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«Tim Rosengart July 17, 2009 This is a Bucerius/WHU MLB thesis 12,832 words (excluding footnotes) Supervisor 1: Professor Dr. Bernhard Hirsch ...»

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In addition to ensuring a healthy population, politics should understand keeping constant the rate which is deducted from the salary of statutory health insurance members [Beitragssatzstabilität] as one of its main principles. The principle is regulated in Art. 71 SGB V and its importance shall not be underestimated due to its influence on Germany’s attractiveness as a place to do business.

Improving efficiency and the quality of medical treatments are seen as issues of particular current importance in German politics.

With regard to the expectations of legislative and executive towards doctors with own practices, Art. 12 SGB V is of significant relevance.79 Unlike a common belief by patients and the impression which is communicated by many politicians, members of the statutory health insurance are not entitled to an optimal treatment by their physicians.80 Art. 12 SGB V provides for a “treatment which is satisfactory, appropriate and cost-effective.” Moreover, “medical treatments shall not go beyond what is necessary and patients are not entitled to treatments which are not necessary or non costCompare Hajen et al. (2008), p. 23.

Compare Sozialgesetzbuch Fünftes Buch as a general overview of the benefits to which members of the statutory health insurance are entitled.

Compare Interview mit Dr. 6, p. 105ff..

effective and therefore shall not be provided by medical practitioners and paid for by statutory health insurances.”81 By enjoining medical practitioners from providing non cost-effective treatments, the legislature expresses its expectations towards doctors’ behavior and directly influences their economic decision making.

In addition, politics indirectly influence and steer the investment behavior of doctors by providing financial privileges for selected treatment methods i.e. for several years electrocardiograms (EKGs) were supported, whereas nowadays lung-function tests are prioritized.82 In this context, strong influences of industrial interest groups and lobbyists need to be expected, too.

Inherent in the relationship of the legislative and executive with the statutory health insurance providers another indirect influence on doctors coexists. By means of SGB V, politics influence the framework of statutory health insurances which, in turn, pass their framework on to the ASHIP which represents the doctors’ interests and is responsible for the distribution of the insurances’ budget for ambulant health care services.

In general, the influences and expectations of politics depend on the political party in charge. The righteous CDU traditionally represented interests of doctors, whereas the leftist SPD supported the views of statutory health insurances.83

–  –  –

Since 1883, the system of statutory health insurances has existed in Germany.84 Their major objective is to provide their members with health care services which meet the legislature’s expectations expressed in SGB V.85 Due to the political objective of Beitragssatzstabilität, the insurances inability to issue debt, restrictions on setting money aside in economically good times, growing costs from an ageing society and surging costs due to a steady progress in medical technology, statutory health insurance companies face an increasingly high pressure from their given framework and need to strive to obtain their objective as cost-effectively as possible.86 The financial pressure on insurances, together with an increasingly strong competition among statutory health insurances translates into expectations towards the behavior of medical practitioners with their own practices.87 Statutory health insurances expect physicians to provide “better quality medical treatments, treatments aiming at the prevention of diseases in order to reduce long-term costs and more efforts towards preventing wrong treatments.”88 Insurances consider quality management, transparency on physicians’ performance, as well as a performance based pay, to be key instruments in the common effort to achieve better treatment quality.89 In this context, the aforementioned Ärzte TÜV was also developed and financed by a major German statutory health insurance.90 In addition to the efforts described above, insurances want to facilitate thinking in processes and co-operation among doctors i.e. the recovery of patients as a sequence of treatments by different co-operating physicians who share information on patients and follow the same goal of a qualitatively high and cost-effective medical treatment of patients.91 Compare Hajen et al. (2008), p. 109ff..

Compare SGB V.

Compare Hajen et al. (2008), p. 109 ff.; Warnebier (2007), p. 72ff.; Erbe (2009), p. 1ff.; Sachverständigenrat zur Begutachtung der Entwicklung im Gesundheitswesen (2009).

Compare Erbe (2009), p. 1ff.; Interview mit Frau Dr. Sewekow, p. 62.

Erbe (2009), p. 2.

Interview mit Frau Dr. Sewekow, p. 62.

Compare Bohsem (2009), p. 1.

Compare Interview mit Frau Dr. Sewekow, p. 62.

3.3.4 Colleagues The role of colleagues as a major source of influence was described by many of the interviewed doctors in chapter four of this thesis.92 Germans are enjoined from going straight to a specialized physician of their choice but rather have to first consult a general practitioner. Consequently, particularly doctors with specializations see it as their objective to establish good relationships with fellow physicians on whom they depend in order to be recommended by their colleagues. The aforementioned role of trust and a missing overview on possible treatment alternatives for patients certainly plays a major role in this context.93 Doctor’s surgeries’ reputation among potential patients, as well as among colleagues is decisive for their economic success and a major driver behind doctors’ behavior. This effect is emphasized because opportunities which physicians had to attract patients to their premises traditionally were limited by law. Reliance on powerful mouth-to-mouth “propaganda” was and is still seen as doctors’ most important marketing tool to retain existing and attract new patients. In 2002, medical practitioners, by a reform of the Law on Advertisement in the Health Care System [Heilmittelwerbegesetz], were given greater freedom to promote their “services” to potential “clients”.94 Organizations such as the ASHIP cater for the increasing importance of marketing for doctors’ surgeries and also medical practitioners perceive marketing and service orientation as an increasingly important topic. 95 Compare Interview mit Dr. 9, p. 128ff..

