Karl Lauterbach likes to paint a grim picture: profit-hungry “locusts” are descending on German medical practices. He intends to drive them away with bans. There is a motive behind this: the SPD health minister wants to score political points. In reality, he is making life difficult for registered doctors with his refusal to cooperate and excessive bureaucracy – and thus paving the way for practices to be sold to investors.
Key takeaways
1
Health Minister Lauterbach is called a hypocrite because his own policies are forcing doctors to sell their practices to the very investors he publicly attacks.
2
The Minister's refusal to update outdated medical fee schedules makes it financially impossible for many doctors to keep their private practices running.
3
The solution isn't to ban investors, but to strengthen private practices by cutting bureaucracy and modernizing fees.
Commentary By:
Mathias Höschel
The specialist dentist for orthodontics and business economist runs several dental practices together with his wife and a team of employees. Höschel is also chairman of the Federal Association of Health Clearing Houses (BVVG). His political activities include serving as chairman of the health policy working group of the CDU North Rhine-Westphalia.
It has been known for centuries that crocodiles secrete tears when devouring their prey. In “Physiologus,” a collection of animal descriptions from late antiquity, this behavior is interpreted as hypocrisy. The crocodile is compared to powerful people who, on Judgment Day, loudly lament their own misdeeds and failures in the hope of mercy. To this day, the “crocodile tears method” can also be observed in some politicians. Karl Lauterbach has perfected it. When the health minister of the traffic light coalition government loudly rails against “locusts” who buy up medical practices and invest in medical care centers (MVZ) out of greed for profit, it is nothing more than hypocrisy. Hypocrisy with a strong dose of populism.
Investor-run medical centers have long been part of our healthcare system and, regardless of all the more or less justified criticism, are used by thousands of patients every day. Simply banning them under cries of “greed medicine,” as Lauterbach has announced, would not only raise significant property rights and possibly even constitutional issues, but would also fail to provide better medical care to a single patient.
With his pithy remarks, Lauterbach also gives the impression—whether intentionally or not—that private-sector involvement in healthcare is inherently evil. This is, of course, nonsense. After all, doctors in private practice, who often work tirelessly to run their own practices or group practices in our country, must naturally also be entrepreneurial and act in a business-minded manner as medical freelancers.
It goes without saying that the well-being of patients always takes priority. Traditional doctors and dentists in private practice in Germany are sole traders. They bear the full risk for their capital, for the functioning of their practices, and also for their retirement provisions. Together, they form the backbone of our healthcare system. At least for now. Strengthening it and making it resilient is a task that SPD Minister Lauterbach is lamentably neglecting. Admittedly, this is similar to other health ministers before him, including those with CDU or FDP party membership.
Why are international investors pushing into the German healthcare market? Because they have identified opportunities for profit. The outpatient healthcare sector in Germany is huge: more than €213 billion was spent in the outpatient sector in 2020, with almost €90 billion going to doctors' and dentists' practices, according to figures from the Federal Statistical Office.
But that is only part of the truth. Medical investors are also drawn to Germany because they sense “easy prey” here: medical and dental practices, for example, whose owners are looking forward to a well-deserved retirement but can hardly find any interested successors among their younger colleagues. All too often, unfortunately, investors are the only ones offering reasonable—and in some cases temptingly high—sums for the purchase of practices. Their goal is to later operate them more efficiently and as profitably as possible within corporate structures.
Investors are keen to buy up “interesting” areas of outpatient care, where they can consolidate, streamline, and scale processes. This is driven by industrial thinking: process and profit optimization are set to find their way into an area where medical ethics and patient care have traditionally been the priority. Sooner or later, this type of economization will create a “care power” in a region. And when it is large enough, the tables will turn: then it will not be health insurance companies or politicians who call the shots, but the “providers.”
Given the danger of such a development, it seems perfectly understandable at first glance that Lauterbach is loudly railing against “locusts.” But on closer inspection, it quickly becomes clear that Lauterbach, who likes to refer to Harvard studies but is not known for having internalized medical practice from his own experience, is actually encouraging this species with his misguided policies. He hypocritically portrays himself as the savior of freelancers from greedy profiteers. In reality, however, he is failing to set the course for the outpatient sector in such a way that doctors are once again more willing to take on the hardships, responsibilities, and entrepreneurial risks associated with self-employment.
