Health care insurers and other organisations paying for health care 


Health care is differently organised in different countries. I will focus on the German system in this blog. 


How is this group defined?


The term “Krankenkassen” is used to describe all insurers for health care operating in Germany. There are two different groups operating in parallel: The so-called “gesetzliche Krankenkassen” (GKV) which are the providers tasked with the mandatory health insurance everybody with a job has to subscribe to. They cover the whole family even if there is a single job-holder in a family of 10. The monthly premiums are based on a percentage of the income and not on the number of persons insured. Therefore, this model is called a solidarity community where the more affluent pay for the less well off. On the other side there are private health insurers (PKV) that operate on a different model. Here the premiums are determined solely by the age and (initial) health status of the individual insured and each family member needs a separate contract. This is much cheaper for individuals than public insurance but adds up dramatically for families. On the upside private health insurances cover a wider range of treatments and medications than public insurances. However, there is a minimum wage level to be eligible for opting out of the public system and entering the private system. 


What are the major roles of this group in personalized medicine?


The GKV has a central umbrella organisation called “GKV Spitzenverband” which takes care of the major issues of all GKVs. This includes negotiating prices for medical services with the GKV-registered MD associations, fixing the pricing on medical services in the whole country. The same goes for drug reimbursements, where pharma industry is legally bound to reach an agreement with the GKVs. There are number of other topics also covered by the GKV umbrella organisation including negotiations about the services covered by the - also mandatory - nursing care insurance. 


In summary the GKVs and PKVs are the stakeholders shelling out the vast majority of the money to cover health care expenses in Germany and they were armed by the legislation with negotiation powers to control health care costs at least in part (they have to negotiate with Pharma and the MDs, they cannot dictate pricing).


Fig 28: Health care Insurers


What is the major impact of this group on the development of personalized medicine?


 Of course, their decisions which services and drugs to cover and to which percentage (not always 100%) has a great influences both on pharma developments as well as which treatment regimes MDs will focus on. GKVs are legally bound to insure coverage of almost the whole population of the country and also to cover adequate and state-of-the-art treatments. However, they have developed their own elaborate procedures to define what adequate and state-of-the-art means. Their feedback to the politicians in heard because the state must pick up any costs the health public insurers cannot cover on their own. Thus, they are the main deciders what kind of health care is available to the general public. 


With whom has this group the most important interactions?


Pharma industry, MD-organisations, hospitals and hospital groups, are the mandatory partners which which the GKVs and the PKVs have to interact constantly. The health insurers get their directives from the parliament in form of specific legislation and they lobby the politicians to expand their financial means and decision powers. 


What is required of this group to further the development and application of personalized medicine?


Personalised medicine by definition is a field where there are no large-scale statistically significant study results on the efficacy of drugs and treatments. Currently, health insurers approach this field by issuing individual agreements to cover special costs for personalised medicine treatments, patient by patient. or in limited pilot studies (e.g. the Cologne model).  While this natural limits the number of patients that are eligible, I was told by some leading MDs that so far requests by MDs for personalised medicine for individual patients are usually granted.


This is the only way to gain a sufficient database of efficacy of personalised treatments in retrospect as success and followup data for more and more cases is documented. In the end, health care insurers are bound to restrict the increase in overall costs as the state only kicks in in acute emergencies. By and large the GKVs have to manage within their budgets. Therefore, there will always be a balance between newer and more expensive treatments and drugs and the requirement to limit treatment costs - not individually but in general. 



What’s coming up next?


Next week I will focus on the money side of heath care, especially the cost for personalised medicine and the money saving potentials.

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