How did Germany become the digital health leader?

When Jens Spahn became the health minister In March 2018, Germany quickly became the European Northern star of accelerated healthcare digitization. What exactly happened?

Germany is one of the European countries with higher healthcare expenditures. 11% of GDP goes to healthcare compared to 9.6% European average. Patients can be covered under public health insurance, or if they earn more than 5000 euros monthly, they choose from private health insurance providers. Health insurance is mandatory but competitive as there are around 100 health insurance companies on the market. With €387 billion spent on healthcare in 2018, Germany until recently had one of the lowest digitization levels among developed countries.

The shift in political will

"Germany was actually one of the First Nations worldwide to set up a specific institution to foster the digitization of the German healthcare system. That was already in 2003, with the institutions called Telematik. This was a joint institution of health insurance companies, the physicians, and the clinics. It involved all key stakeholders, and back then, everyone was ready to digitize," says Henrik Matthies, Managing Director of Health Innovation Hub, which serves as an advisory body on digital health to the ministry of health.

Members of Telematik all agreed on basics but lacked consensus on actual change. Henrik Matthies: "Some of them also understood that digitization of the entire healthcare system would bring transparency, which was not necessarily in everyone's interest, despite the fact that monitoring the performance of the healthcare system is meant to work for the benefit of the patient's health and safety. Long story short, it took 15 years until 2018 for digitization to move in the right direction, and that is, in fact due to one person, and that is the German Minister of Health Jens Spahn.

What makes Jens Spahn different?

Jens Spahn became the health minister In March 2018. In April 2019, the government established health innovation hub - a kind of advisory body to the ministry of health serving as a neutral platform for exploring possibilities of digitization and developing ideas for digital transformation. Several laws were put in place under the new minister: in November 2019, The Digital Supply Law (DVG), was passed and gave doctors the power to prescribe digital health apps to patients, which can be reimbursed by the country's statutory health insurance. Germany also plans to bring in electronic health records (EHRs) for patients with statutory insurance by 2021.

So what is Jens Spahn doing differently to enable all of these changes?

Henrik Matthies attributes the minister's success to timing and to minister's personality. "Until 2018, everyone had understood we were completely falling behind other leading Western nations, which caused the German healthcare system to be significantly worse than it should be and could be. The second, more important factor is that Jens Spahn is someone who is willing to go into conflicts."

The German Minister of Health historically has a more in a moderator role, says Henrik Matthies. The stakeholders themselves are taking most of the decisions. The ministry is mostly giving basic directions. This also caused lack of progress under the three health ministers prior to Jens Spahn.

"In the first couple of months of being the minister, Jens Spahn went into a lot of conflicts. The reactions, in the beginning, were quite hostile, to be honest. Whenever he was in a public conference or similar, people were really not welcoming him. Interestingly, this changed over the past two years. On the one hand, his ministry passed one new healthcare law every single month. That is completely unprecedented in our history, but Jens Spahn made sure that he's serious about digitizing the German healthcare system. This continuous flow of laws kept everyone busy and also prevented too much opposition from the traditionals. Germany still doesn't have a secure data infrastructure for healthcare data, but something the telematic infrastructure, which is a kind of basic secure internet infrastructure. It was not adopted by the majority of physicians, not even talking about clinics and pharmacies." Then, in 2018 Jens Spahn made sure there was a financial incentive to use it. "And suddenly, this massive block of opposition started to distract themselves. The vast majority by now switched to this safe infrastructure to exchange data. This is just one example of very Jens Spahn used the carrot and stick approach to reform this super rigid, traditional paper based healthcare system in Germany."

Prescription apps: available

Even before the current minister, healthcare startups could negotiate reimbursement but they had to do that with each health insurance individually. The difference now is that if an app is approved, it needs to be reimbursed, if a doctor prescribes it.

The government established a framework called Diga fast-track, where digital health products, which are certified as medical products and are fulfilling a few criteria, can apply for market access. If they get it granted, they have access to the entire German statutory healthcare market. The criteria are not necessarily easy to fulfill, says Henrik Matthies, and the question of pricing this solution is still open. "There is an understanding even in the health insurance world, that we have to have fair prices on digital products to make sure that the companies can not only survive, but continuously improve on those products," says Matthies.

