Safeguarding the Future with Evidence-based Medicine

Health Economics Expert Professor Reiner Leidl on New Healthcare Financing Options in Various Country Contexts

May 20, 2015

The need for medical technology is increasing globally while the financial pressure on healthcare systems continues to grow. This means that, in addition to new forms of financing, the focus is shifting toward evidence-based medicine. 

About Reiner Leidl

Reiner Leidl is Professor of Health Economics and Health Care Management at Ludwig-Maximilians-Universität (LMU) Munich, Germany, and Director of the Institute for Health Economics and Health Care Management at the Helmholtz Center Munich, the German Research Center for Environmental Health. After studying economics, he headed up the Department of Health Systems Analysis at the Helmholtz Center Munich until 1992, followed by chairs in health economics at the University of Limburg in Maastricht, the Netherlands, and at the University of Ulm. In 2003, he became a professor at the School of Management, LMU, and director of the respective institute at the Helmholtz Center. At LMU, he is coordinator of the Munich Center of Health Sciences, an innovative research unit including a range of departments for quantitative research. He is currently Chair of the German Association of Health Economics.

The replacement of outdated and the acquisition of new technology is a problem in many countries. Do you see any innovative solutions to this?
Leidl: When some of the existing equipment becomes outdated, there is obviously a need to replace it. I think, however, that this is an oversimplified way of looking at things. What’s important is the role of medical technology in future care and which kind of investment is required to achieve this. That puts the focus on the patient and thus the medical benefit of this technology.


Which factors will influence the demand?

Leidl: The entire world is aging. Therefore, we can assume that the needs for medical technology will also continue to grow. Health insurance and social security systems and, consequently, new options for financing healthcare are being developed in a number of countries. However, the aging population will also decrease the financing base. This intensifies pressure to finance only efficient and cost-effective forms of care.


What role does technological progress play in this?

Leidl: Diagnostic methods are improving and allow even more precise monitoring of the treatment. The use of imaging procedures in personalized medicine is increasingly being considered. This could also have consequences for healthcare needs. I see a lot of potential for developing the benefit of these technologies for the patients.


Is evidence-based medicine the next challenge?
Leidl: In the pharmaceutical industry, benefit-oriented management of healthcare has established itself globally; now, the institutions responsible for regulating it are also looking at other areas of healthcare. It is a challenge that medical technology manufacturers and users should be aware of.


The costs can be stretched by leasing or renting the equipment. However, hospital financing laws can be restrictive in countries such as Germany. Leasing payments are a burden on hospitals' ongoing cost calculations. Do you see any possible solutions to this?

Leidl: Financing approaches such as leasing or renting are a step in the right direction but still not sufficient. The solution lies in including investment costs in hospital reimbursements. If this is implemented, then the money for investments – and, in turn, for the medical technology that is required – will follow the patient. Various new financing models could then also be used.


What do you think about the trend toward mergers and acquisitions of hospitals? This can be seen, for example, in the United States and even in Germany.

Leidl: New reimbursement systems have significantly increased the economic and competitive pressure on hospitals in many countries in the last few years. Company groups can achieve improvements in cost and quality through specialization, organizational advantages, or outsourcing, and supply care more efficiently. At the same time, mergers involve several risks that can be substantial. The success of mergers must therefore be reviewed on a case-by-case basis and for one particular healthcare system.


About the Author

Barbara Ritzert headed the department for media and public relations at the Society for Medical and Pharmaceutical Studies (MPS) and has worked as a science editor at Münchener Medizinische Wochenschrift (MMW). Furthermore, she has worked for national newspapers, magazines as well as radio and television stations for many years.

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