Private health insurance & pharmaceuticals: Strong team for innovation

Every year, the SPD, the Left Party and the Greens call for a citizens' insurance policy. As arguments, they cite the dismantling of "two-class medicine" and equal benefits for all insured persons.

A serious counter-argument is the role of private health insurance as a driver of innovation in medicine. Read more about what pharmaceuticals have to do with this and how private health insurance drives innovation here.

Which medications does private health insurance pay for and what does the public health insurance pay for?

In order to understand the role of private health insurance in medical innovation, it is first important to know the status quo in the financing of pharmaceuticals.

• Reimbursement in private health insurance: Medicines are paid for if they have been prescribed by a doctor or dentist as medically necessary, are recognized by conventional medicine and are available from pharmacies. The scope of reimbursement depends on the individual private health insurance tariff of the insured person.
• Cost absorption in public health insurance: For prescription medications prescribed by a doctor, those with public health insurance must pay a co-payment of ten percent, but at least five euros. Non-prescription medications are usually paid for entirely out of the patient's own pocket.

Why does private health insurance pay more medication costs than public health insurance?

In public health insurance system, the principle of economic efficiency applies. This means that medical treatments and medications must be sufficient, appropriate and economical. For this reason, public health insurance system cannot reimburse many services, and for other services there are only fixed amounts. The co-payments for medications and various services are intended to provide additional financial relief for health insurance funds.

In contrast, the following applies in private health insurance: Medical services are always reimbursed if they are medically necessary. The reimbursement of costs for your health therefore depends primarily on whether a treatment method is scientifically recognized and suitable for curing or alleviating your illness.

Who pays for new medications?

Does private health insurance pay for medications even if they are still new? Yes! A recent study by the Scientific Institute of Private Health Insurance (WIP) found that private patients receive new medications more often than those with public health insurance. (1) In addition, they are prescribed original preparations more often, while more generics are prescribed in public health insurance system.

How does private health insurance make medications available to their insured community more quickly?

People with private health insurance have faster access to new medications because the two insurance systems have different regulatory frameworks. In public health insurance, for example, there are numerous control instruments to prevent excessive increases in the cost of medicines. WIP head Dr. Frank Wild explained in an interview with the PKV association: (2)

"Since these instruments are still being adapted in the case of new medications, physicians usually adopt a wait-and-see approach when prescribing to public-insured patients in the first few years. In addition, new medications are also usually more expensive than older preparations, so economically motivated controls are more likely to take effect."

In private health insurance, on the other hand, the hurdles for reimbursement of new medications and innovative treatment methods are very low. As long as there is a medical need, new medications as well as examination and treatment methods are reimbursed.

Since physicians enjoy a great deal of freedom in choosing a suitable therapy for privately insured persons, the focus is always on the person to be treated when deciding on medical necessity.

How does private health insurance promote medical innovations?

Even if insured persons in private health insurance get medications prescribed much faster, in the end all insured persons in Germany benefit from this. This is clearly demonstrated by the example of oncological medications - medications used in cancer medicine.

However, private health insurance is not only a door opener for innovations in the field of pharmaceuticals. In outpatient care, too, private health insurance often reimburses medical innovations much earlier than public system.

3 reasons why private health insurance is a driver of innovation:

• Private health insurance promotes digitization to a special degree: Private health insurance company's Heal Capital innovation fund is the springboard for digital health applications in healthcare. It drives digitization in the German healthcare system.
• Private health insurance policyholders are investors: With their premiums, privately insured persons make a major contribution to the high quality of medical care. In 2019, thanks to privately insured persons, the healthcare system in Germany had 12.73 billion euros more at its disposal than without private health insurance. The additional revenue is an important basis for investments in the healthcare system.

• Private health insurance complements the public system: The differences between private health insurance and public health insurance can be viewed positively. This is because the pioneering role of private health insurance in the reimbursement of new medicines also benefits public-insured persons with a time delay. Both systems complement each other and ensure that everyone in Germany enjoys an excellent supply of high-quality medicines

Dual system secures pioneering role

Even if not everyone can or wants to take out private health insurance, private health insurance plays an important role in terms of medical progress in Germany. With the introduction of citizens' insurance, a major driver of innovation would be lost.

Quellen:

(1) Jacke, Christian O./ Hagemeister, Sonja/ Wild, Frank: Arzneimittelversorgung von Privatversicherten 2020: Zahlen, Analysen, PKV-GKV-Vergleich, Berlin: Medizinisch Wirtschaftliche Verlagsgesellschaft.

(2) Betz, Christina/ Härtel, Patrick/ Wegner, Jens: Was uns bewegt, 2021, www.pkv.de/verband/presse/meldungen-2021/privatversicherte-werden-ueberproportional-mit-neuen-medikamenten-versorgt/ (abgerufen am: 11.10.2021).

(3) Verband der Privaten Krankenversicherung e.V.: PKV ist bei Arzneimitteln Türöffner für Innovationen, www.pkv.de/verband/presse/meldungen-2020/pkv-ist-bei-arzneimitteln-tueroeffner-fuer-innovationen/ (abgerufen am: 11.10.2021).

(4) Walendzik, Anke/ Abels, Carina/ Wasser, Jürgen: Umsetzung neuer Untersuchung- und Behandlungsmethoden, Berlin: Medizinisch Wirtschaftliche Verlagsgesellschaft, 2021.

(5) Wissenschaftliches Institut der PKV: Neue WIP-Analyse "Mehrumsatz und Leistungsausgaben von PKV-Versicherten - Jahresbericht 2021", 2021, www.wip-pkv.de/de/oeffentlichkeit/pressemitteilungen/detail/neue-wip-analyse-mehrumsatz-und-leistungsausgaben-von-pkv-versicherten-jahresbericht-2021.html (abgerufen am: 11.10.2021).