German Doctors "Prescribe Too Much"

The German health service is too costly and needs reforming, says anOrganization for Economic Cooperation and Development report. Health spending now takes about 10% of Gross Domestic Product and, even excluding the high costs of German reunification, the volume of health spending relative to GDP is high by international standards. This ratio has also tended to grow faster than in the OECD areas as a whole.

Health spending per head is high, even allowing for Germany's relatively high per capita income. The report says total health spending drifted up relative to GDP through the 1980s but surged to over 10% of GDP in 1991 and 1992 with the incorporation of the new eastern states. While the current health reforms constitute a step in the right direction, incentives are lacking to encourage doctors and other providers to be more economical, it says.

A central criticism is that German doctors prescribe far too many drugs compared with other countries. The report says the system must have sufficient built-in controls to prevent this happening. Savings can also be made by lifting the ban on the creation of pharmacy chains or groups, so that central purchasing can help cut costs.