This review also incorporates information from our 1993 review of German health care reforms and from current and past work using other international studies. However, even if pharmaceuticals and dentures are removed, outlays per member of the Statutory Health Care System rose only about 3 percent, easily meeting the Health Care Structure Reform Act’s goal of restraining growth to the rate of growth of income of members of the system subject to the contribution rate. Pharmaceuticals and Dentures

The largest rates of decrease in expenditures were seen in the sectors of pharmaceuticals and dentures, which had negative growth rates of 19.6 and 26.9 percent, respectively. Little Evidence of Impaired Access to Appropriate Care

Despite the introduction of stringent budgeting in most major sectors of the German Statutory Health Insurance System, access of patients to appropriate care was not impaired. In particular, fears had been raised that physicians might not prescribe needed pharmaceuticals to their patients; physicians might seek to hospitalize costly patients to transfer these costs to the hospital’s budget rather than treat them on the outpatient budget where they might affect future payments; and hospitals might transfer (dump) costly patients to other hospitals, usually tertiary care hospitals, to move these costs from the transferring hospital’s budget to the receiving hospital’s budget, which is usually higher. Will German Reforms Control Cost Growth in 1994? Long-Term Cost Control Through Structural Reforms

The Health Care Reform Act of 1993 set up the temporary global budgets to control health care expenditures while structural reforms intended to control costs over the longer term could be worked out and put into place. Others have not been in place long enough to have a significant impact.
Why GAO Did This Study

GAO reviewed the German health care system, focusing on the: (1) effects of nonnegotiable budgets on health care cost and access to care; and (2) status of some of the structural changes intended to control costs over the longer term.

What GAO Found

GAO found that: (1) during 1993, the German health care sectors generally succeeded in controlling the growth of health care costs, with outlays per member falling more than one percent from 1992 levels; (2) the largest decrease in expenditures occurred in the pharmaceutical and denture sectors; (3) the negative growth rate allowed participants' insurance premiums to decline slightly, but expenditure growth could resume in the future; (4) there was little evidence that the low cost growth rate limited participants' access to appropriate care; (5) there was no evidence that German physicians failed to prescribe needed drugs or unnecessarily admitted patients to hospitals in order to shift them from the physician budget to the hospital budget; (6) it was not known how many community hospitals unnecessarily transferred patients to tertiary care facilities to remove them from their budgets; (7) there was insufficient data to predict the future success of German health care reforms; and (8) some structural reforms have not been implemented and others have not been in place long enough to determine their impact.