Germany and Berlin, Startup heaven?

While the German market is opening up to innovation adoption at a fast pace, the support for startups has quite a few years long history. Most obviously, Bayer's Grants4Apps later renamed to G4A was founded in Berlin in Bayer's headquarters. International chain of accelerators Startupbootcamp ran a digital health program in Berlin. Currently, Vision Health Pioneers, a startup incubator supporting pre-seed startups and offering equity-free funding of up to 72,000 Euro per team, is among the more visible players. It is a publicly funded project for which the Berlin government invested 1.5 million euros to help young entrepreneurs.

Maren Lesche, the head of incubation at Vision Health Pioneers, has been living in Berlin throughout the transformation of the city into one of Europe's busiest digital health innovation hubs. As she describes, Berlin has a long history of Pharma and health, which makes it quite natural for thee traditional companies to have had merged with the healthcare ecosystem. Berlin is an appealing place for international entrepreneurs who come to Berlin as a hub to scale across Europe.

The drive for innovation and the political will are present. However, that does not necessarily make innovating in healthcare easier. Maren also warns that the new regulation does not necessarily mean solutions will get adopted. "In the end, I think it's the end user that decides if a solution is good or bad. All the startup companies included in Vision Health Pioneers need to have a team member with a clinical background. Suppose you're not dealing with the problem on a daily basis. In that case, if you only see it from the patient perspective, and not from the doctors or especially therapists and nurse perspective, it's hard to understand the problem because the system is very, very complex."

Will doctors really prescribe apps?

Dr. Maike Henningsen is medical doctor who specialized in OBGYN, oncology, endocrinology, and reproductive medicine. She is Head of Medical Business Strategy at Vision Health Pioneers but partially still works in the clinical practice and is involved in several other innovation projects.

Looking at the digital health improvements from the doctor's perspective, she still misses the inclusion of medical professionals in the German digitization story. "When I work in clinical practice, I see 50 to 60 patients in one day. So you can imagine if you really see sixty patients a day, and on the side check results, do phone calls... When could you find the time to think about digitalization? I think what is missing in the current discussions is how can doctors be included in the change? I think Jens Spahn has a very progressive approach, which I really appreciate. But on the other side, he paves the floor mostly for other players than healthcare professionals. You see people from the industry, and you see app providers, people who might not have deep medical knowledge. "

Maike also warns the app/user fit is often not quite clear yet. And then the third question is - who reimburses the doctors to prescribe apps? "Often, the apps providers don't address these questions. How can we fit in? How can our solution be implemented? We see some very good solutions, which are already implemented, and which take away some work from the people. Those apps can make it. Other apps, maybe not. Not because doctors would lack interest or time, but simply because some of these apps are just not implementation friendly."

Continuous change involves continuous fresh perspectives

To decrease the chance for failed digital health and healthcare IT projects, the current government established the already mentioned health innovation hub. While it does not have any direct decision-making power, it indirectly influences decision making on the governmental level.

"We are a quite unconventional group of people. We have a team of 12 experts, all with long-standing experience in a specific field of healthcare. And thus, if we together come up with a concept, the chances that it can be executed are very, are very high. So when the government plans some fundamental changes, they actively approach us, and the same is true for the physicians, pharmacies, and health insurance companies. No one is obliged to work with us. We had just existed for in total, two and a half years. But we get requests almost every day now by those various stakeholders of the German healthcare system, who understood that we can enable change, and we make sure that all those changes are in line with the rules."

An important characteristic of the health innovation hub is, that it will exist in a very limited time frame. This gives the team additional motivation to change the system to the better to the largest extent possible. And based on the current successes, Henrick Matthies believes the progress made today will not get to a halt again even after the health innovation hub is gone. "We will only exist until 31 December 2021. Until then, we will do our very best to fix all the deeply rooted challenges in the system. I believe by now; everyone has understood that we need changes urgently. I also believe that the next government is going to have a similar institution set up afterward. It's also very crucial to us that it's not the same team. We need fresh blood, we need new perspectives, you probably also need different competencies than the ones we have. You continuously need to get new fresh perspectives to make sure that the change is continuously happening."

Tune in for the full discussion:

How did Germany accelerate the speed of the digitization of healthcare? (Henrik Matthies, Maike Henningsen, Maren Lesche)