Health Minister Karl Lauterbach in an interview about financing care and rising contributions

Mr Lauterbach, there is a lot of talk about your hospital reform, including the planned strengthening of family doctors. But there are also many problems with nursing care insurance: Due to the shortage of skilled workers, finding a nursing service or a place in a home is becoming increasingly difficult. In addition, costs are rising rapidly. What do you intend to do?

First of all, there is an acute problem in nursing care insurance. In recent years, the number of people in need of care has risen explosively. For demographic reasons, only an increase of around 50,000 people would have been expected in 2023. But the increase is actually over 360,000. Such a strong increase in such a short time should give us pause for thought. We don’t yet understand exactly why this is the case.

Could this be a kind of catch-up effect after the Corona pandemic, in which fewer people applied for a care level in order not to become infected during the assessment?

That is a hypothesis that we are now testing. However, I do not believe that the catch-up effect explains growth on this scale. Rather, I assume that we are experiencing a sandwich effect: the very old people who need care are joined by the first baby boomers, who are now also in need of care. So for the first time there are two generations that are dependent on care at the same time: the baby boomers and their parents.

But the baby boomers are actually still too young to need care. Science says we age more healthily, doesn’t it?

We have a number of illnesses that previously would not have been long-lasting. Take, for example, people with severe disabilities or accident victims with massive permanent damage. Thanks to the advances in medicine, the group of people who need care at a young age has grown. This presents us with particular challenges.

What does this increase mean for the already strained finances? The health insurance funds assume that – contrary to your announcement – ​​contributions will have to rise in the election year of 2025.

It will not be easy. It is clear that we need a more solid form of financing care in the medium and long term. With the current contribution system alone, we will not be able to maintain the level of care services. We must prevent care from being devalued by price increases and higher wages for nursing staff. This is why the services must be made more dynamic, i.e. increased regularly.

That will be expensive.

Correct. But unlike health care, Germany does not spend an excessive amount on nursing care compared to other countries. Much of this is already being cut to the bone. It cannot stay that way.

A working group made up of several ministries is supposed to present proposals for financial reform by the end of May. Will this come to fruition?

We are on schedule and will be finished at working level by the end of May. I don’t want to get ahead of myself, but I can say this much: There is unlikely to be a uniform recommendation from all those involved. The views of the various ministries and coalition partners are too different for that. But there was a very good joint analysis of the problem. We will compare the different possible solutions in a neutral and fair manner.

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This is of little use to those in need of care and those who pay contributions. Will there be any care reform during this election period?

A comprehensive financial reform in the care sector will probably not be possible in this legislative period. Opinions are too far apart for that. In any case, the remaining time would not be enough for that. However, the work of the working group is a good basis for a major care reform in the next legislative period. But it must come then.

What ideas did you bring to the working group?

It is unjustified that high earners and civil servants do not participate in the solidarity financing of care because they can insure themselves privately. The benefits in both care insurance schemes are completely identical. We need a public care insurance scheme into which everyone pays.

Oh, come on, Mr Lauterbach, do you really want to solve the problems with old-fashioned solutions? People have been talking about citizen insurance for decades. It never comes to fruition.

Up until now, the discussion about citizen insurance has often been ideological. To be honest, it hasn’t really been necessary because the financial pressure hasn’t been that great. That’s different today. We are entering a phase in which demographics will cause costs to rise more than ever before. For the first time, the question is how long care insurance will remain affordable. In addition to citizen insurance, we need a higher tax subsidy, for example for the pension contributions of relatives who provide care. This is a task for society as a whole. And thirdly, I propose reforming social assistance for those in need of care.

What exactly do you mean?

If people can no longer pay for their own care, they are entitled to nursing care assistance as a social benefit, which is paid for by the local authorities using taxpayers’ money. Many of those affected find it degrading to have to rely on the social welfare office at the end of their life, during which they have worked hard. That is why we need to destigmatize this support. In order to save those affected from having to go to the social welfare office, the nursing care funds could in future pay out nursing care assistance. In order to finance this, the tax money saved by the local authorities must of course go to the nursing care insurance. Someone who has worked all their life and still cannot afford nursing care in old age has a right to support and is not a social case.

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But money is only one of the problems. Entire departments are now having to close due to a lack of skilled workers. How do you plan to get this under control?

The only lever we have is to improve working conditions. We have already achieved a lot in terms of wages. In no other specialist profession have incomes risen as much in recent years as in nursing. This must continue. We will also significantly increase the value of the profession by giving nursing staff more skills. To this end, we are drafting a law in close coordination with the German Nursing Council. With more skills, we can attract more young people. In addition, we are simplifying and accelerating the recognition of foreign qualifications. The law has already been passed and is currently being implemented. But we also want to introduce a new type of care in order to provide better care for those in need of care and at the same time use staff more efficiently.

What exactly are you planning?

We will abolish the strict separation between outpatient and inpatient care through new forms of housing that represent an alternative to both assisted living and traditional nursing homes. I call this “outpatient care”. People should be able to stay in their own four walls until the end of their lives, even if they are in great need of care – cared for by nursing services and relatives. We will create the legal basis for this.

Let us also look at the hospital reform. The states, which could stop the project with a two-thirds majority in the Federal Council, have announced bitter resistance. What do you want to do?

We are also involving the states in the parliamentary deliberations in the Bundestag and will ultimately reach an agreement. We are saving the small hospitals in rural areas in particular because we are providing extra supplements, for example for emergency care, intensive care or obstetrics. The states will ultimately appreciate this. I am very optimistic about this. Anyone who knows the hospital situation knows that we need the reform.

There is also strong criticism of the financing of the hospital reform. Expert reports consider the planned transformation fund of 50 billion euros, half of which is to be funded by the health insurance companies and half by the states, to be unconstitutional. Has the government not taken this into account?

The Transformation Fund has been examined in detail by the constitutional ministries of Justice and Home Affairs and found to be constitutional. The health insurance funds – and therefore the contributors – will ultimately benefit if we use the money more efficiently in the hospital sector.

There is another plan of yours that is highly controversial: you want to keep the prices that health insurance companies negotiate with the pharmaceutical industry secret in the future. You were previously against this. Why the change of course?

In fact, my priorities have changed compared to before. On the one hand, I still want to ensure that the health care system offers very good quality at reasonable costs. On the other hand, I am also interested in new and future-proof jobs in the pharmaceutical industry. And the confidential prices are a location advantage, so that companies invest here. And it benefits the health insurance company and the people who pay contributions because they can get higher discounts.

However, you yourself – and today the Greens – argue that Germany is not showing solidarity with other countries that have so far been able to use our prices as a reference.

Why should we be the only ones to publish our prices and then accept the disadvantage of higher costs? I cannot expect the German taxpayer or the contributors to accept that.

The health insurance companies assume that health insurance premiums will also have to rise in the election year of 2025. What is your forecast?

I don’t want to speculate. What is clear is that we are currently catching up on important structural reforms in the health care system that have been overdue for at least ten years: drug shortages, hospital reform, better remuneration for GPs. We have even lost two decades in terms of digitalization. These investments ensure that our health care system improves and remains affordable. This is the only way we can provide good care for the baby boomers. I am confident that we can achieve this with contributions that are almost stable.