As part of the Statuary Health Insurance Modernization Act in 2003 in Germany, all statutory health-insured citizens had to pay a contact fee (“Praxisgebühr”) of 10 EUR per quarter when visiting family doctors from 2004-2012. Not only would this relieve the short-term financial burdens of statutory health insurance companies at the time, it would also reduce the moral hazard effect in the German health care system. In Germany, many insured citizens only pay a very small price or nothing depending on the insurance contract for health services. Citizens develop “buffet” behavior in health care, i.e. to get as much possible value for the monthly insurance payment (Bohmsen, 2011) and use more health care services than needed because their insurance companies pay the costs. With the introduction of contact fees, the number of people consulting physicians for trivial reasons and the amount of unnecessary services used should decrease given an increase in citizens’ cost awareness for health services. Also, many people in Germany visit specialist doctors whose costs are comparably high without consulting the family doctor first if it is necessary. With the contact fees, patients would have to go to the family doctor first to get a transfer to the specialist if absolute necessary to avoid costs.
However, contact fees did not mitigate the moral hazard effect. Although in 2004 the number of people visiting the family doctor dramatically decreased, the overall number of people visiting the doctors decreased by only 2-5% (Schreyögg & Grabka, 2008). This may be due to adaptation, i.e. people shifted their visits to the quarter in which they had paid their contact fees (Bohm, 2010). Also, there is no significant evidence that less unnecessary health services were used, since only those citizens who frequently visited the doctors or who are chronically sick visited the doctors less. Furthermore, the number of visits to specialist doctors increased (Reiners & Schnee, 2007). While the number of people directly visiting specialist doctors decreased, the number of people visiting specialist doctors through a transfer had significantly increased. Contact fees also exacerbated the income effect in health care. Many people in low-income groups are characterized as worse off in health. With the introduction of the contact fees, fewer people in these groups were able to visit the doctors increasing this effect (Bohmsen, 2011).
As is seen in the case of Germany, monetary incentives like the Praxisgebühr still lead to “buffet” behavior for health services and even negatively impact low-income groups. Going further, any kind of monetary incentive may cause low-income groups to be excluded from proper health care services. A model to pay a 5 EUR fee per actual contact has been discussed which might lead to lower overall use of health services (Bohm, 2010; Bohmsen, 2011). Yet this model is still implemented at the expense of low-income groups. Illnesses that need recurring doctor visits may exclude low-income groups from the treatment. Additionally, a model in which you pay for health services “a la carte”, i.e. paying per procedure, may also be implemented to decrease the amount of unnecessarily used health services – yet still at the expense of low-income groups. Many low-income groups may not be able to afford health care altogether. So are monetary incentives the best solution to moral hazard when in reality they negatively affect those people who need it the most?
Johanna Micus #1234
Bohm, T. (2010). Adverse Selektion und Moral Hazard im Krankenversicherungsmarkt: Problemdarstellung, Lösungsansätze und empirische Evidenz zur Praxisgebühr. GRIN Verlag.
Bohmsen, G. (2011) Grandios gescheitert. Süddeutsche Zeitung. Published December 2011.
Reiners, H., Schnee, M. (2007). Hat die Praxisgebühr eine nachhaltige Steuerungswirkung? Bertelmanns Stiftung, Projekt: Gesundheitsmonitor.