When we observe today that more and more prospective doctors see their professional future in salaried employment—including in investor-owned medical centers—this has a lot to do with the fact that freelancing has become increasingly unattractive in recent years: the burden of government-imposed control and documentation bureaucracy has risen immeasurably. At the same time, earning potential in private practice has shrunk. The overall conditions have deteriorated significantly.
Like his predecessors, Lauterbach is blocking the long-overdue reform of the fee schedules for doctors (GOÄ) and dentists (GOZ). The currently valid GOÄ dates back to 1982 and was only partially amended in 1996. The GOZ from 1987 was revised in 2011, but the applicable point value for billing the respective services was not increased. Both fee schedules are simply completely outdated.
In view of general developments in the field and in medical technology, significant cost increases, and extremely high inflation, fee adjustments have long been necessary. Because these have not been implemented, the costs and benefits of running a practice are often no longer in reasonable proportion to each other.
In addition to adapting both fee schedules to the therapies that are common and possible today, the necessary redesign must finally ensure that the point values are regularly adjusted to reflect cost developments. What has long been normal in other areas—the adjustment of rates to real developments—must finally become the norm for the medical profession as well. One possibility would be to link the point values to the development of the allowances paid to members of the Bundestag. Or do our elected representatives want to deny the medical profession what they themselves take for granted?
Medical advances, new treatment methods, digitalization—they are simply no longer adequately reflected. And services are no longer adequately remunerated. As a result, interest in running a practice is declining. At the same time, there is a growing willingness to sell to the highest bidder. The result: parts of our healthcare system are being presented to financially strong investors on a silver platter.
Instead of questionable bans, politicians should focus on supporting the outpatient sector. The CDU and CSU are pushing for a thorough revision of the fee schedules in the Bundestag. This is a practical and relevant health policy. The Union faction points out that the German Medical Association (BÄK), the Association of Private Health Insurance (PKV-Verband), and the subsidy providers have worked out a joint draft of a new GOÄ in recent years. It covers the entire range of medical services in a modern, transparent, comprehensible, and legally secure manner. A trial run by the BÄK and PK-Verband shows that these fee schedule proposals, which have been calculated on the basis of economic principles, are realistic and practicable.
But what is the Minister of Health doing? He is putting up fierce resistance to any reform of the GOÄ and ignoring all relevant proposals and demands from the medical profession. This is a clear breach of duty. BÄK President Klaus Reinhardt has repeatedly and rightly criticized the minister's inaction, including at the 127th German Medical Assembly in Essen in May. While the fee schedules of other liberal professions have been adjusted by legislators in recent decades, there is a ministerial blockade in health policy.
This is not just an affront to the medical profession. It is a deliberate weakening of the backbone of our healthcare system. Anyone who acts in this way and at the same time complains about “locusts” is indeed a hypocrite. In the 13th century, the Franciscan monk Bartholomaeus Anglicus explained the tears of crocodiles by saying that they wept for the death of their victims while eating them. Science has long since disproved this, of course. The supposed tears are caused by pressure on a gland behind the eye when the mouth is opened too wide. Crocodiles know no compassion.
Investor-run medical centers have long been part of our healthcare system and, regardless of all the more or less justified criticism, are used by thousands of patients every day. Simply banning them under cries of “greed medicine,” as Lauterbach has announced, would not only raise significant property rights and possibly even constitutional issues, but would also fail to provide better medical care to a single patient.
Investor-run medical centers have long been part of our healthcare system and, regardless of all the more or less justified criticism, are used by thousands of patients every day. Simply banning them under cries of “greed medicine,” as Lauterbach has announced, would not only raise significant property rights and possibly even constitutional issues, but would also fail to provide better medical care to a single patient.
It goes without saying that the well-being of patients always takes priority. Traditional doctors and dentists in private practice in Germany are sole traders. They bear the full risk for their capital, for the functioning of their practices, and also for their retirement provisions. Together, they form the backbone of our healthcare system. At least for now. Strengthening it and making it resilient is a task that SPD Minister Lauterbach is lamentably neglecting. Admittedly, this is similar to other health ministers before him, including those with CDU or FDP party membership.
Why are international investors pushing into the German healthcare market? Because they have identified opportunities for profit. The outpatient healthcare sector in Germany is huge: more than €213 billion was spent in the outpatient sector in 2020, with almost €90 billion going to doctors' and dentists' practices, according to figures from the Federal Statistical Office.