Compare Interview mit Dr. 1, p. 68ff..

Compare Bahner (2003) for an insight into the regulations on physicians’ marketing activities.

Compare Kassenärztliche Vereinigung Nordrhein (2009); Interview mit Dr. 5, p. 97ff.; Interview mit Dr. 10, p.


3.3.5 Suppliers of medical equipment and drugs Suppliers of medical equipment and drugs provide the tools for doctors’ surgeries which are indispensable for medical practitioners to exercise their profession.96 Because they are indispensable in the treatment of patients and prices for pharmaceuticals are not regulated as in other countries, their impact on the overall expenditures in the German ambulant health care sector is immense.97 The suppliers’ objective is to sell as many of their products as possible and to maximize their profits.

Different from the other forces which are influencing the decision making of health care professionals, suppliers cannot directly express their expectations towards doctors. They have to rely on physicians’ goodwill and need to convince them to buy or prescribe their products. Consequently, companies heavily invest into many forms of marketing to gain greater market shares and often try to “buy” the doctors’ goodwill i.e. by inviting them to conferences in expensive luxury hotels.98

–  –  –

Chapter three has aimed to provide a better understanding of the environment in which doctors are working and elaborated on the external stakeholders, who affect this environment with their objectives and expectations. It was shown that the environment in which doctors face their decisions is quite complex and instable, due to influences from various stakeholders This chapter also aimed to make clear the conflict which is inherent in the economic decision making process of doctors. The environment of doctors, which is strongly influenced by external stakeholders, in combination with physicians who are assumed to act in accordance with the definition of the homo oeconomicus of chapter two, which expects decision makers to always prioritize and maximize their own utility, cannot be aligned with an optimal treatment as it is expected by patients. As already said in chapter two, the assumption of the homo oeconomicus is not always perfectly valid and describes the decision making behavior observed in practice only to a limited extent. The traditional assumption that being a doctor is a somehow different job and the

paramount trust of patients in their physicians will be tested in the following hypothesis:

H9: Doctors’ decision making is in line with what had to be expected under the assumption of the homo oeconomicus. Physicians rank their own utility higher than the utility of their patients.

The extent to which external stakeholders are affecting doctors’ environments was assumed to be varying. Consequently, it also has to be assumed that the extent to which doctors rank their utility higher than those of their patients varies, too. The same idea should be applied to the motivations which make doctors perform their job. Young people want to study medicine for various reasons and altruism is assumed to be among these. Motivations that were important at the start of studies and in the first years of a career in a hospital are likely to be replaced by different motivations throughout the course of a career. For testing doctors’ motivation behind their work, the following hypothesis

was developed:

H10: Altruism and money are not the single most important motivations behind doctors’ work.

The following figure shall assist in further summarizing the previous chapter.

–  –  –

Chapters two and three provided the necessary theoretical background for investigating the economic decision making behavior of doctors with their own surgeries. Based on the insights derived from these chapters, hypotheses on the economic decision making behavior of doctors were developed and will be tested in this chapter. A short summary of all hypotheses is provided below.

H1: Doctors use mental models to simplify their economic decision making. Their decision making process is determined by a limited number of key variables.

H2: Assuming the concept of mental models to be applicable for doctors’ economic decision making. – Education is a key variable in doctors’ decision making.

H3: Assuming the concept of mental models to be applicable for doctors’ economic decision making. – Intuition and experience are key variables in doctors’ decision making.

H4: University education provides prospective doctors with relevant knowledge in the field of business administration that they need to manage own medical practices.

H5: University education provides prospective physicians with an adequate understanding of the economic implications of their decision making for society.

H6: Doctors try to avoid any form of uncertainty in their economic decision making and are willing to accept only a very limited amount of risk.

H7: The perceived impact which external stakeholders have on the work of medical practitioners varies among physicians.

H8: Patients are treated sub optimally by their physicians because of economic reasons.

H9: Doctors’ decision making is in line with what had to be expected under the assumption of the homo oeconomicus. Physicians rank their own utility higher than the utility of their patients.

H10: Altruism and money are not the single most important motivations behind doctors’ work.

These hypotheses will be tested by means of an empirical study in the form of interviews with ten doctors who posses their own practices. The empirical study has as its purpose to clarify the extent to which the expected economic decision making behavior is in line with the observed behavior of doctors.

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