Institutionalized healthcare reform in Germany? Error correction or political strategy?

VerfasserPannowitsch, Sylvia

1 Introduction

Following the implementation of the current German healthcare reform (Statutory Health Insurance Competition-Strengthening-Act (1)), there have been many comments and newspaper articles criticizing parts of the reform; for example, the central health fund. Critics claim that this section of the reform is incomplete, and that it is, perhaps, designed to be transformed into a system preferred by the next ruling-party. Even though this is an extreme example, we can find countless other instances, in which a reform seems to have been designed in order to be completed by a following reform. So, against this background of broad reform activity in German healthcare policy in recent years, (2) some authors speak of an "institutionalized reform", without having a clear definition, instead of separate, clearly-defined, reforms. Every single reform seems to be only one step, which is not developed in order to complete the reform process, but is, instead, expected to be advanced to a further stage in the next reform. There are two possible explanations for this: either the reform is planned incorrectly or as a learning system and has to be adjusted, or the new reform is the result of the actors' inability to achieve the reform they initially wanted, and with a 'step by step' strategy, they intend to achieve their aims in a second or third try.

This inability to implement the intended reform can result from the complex veto player structure in the German healthcare system, (3) especially when veto player action is caused not just by the existence of rational win-sets (4), but also by power-political, strategic or vote-seeking and office-seeking reasons. And, if winsets are under-utilized or not established at all, this can make fundamental decisions impossible or unacceptably protracted. According to George Tsebelis, a veto player will make his acceptance of a decision conditional on the existence of a contentual, objective policy win-set, which suits his preferences more than the status quo. But, in reality, a veto player often comes to a decision not because of contentual reasons, but because of power-struggle, party political or vote-seeking ones. Veto player exclusion, as far as possible, can be a reaction to reduce the decision-making costs, but very often this will lead into an extension of the implementation costs, where the excluded veto players may develop their power again. (Hence, reforms sometimes do not tend to change policy at first, but to destroy or weaken veto player structures.)

The general aim of the paper is to develop a definition of an 'institutionalized reform', in order to assess whether or not there are institutionalized reforms underway in German healthcare policy, and what are the reasons for this. Contemplating the policy process from the view of continuity will help to make the actors' behavior, as well as policy results, more explainable.

The analysis will consider three different German healthcare reforms. After giving a short historical overview on their development, the position analysis of the involved actors (veto players) will play the main part in verifying the thesis that a reform institutionalization is taking place, and to identify the reasons for this development. Here the focus is primarily on the importance of veto players.

2 Definition of "institutionalized reform"

Despite the fact that some authors use the term "institutionalized reform" without providing any definition, I want to develop a clear definition, based on the separate meanings of "institutionalized" and "reform", before I proceed to adopt the full term, "institutionalized reform", in my paper.

Even if concepts of long term change mention general aims of health care policy in Germany,--such as the efficiency principle (5), the change from corporatism to more competition (6) in regulation, as well as financing and service provision and stronger state regulation (7) for reforms (all of which have been established since the 1990s)--these concepts always mention a change of a universal aim, and not the development of certain reform ideas in many reform steps. These concepts explain the absence of fundamental structural reforms, but not the fragmentation of even small reform aims into different steps.

In trying to find a definition for ?institutionalized" against the back-ground of the discourse about institutionalization and institutionalism, a huge field of possibilities opens. In general, institutionalism can be understood as a process of formation or abolishment of institutions, whereupon the question about the definition of institutions occurs. It is not the aim of this paper to give an overview of the discourse, but rather to present the positive and useful aspects for this analysis.

According to Monika Csigo, institutions are composed of the following elements:

- they are adaptive on a continuing basis

- they are a guide for order in social relations

- they construct the framework for the actors' actions

- they define acceptable behavior and are accepted as legitimate

- they translate individual preferences into collective decisions

- they are integrated into hierarchical systems

- they are enforceable by sanctions

- they are affected by history. (8)

From these elements, Csigo defines a political institution as a formal control system, which is integrated into a hierarchical system on a continuing basis, and as a social-normative behavior pattern, which structures the interaction between individuals and politics or the economy. (9)

Thereby, she distinguishes between basic institutions, derivative institutions, organizations and policy-institutions. This paper concentrates on the policy-institutions that focus on problem-solving. These policy-institutions demonstrate principles (policy-core) and precise procedures, and, on this basis, the particular arrangement of a policy field is predicated and the solution to the social problems is developed. (10) Even if the problem-solving function is central for policy-institutions, they also have a mediation function, a disciplinary function, a valuation function and, in part, a symbolic function.

In contrast to this definition, the research group "Institutionalisierung in-ternationaler Verhandlungssysteme" (institutionalization of international negotiation systems) understands institutionalism as an agreement on a mutual problem perception and on rules and values of the problem-solving process with a persisting clash of interests and differences in resources of the autonomously negotiating partners. (11)

In conclusion, there seem to be two central aspects: the permanence and the formation of firm (negotiation) structures. Hence, reforms should be called "institutionalized" when permanence is secured e.g. by actors who use the step by step strategy and when negotiations run with a fixed set of actors, firm rules and behavior patterns.

To define "reform" is just as difficult. In general a reform is a process or result of efforts to change (a part of) political institutions, methods or state competences within a political system. One can differentiate between reforms that focus on modernization and course correction, or on a revolutionary system shift with changes in ownership and stakeholder structures, or on a socialistic change with long-running revolutionary implications, which changes the whole structure of the state. (12) The last two kinds of reforms are found less frequently and so the first one is the most common type of reform. This paper is in accord with this definition and adopts it for this analysis.

So, an "institutionalized reform" should be defined as an "on modernization" and "correction-focused" durable, fragmented process with a fixed set of actors, firm rules and behavior patterns for negotiations on a specific issue. Thereby the action is dominated by modification that tends to have the same direction and holds the same positions and interests, and which avoids any fundamental policy change.

This general definition can be used for various cases and has to be connected with a specific issue, depending on the policy field. In this case, a policy dimension can be added to the definition that defines the contentual aspect and the direction of impact. This policy dimension will help to identify the beginning and end of an institutionalized reform. The general frame of the beginning and ending will be set by the establishment or abolishment of a fixed set of actors and the possibility of predicting a continuation of the process. After a long-standing absence of action or a fundamental change in actors' preferences regarding an issue, the process could be considered as completed.

3 Set of Actors

Because the analysis takes place in the context of the German healthcare system, the examples as well as the set of analyzed actors are deduced from this policy field, and because the analysis is set against the background of the veto player approach, the first actors that will be considered are the institutional and partisan veto players (13), as long as they are relevant. The institutional veto players in Germany are the German Bundestag (Lower House), consisting of the partisan veto players of the government, the German Bundesrat (Upper House), consisting of the partisan veto players of the majority keeping federal states, and the Constitutional Court. But, because the Constitutional Court is not an active actor in the reforms being analyzed, it should not be included in the set of actors. Instead, some social actors should be included, because although these actors are just put under the heading "other veto players" (14) in the original veto player approach, the inclusion of them is very important, since, especially in German Health Policy, these actors have institutionalized power by their involvement in the self-government body. Therefore, the analysis will be concentrated on the care providers (Leistungserbringer) and cost purchasers...

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