure sustainable success in order to avoid the underfunding of the health care fund in the years to come. Currently the fund is compensated by national budget at an amount of 15.7 billion Euro. The bitter pill for insured becomes a ray of hope for providers of service and medical products.