German news media reported July 21 that the center-left government headed by Chancellor Gerhard Schroeder and the conservative Christian Democrat opposition had reached agreement on a wide-ranging plan to cut healthcare costs in the country that currently are said to be among the highest in the world. The agreement apparently paves the way for the legislative approvals needed to start implementing the reforms as of Jan. 1 of next year.

The agreed-upon reforms are aimed at cutting just under EUR 10 billion in costs next year, with annual savings rising to more than EUR 23 billion by 2007. State-paid healthcare contributions are currently around EUR 142 billion a year, but costs exceeded that by about EUR 2.5 billion last year. Because of persistent high unemployment, the German government has been forced to increase mandatory contributions from workers to subsidize the healthcare system.

The agreement announced last month aims for a cut in workplace healthcare contributions next year to 13.6% of a worker's gross pay from the current 14.3% average. The plan is for that percentage to drop to 13.3% in 2005 and 13% in 2006.

Speaking with reporters, Health Minister Ulla Schmidt said the proposed reforms "aim at spending every euro efficiently." She added: "We will get rid of many outdated structures."

The planned reforms also focus on what many have cited as antiquated rules that are protective of the traditional high margins for pharmaceutical companies. Among the changes are anticipated expansion of the retail pharmacy market, with pharmacies being allowed to have up to three subsidiaries rather than current rules that allow ownership of only a single drug store. It also would enforce price controls on certain patented drugs and would permit German residents to order medicines by phone or Internet, giving them access to lower prices in other European Union countries. Mail-order drug purchases are prohibited at present.

The cost burden on patients also will increase under the reform plan, to EUR 10 for quarterly doctor visits, and EUR 10 per day for hospital stays for a maximum 28 days per year.

Under the reform plan, patients will have to pay the full amount of private insurance for dental prostheses beginning in 2005, and beginning in 2007 will have to cover their own sick pay insurance.

An extra EUR 1 tax on packs of cigarettes also is proposed, to be levied in three stages beginning next Jan. 1.

GE proposal courts EC favor on deal

As part of its effort to win the approval of European regulators for its proposed acquisition of Instrumentarium (Helsinki, Finland), GE Medical Systems (Waukesha, Wisconsin) proposed that Instrumentarium's Datex-Ohmeda business sell its perioperative monitors to another company for a period of five years, with that company having exclusive rebranding and reselling rights to those monitors. A Reuters report out of Brussels, Belgium, where the European Commission is headquartered, cited an unnamed source described as being "close to the situation."

GE Medical has offered EUR 2 billion ($2.27 billion) for Instrumentarium, but the European Commission has raised objections to the deal, fearing it would give GE a stranglehold on the European perioperative monitor market. Such devices are used by anethesiologists during surgical procedures to monitor vital signs. As reported earlier in the month, GE also has agreed to sell Instrumentarium's Spacelabs division (Issaquah, Washington), which sells perioperative monitors in the U.S. The report out of Brussels said a company buying Spacelabs would get access to the perioperative monitors made by Datex-Ohmeda. The source said that because of the complexity of manufacturing a wide line of monitors, they would continue to be manufactured by Datex. The source also said that the expectation is that Spacelabs would be sold to some medical equipment maker not now active in Europe.

No agreement has yet been reached between the European regulators and GE Medical. The commission has set a deadline of Sept. 11 for a compromise to be reached.

Push to expand UK patient choice

UK Secretary of Health John Reid last month called for choice to be available inside the National Health Service (NHS) in order to create what he called "a genuinely personal service to everyone." In a wide-ranging speech given in mid-July to the New Health Network, Reid said that "for the last 60 years, here has been a two-tier health service in this country. One tier has been the National Health Service, where people traditionally have not been given the choice, and the other has been for those people with money who can buy the privilege and jump the waiting lists." Reid added: "I want to make sure that those two tiers do not operate for the next 60 years and that we give the same rights and privileges and choices to all NHS patients. By offering choice, patients will be given the chance to control their own destiny and can choose the hospital that best suits their needs."

Citing the success of pilot NHS choice programs to date, Reid noted that since the start of the cardiac care pilot program in July of last year and a pilot program of choice for cataract surgery in London last October, more than 6,000 patients have opted for faster treatment in another hospital, either in the NHS or the private sector. He added that beginning next summer, all patients who have been waiting more than six months for elective surgery would be offered the choice of faster treatment in at least one alternative hospital. Expanding on that program, Reid issued guidelines directing the NHS to implement the choice initiative for all patients who have been waiting for an operation for more than six months.

He said that within three years, all NHS patients will be offered a choice of treatment sites not just after six months of waiting, but at the point when the initial decision is made by their general practitioners (GPs) to refer them for treatment. Reid said that in order to make such decisions, patients would need access to "more information about the NHS than ever before." To support that effort, he said that by the end of 2005, "we aim to offer patients a choice of at least four different hospitals and each of the choices on offer will be backed up by detailed information, which will be on hand in the GP's surgery [office]."

Equipping GPs with the information and technology needed to help patients "exercise their choice at the point when a referral becomes necessary . . . will mean that all patients begin their journey through the NHS at exactly the same point and that we ensure fairness for all," Reid said. He added that the Electronic Booking Service "will allow patients and their GPs to choose and book both the hospital and the appointment time they prefer.

"We are now putting unprecedented investment into the NHS to increase capacity to help raise standards and reduce waiting times," Reid said. "The overall aim of our reforms is to turn the NHS from [a] top-down monolith into a responsive service that gives the patient the best possible experience."

EC accepts settlement plan

Antitrust complaints made by European blood banks over the pricing of hepatitis and HIV tests from Chiron (Emeryville, California) have been settled by European Commission acceptance of a settlement proposal made by Chiron and F. Hoffman-La Roche (Basel, Switzerland), its European licensee.

A complaint was filed with the commission by the German Red Cross Donation Service and Working Society of Physicians in October 2001, alleging that Roche's prices for its blood-screening kits were unreasonable and should be prohibited. Groups from the Netherlands, the UK, Finland and Luxembourg eventually joined in the complaint.

Chiron said last month that it resolved the complaints by modifying licensing agreements that allow Roche to use Chiron's technology in hepatitis C and HIV-1 blood-testing kits. The two firms promised to allow hospitals to buy a type of blood screening kit previously available only to physicians.