The interview partners
Prof. Dr. Patrick Da-Cruz is Professor of Business Administration and Health Management at the Faculty of Health Management at Neu-Ulm University of Applied Sciences (HNU) and Academic Director of the MBA program in Leadership and Management in Healthcare. Prior to joining HNU, Mr. Da-Cruz worked for renowned strategy consultancies in the pharmaceutical/healthcare sector and held management positions in healthcare companies in Germany and abroad.
Hanno Wolfram worked in the pharmaceutical industry for more than 20 years, including in sales, as head of human resources, managing director for Switzerland, and area manager for Europe. Based on this experience, he founded the consulting agency Innov8, where he has been supporting consulting, change, and implementation projects in numerous countries for 25 years. He is an author, coach, and lecturer at HNU.
What do you see as the reason for the rising costs?
Hanno Wolfram: Our Reich Insurance Regulation is more than 100 years old. From today's perspective, its key achievement is the solidarity-based community. This means that everyone pays the same contribution, healthy and sick, old and young, women and men, families and singles. We are better off than many other nations in this respect. According to our understanding of the term, this is “social” insurance. Our statutory health insurance covers approximately 80% of the German population. The rest are privately insured or uninsured.
Older people are “naturally” more prone to illness. This naturally leads to an increase in the costs of maintaining health and providing healthcare. The older a society becomes, the higher the costs for healthcare. The connection between demographic change and an increasingly expensive healthcare system is compelling. This is not really news, but rather trivial. However, this fact is not given much consideration.
What role do patients play in cost development?
Hanno Wolfram: On the one hand, people perceive healthcare services as being “more or less free.” Others may want something in return for the money they pay in. In any case, the extent to which the statutory health insurance-financed healthcare system is used seems unusual. While Swedes see a doctor about 2.4 times a year, Germans sit in the waiting room about five times as often. There should be no differences in morbidity. I leave it to the reader to decide whether the significantly longer life expectancy of Swedes is related to their significantly lower use of medical consultations.
When family doctors report patients who come to the practice practically every week, it gives pause for thought, to say the least. The same applies to many specialists who set rigid appointment schedules to allow a minimum amount of time for each patient.
In addition, more than half of all patients engage in behavior that significantly increases costs: so-called non-adherence to therapy. Studies estimate that around 20% of prescribed medications are never even picked up. When prescribed medications are taken, less than half of all patients take them! The majority of patients discontinue therapy for chronic diseases within the first year. Many forget to take their medication, while others consciously stop therapy.
Conversely, this must mean that for around 50% of these patients, the total cost of diagnosis and treatment, i.e., the total cost of care, is useless and pointless. Resources such as time and money are wasted by patients and “thrown out the window.” The central goal of therapy for chronic diseases is to prevent the disease from worsening. This goal is made unattainable by non-adherent patients. This is actually sad and very expensive news.
How does medical progress affect costs in the healthcare system?
Hanno Wolfram: Medical advances in outpatient medicine mainly affect the drugs that are available. These advances in recent years have been a blessing for patients, but they're also super expensive. If you look at prescriptions worth over €1,000, they make up about 47% of all drug costs, but only about 1.5% of prescriptions.
In contrast, Germany has now become a low-price country for the majority of chemical drugs prescribed. Due to politically reduced drug prices, around 80% of all prescriptions are now generics. The prices that statutory health insurance companies pay for these generics are generally the lowest in Europe.
Which area causes the highest costs in the healthcare system?
Hanno Wolfram: Hospital treatment costs around €102 billion in Germany. That is about 30% of all statutory health insurance expenditure. Medicines cost only around €55 billion. This is about 17% of all expenditure and similar to the amount spent on outpatient treatment.
The special situation of hospitals is a hot topic in public and media perception. The Hospital Care Improvement Act has been in force since January 1, 2025. It aims to stabilize spending on the inpatient sector and improve the quality of treatment. The most important drivers here are specialization and the adjustment of structures and numbers.
It is rarely reported that no other country in Europe has as many hospital beds as Germany. According to the OECD, Sweden has only about a quarter of that number per 1,000 inhabitants. Statistically, we have 7.7 beds per 1,000 inhabitants, while Sweden has only 1.9.
What measures could help reduce costs in the healthcare system?
Hanno Wolfram: The fact that we want to afford our own structure in every federal state, plus the federal AOK association, is costly and perhaps unnecessary. Administrative costs account for only about 4.5% of expenditure. This issue therefore provides a convenient topic for discussion, but it is not an effective lever for curbing excessive spending.
The figures are clear: the main burden of cost reduction must lie with the hospital sector. If the implementation of current legislation succeeds in delivering higher quality at lower cost, it should also be possible to stabilize statutory health insurance expenditure and thus contributions. In any case, it looks as if there is plenty of room for improvement in this area.
There is regulatory leeway for the outpatient sector. The annual prescription or “repeat prescription” of medicines by pharmacists has probably led to a reduction in doctor consultations for chronically ill patients. Perhaps the “home pharmacist” could also support therapy adherence more efficiently than before. In any case, such approaches offer significant time and convenience gains for patients and doctors alike.
The more difficult, but no less important, approach lies with the patients: high utilization, negligent cooperation in treatment, and a lack of health literacy are the most important issues for me.
When communicating treatment and other costs to patients, things can quickly get out of hand. Patients need to learn and know what causes which costs and how. Word needs to get around that the solidarity community of all insured persons is happy to provide comprehensive help in serious cases. However, in the case of minor issues and temporary health problems, exploiting the system should cause a guilty conscience.
It would also be worth trying to promote health literacy among patients and healthy individuals. Perhaps this could also lead to improved resilience in the face of minor health problems through the revival of effective home remedies.
Thank you very much for talking to us!
The content and statements presented in the interviews reflect the perspective of the interviewees and do not necessarily correspond to the position of the editorial team.
