German Funds Face Deficit For 1996

german public-sector health funds face a 3 billion Deutschemark ($2.03 billion) deficit in 1996, says the federation of industrial health funds, after a "drastic increase" in health spending. Federation managing director Wolfgang Schmeinck says higher premiums will probably be needed in 1996.

Fund spending per member rose 6% in the west and 16.5% in the east in first-half 1995, against a 2% rise in western basic wages and an eastern rise of 5.5%. drug spending rose 9.5% in the west, which Mr Schmeinck says is causing concern. Eastern drug spending rose 23%.

However, hospital spending is said to be the main reason for the rise in fund spending. Eckart Fiedler, director of the federation of supplementary funds, says these funds show first-half 1995 deficits of 750 million marks in western germany and 209 million marks in the east, compared to first-half 1994 surpluses of 782 million marks in the west and 92 million marks in the east. Hospital spending rose 6.2% in the west and 14.8% in the east in first-half 1995, accelerating in the second quarter.