Does Germany's election result herald a more peaceful period for healthcare providers and investors?

With the Christian Democratic Union and its Bavarian sister party (CDU/CSU) securing 28.6% of the vote and Friedrich Merz appearing likely — although by no means certain — to form a coalition with the previous lead party of government the Social Democratic Party of Germany (SPD), there are signs that healthcare investors and providers can look forward to a more peaceful period than under the previous government.

The outgoing Health Minister Karl Lauterbach was known for his ambitious, energetic, and sometimes controversial reform agenda. 

His shelved MVZ (Medizinische Versorgungszentren or Medical Care Centres) reform, which would have significantly restricted private investment in outpatient facilities, had created considerable uncertainty for both healthcare investors and operators. That particular storm cloud for investors has now likely passed — certainly in that incarnation. 

Truth be told, regardless of the leading party in a coalition, such reforms were unlikely to make it through parliament. Officially shot down by the SPD’s coalition partners the Free Democratic Party (FDP), HBI was at the time told off the record by somebody close to the matter that Lauterbach was possibly told by his Chancellor to drop the onerous restrictions on private investment or face the boot. If anything akin to the MVZ reform were to reemerge in the future, it will be in a more realistic form.

The CDU manifesto meanwhile anticipates a preference for evolution over revolution, with the party promoting itself as peacemaker: "We will bring about a change in mentality in health policy: working together and not against each other is the order of the day." It is hard not to read this as a pointed comment at the enthusiastic, some might argue pugilistic, approach of the outgoing health minister.

With coalition talks ongoing, it seems likely that the new minister (who is of course yet to be confirmed with a government yet to coalesce) will be more receptive to private investors and insurers.

We were told in today’s HBI lead story, by Dr. Kristian Koch, Head of the Business Unit Clinics & Hospital Germany at Medicover, that “The new government will face a huge challenge with rising deficits in the public healthcare system. It would be wise for the government to remain open to private investments in healthcare and infrastructure… both the CDU/CSU and SPD have health policymakers who understand the value of a diverse range of investors in the system.”

That is not to say that there are no further reforms on the horizon — the CDU has itself promised changes in digitalisation, improved interoperability between inpatient and outpatient providers, and amendments to Germany’s financing models for the care sector. Healthcare insiders such as Koch also anticipate some appetite for reform of private reimbursement fees. 

Nonetheless, a CDU-led government, and a new minister, will be certain to follow a more sympathetic approach to private insurers and investors.

For healthcare executives, this shift promises a more predictable planning horizon. The CDU explicitly reaffirms Germany's dual insurance system — Lauterbach was understood to be unsympathetic toward private insurers — while promising to "correct misallocations resulting from the hospital reform" and "prevent a cold structural change in the hospital landscape”, indicating measured adjustments and a walking back of past changes, rather than wholesale transformation. The new government will likely focus on implementing existing reforms effectively before launching bold new initiatives.

Some might argue that what Germany's healthcare system needed was a period of disruption followed by stability — the push of Lauterbach's reforms, followed by a more measured implementation. While the previous minister's ambitious agenda certainly tackled some long-overdue changes, the more collaborative approach signalled by the potential incoming coalition, with its receptiveness to a more diverse set of investors, may help embed the new reforms while providing a more predictable horizon for sector participants.