Germany’s healthcare reforms: A new era for investors and digitalization

Understanding investor-owned medical care centers

In Germany, investor-owned medical care centers (iMVZ) have been a focal point of political discussions for years. Recent debates have centered around potential regulations aimed at increasing transparency in the ownership of these centers and ensuring that funds are utilized appropriately. Proposed measures, while not as stringent as earlier suggestions such as geographical restrictions or outright bans, indicate a shift toward a more regulated environment. These developments suggest that, from a legal perspective, investing in iMVZ could still be a viable opportunity, contingent on how future legislative processes unfold.

Hospital reform and its implications

The previous legislative term saw the initiation of significant hospital reforms, which the new government aims to finalize by mid-2025. These reforms are set to overhaul the existing remuneration system for hospitals, transitioning from a flat-rate fee structure based on diagnosis-related groups (DRG) to a model that compensates hospitals for maintaining specific services. This shift will categorize hospitals into defined service groups, determining the range of services they can provide. Notably, there will be room for adjustments based on federal state regulations, with the new system expected to be fully operational by 2027 after a three-year convergence phase. This change is likely to reshape hospital planning and regional healthcare strategies fundamentally.

Digital transformation in healthcare

The German government places significant emphasis on the digital transformation of its healthcare system, as highlighted by the establishment of a dedicated federal ministry for digitalization. This initiative builds upon previous efforts like the rollout of the electronic patient file (Elektronische Patientenakte) and aims to enhance telemedicine, digital solutions, and data interoperability. Plans include substantial investments in the digital infrastructure of hospitals and clinics, as well as the integration of AI in treatment and documentation processes. For investors, these advancements present exciting growth opportunities, particularly in telemedicine, AI, and connected health devices. With a fragmented digital health ecosystem, the potential for Germany to emerge as a leader in HealthTech is increasingly promising.

Enhancing Germany’s pharmaceutical landscape

In recent years, Germany has enacted several measures to bolster its appeal as a hub for pharmaceutical research and production, driven by its pharmaceutical strategy and the German Medical Research Act (Medizinforschungsgesetz). The current government is committed to continuing this trajectory, aiming to position Germany as a leading center for innovation in pharmaceuticals, active ingredients, and medical devices. The establishment of a national biobank is part of this strategy, supporting initiatives in preventive, precision, and personalized medicine. The success of these reforms hinges on the government’s ability to provide sufficient incentives for pharmaceutical companies to expand their operations in Germany.

Financial sustainability of the statutory health insurance

Ensuring the financial sustainability of statutory health insurance (SHI) without raising contribution rates is a key priority for the new government. Although specific measures are not detailed in the coalition agreement, there are plans for an expert commission to propose solutions by 2027. The government aims to balance increased revenues from higher employment with reduced expenses, ensuring a stable financial future for the healthcare system.

Future of the AMNOG procedure

The coalition agreement also outlines plans to refine the AMNOG procedure for assessing new pharmaceuticals. This refinement aims to secure access to innovative therapies while maintaining cost efficiency. There’s a focus on linking the additional benefits of new treatments to the reimbursement amounts from the SHI, which may heighten cost pressures on pharmaceutical companies. These changes could significantly impact the market dynamics for new therapies.

Cannabis legalization and local pharmacies

While the previous government legalized cannabis partially, allowing private consumption and home cultivation, the new administration appears to take a cautious approach. The coalition agreement suggests a review of the law in autumn 2025, with further legalization unlikely. Additionally, there are plans to strengthen local pharmacies by increasing their remuneration and enabling cash discounts from pharmaceutical companies. Efforts will also be made to harmonize regulations between local and mail-order pharmacies, though the prohibition on third-party ownership remains intact.

Monitoring implementation and future opportunities

Despite the coalition agreement addressing several vital issues within Germany’s healthcare sector, some aspects remain ambiguous. The proposals primarily outline legislative intentions rather than specific projects. Consequently, the real impact of these agreements will depend on how effectively they are implemented and the priorities of the upcoming Health Minister. Stakeholders in the healthcare sector are encouraged to stay informed and ready to capitalize on emerging opportunities as the government moves forward with these initiatives.