But that is only part of the truth. Medical investors are also drawn to Germany because they sense “easy prey” here: medical and dental practices, for example, whose owners are looking forward to a well-deserved retirement but can hardly find any interested successors among their younger colleagues. All too often, unfortunately, investors are the only ones offering reasonable—and in some cases temptingly high—sums for the purchase of practices. Their goal is to later operate them more efficiently and as profitably as possible within corporate structures.
Investors are keen to buy up “interesting” areas of outpatient care, where they can consolidate, streamline, and scale processes. This is driven by industrial thinking: process and profit optimization are set to find their way into an area where medical ethics and patient care have traditionally been the priority. Sooner or later, this type of economization will create a “care power” in a region. And when it is large enough, the tables will turn: then it will not be health insurance companies or politicians who call the shots, but the “providers.”
Given the danger of such a development, it seems perfectly understandable at first glance that Lauterbach is loudly railing against “locusts.” But on closer inspection, it quickly becomes clear that Lauterbach, who likes to refer to Harvard studies but is not known for having internalized medical practice from his own experience, is actually encouraging this species with his misguided policies. He hypocritically portrays himself as the savior of freelancers from greedy profiteers. In reality, however, he is failing to set the course for the outpatient sector in such a way that doctors are once again more willing to take on the hardships, responsibilities, and entrepreneurial risks associated with self-employment.
When we observe today that more and more prospective doctors see their professional future in salaried employment—including in investor-owned medical centers—this has a lot to do with the fact that freelancing has become increasingly unattractive in recent years: the burden of government-imposed control and documentation bureaucracy has risen immeasurably. At the same time, earning potential in private practice has shrunk. The overall conditions have deteriorated significantly.
Like his predecessors, Lauterbach is blocking the long-overdue reform of the fee schedules for doctors (GOÄ) and dentists (GOZ). The currently valid GOÄ dates back to 1982 and was only partially amended in 1996. The GOZ from 1987 was revised in 2011, but the applicable point value for billing the respective services was not increased. Both fee schedules are simply completely outdated.
In view of general developments in the field and in medical technology, significant cost increases, and extremely high inflation, fee adjustments have long been necessary. Because these have not been implemented, the costs and benefits of running a practice are often no longer in reasonable proportion to each other.
In addition to adapting both fee schedules to the therapies that are common and possible today, the necessary redesign must finally ensure that the point values are regularly adjusted to reflect cost developments. What has long been normal in other areas—the adjustment of rates to real developments—must finally become the norm for the medical profession as well. One possibility would be to link the point values to the development of the allowances paid to members of the Bundestag. Or do our elected representatives want to deny the medical profession what they themselves take for granted?
Medical advances, new treatment methods, digitalization—they are simply no longer adequately reflected. And services are no longer adequately remunerated. As a result, interest in running a practice is declining. At the same time, there is a growing willingness to sell to the highest bidder. The result: parts of our healthcare system are being presented to financially strong investors on a silver platter.
Instead of questionable bans, politicians should focus on supporting the outpatient sector. The CDU and CSU are pushing for a thorough revision of the fee schedules in the Bundestag. This is a practical and relevant health policy. The Union faction points out that the German Medical Association (BÄK), the Association of Private Health Insurance (PKV-Verband), and the subsidy providers have worked out a joint draft of a new GOÄ in recent years. It covers the entire range of medical services in a modern, transparent, comprehensible, and legally secure manner. A trial run by the BÄK and PK-Verband shows that these fee schedule proposals, which have been calculated on the basis of economic principles, are realistic and practicable.
But what is the Minister of Health doing? He is putting up fierce resistance to any reform of the GOÄ and ignoring all relevant proposals and demands from the medical profession. This is a clear breach of duty. BÄK President Klaus Reinhardt has repeatedly and rightly criticized the minister's inaction, including at the 127th German Medical Assembly in Essen in May. While the fee schedules of other liberal professions have been adjusted by legislators in recent decades, there is a ministerial blockade in health policy.
This is not just an affront to the medical profession. It is a deliberate weakening of the backbone of our healthcare system. Anyone who acts in this way and at the same time complains about “locusts” is indeed a hypocrite. In the 13th century, the Franciscan monk Bartholomaeus Anglicus explained the tears of crocodiles by saying that they wept for the death of their victims while eating them. Science has long since disproved this, of course. The supposed tears are caused by pressure on a gland behind the eye when the mouth is opened too wide. Crocodiles know no compassion.