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Better funding model for Inpatient Hospice Units

Partner Institute: 
University of Technology, Berlin
Survey no: 
(14) 2009
Hoffmann, Christine . van Ginneken, Ewout . Busse, Reinhard
Health Policy Issues: 
Funding / Pooling, Benefit Basket, Access, Remuneration / Payment, Responsiveness
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no yes yes no yes


The previous financing model of inpatient hospices for SHI insured was problematic. Inpatient hospice units (IHU) were forced to acquire on average nearly 30 per cent of their budget from donations although only 10% was foreseen. In addition, terminally ill patients in the end stage of their disease were burdened with incalculable co-payments. Therefore, from August 2009, co-payments for patients in IHUs are no longer required and IHUs now receive sufficient funding from the sickness funds.

Purpose of health policy or idea


Inpatient hospice units (IHU) were established in Germany in the 1980s by the hospice civil movement which critized the care offered to terminally ill patients in the end stage of their disease. Patients were often treated with useless expensive medical technologies, which offered no chance of recovery but were often accompanied by unbearable suffering. This practice frightened many people. As a consequence public debate took place about the right of assisted suicide or at least about the right to decline treatments.


The hospice movement sees the hospice concept as an alternative to traditional treatment and assisted suicide. The hospice concept rather seeks to use palliative care and medicine to ease the symptoms as much as possible. In addition, hospices offer psychological and spiritual support not only for the patient but also for family and friends. To express this view, terminally ill persons are not called "patients" but "guests".


In the beginning IHUs were run by volunteers and financed from donations. To this day, there are volunteers working in IHUs and part of the funding comes from donations. Since 1997, inpatient hospice units are in principle covered by statutory health insurance. In 1998 the Bundesarbeitsgemeinschaft Hospiz (now: DHPV) and the sickness funds signed a framework agreement on a financing model for IHUs in which 10% of the IHU's budget had to be raised from donations. This was hoped to prevent profit-oriented providers from opening inpatient hospice units. It was thought that profit-oriented providers would not be able and willing to care for hospice guests according to the spirit of the hospice movement. In addition to this financial arrangement, working with volunteers should assure terminally ill hospice guests of social acceptance and support.


The financing of IHU came from multiple sources. First, the IHU had to fund a percentage of its budget. This amounted to 10% of costs for units for adults and since 2007, 5% for children as amended by the Statutory Health Insurance Competition Strengthening Act (GKV-WSG). Second, a fixed amount was paid by the statutory long-term care insurance. The amount depended on the level of (nursing) care involved in a particular IHU stay. Third, a part was funded from the sickness funds according to the contracts between the sickness funds and the inpatient hospice unit. And lastly, a co-payment was required from IHU guests, the level of which depended on the financing of the respective inpatient hospice unit, the level of care and the contracts between the sickness funds and IHU.


Even though these agreements are still valid, this financing model led to a situation which threatened the existence of inpatient hospice units. In 2009, funding from donations of IHUs did not mount to 10% but rather nearly 30%. This percentage could hardly be retrieved from donations. In addition to this the patient co-payment was incalculable for the terminally ill patient and could be up to 90€ per day. The problem was not so much that patients were not able to pay the requested co-payment. The co-payment of lower income groups was normally paid by social welfare or donations acquired by the inpatient hospice unit. Nevertheless, this hampered access to the IHU. Terminally ill patients were ashamed to depend on donations or social welfare. To obtain financial support from social welfare, patients had to open their financial status and the possibility existed that family members were liable for the co-payment according to social welfare law.


The political commitment is to relieve patients in the end stage of their disease from these difficulties and to ensure the future funding of inpatient hospice units. Therefore, the amendment of article 39a of the Social Code Book V introduced a new financing model for IHUs. It sets a new minimum amount per day (7% of the monatliche Bezugsgröße, which equates 176,40€ in 2009) to be paid by the sickness funds, additionally it commits the sickness funds to bear 90% of the costs of the stay, (95% for children). The remaining 10% (5% in case of children) is financed by the IHU from donations. Terminally ill patients (who are covered by statutory health insurance funds) will no longer be required any co-payments.


Main points

Main objectives


  • Increased funding for inpatient hospice units
  • Share of the IHUs' budget financed from donations limited to 10% (5%)
  • Improving access to hospice care for terminally ill patients

Type of incentives


  • No co-payments for hospices guests (SHI insured)
  • Sufficient coverage of the budget of inpatient hospice units by the sickness funds

Groups affected

Incurable Patients (SHI insured), Inpatient hospice provider, Sickness funds

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Characteristics of this policy

Degree of Innovation traditional rather traditional innovative
Degree of Controversy consensual consensual highly controversial
Structural or Systemic Impact marginal rather marginal fundamental
Public Visibility very low neutral very high
Transferability strongly system-dependent rather system-neutral system-neutral


As IHUs are established in Germany since the 1980s the idea of hospice care is not new. But in general the hospice subject is present neither in the media nor in public discussion. The debate on the care in the end of life is dominated by discussions on assisted suicide and living will.

Political and economic background


In 1986 the first inpatient hospice unit in Germany was founded. In the 1990s, federal associations representing the interests of hospice providers (DHPV Deutscher Hospiz- und PalliativVerband e.V., formerly The Bundesarbeitsgemeinschaft Hospiz) and patients (the Deutsche Hospiz Stiftung e.V.) were established. In 1997, Article 39a was added to the Social Code Book V (Statutory Health Insurance). In this article, the right for SHI insured to obtain reimbursements for IHU care was introduced .In 1998 a framework agreement between the SHI, the DHPV and welfare organizations was signed. This agreement constituted the payment system that was applied in principle until the recent amendment came into force.


In 2005 the Study Commission on the Ethics and Law of Modern Medicine presented an interim report entitled: "Improving the care for seriously ill and dying persons in Germany with palliative medicine and hospice care". The report stated that the funding of IHUs was not sufficient and that it implied a stressful situation for hospice guests. The installment of the committee in 2003 proved that reforming care in the end of life was seen as a serious aim by the German Federal Assembly. Although the Statutory Health Insurance Competition Strengthening Act amended the funding of palliative care, the legal situation of IHUs was not reformed. In March 2009, the DHPV published a study, which pointed out the existing problems and called for an amendment of the payment system for IHUs.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no yes yes no yes

Origins of health policy idea


Although the DHPV and the Deutsche Hospizstiftung e.V were both demanding better funding for IHU for quite some time, it was the line of argumentation of the Study Commission on the Ethics and Law of Modern Medicine in 2005 that was eventually included in the coalition agreement of the Grand Coalition between Christian Democrats (CDU) and Social Democrats (SPD) in the same year. The first draft of the Law Amending the Pharmaceutical Act and other Provisions presented by the Federal Government in March 2009 did not include any proposals on IHUs. At the same time the DHPV published the aforementioned study about the lamentable situation of IHUs. This led to a modification of the draft through the amendment of Article 39a. It proposed the current financing with one exception: it was not planned to increase the minimum SHI payment per day. In a public hearing of the Committee on Health, the representatives of the DHPV advised the Committee that the SHI minimum payment should be increased as well in order to avoid even higher financial shortcoming for IHUs than before. This suggestion was added to the draft. The law passed the Federal Assembly on 17 July 2009 and entered into force on 1 August 2009.


Initiators of idea/main actors

  • Government: The MoH prepared the draft of the law which didn?t mention IHUs.
  • Parliament: All parliamentary groups were supportive with regard to the IHU issue. Especially the parliamentary group of the green party took many initiatives to promote hospice care.
  • Providers: The DHPV?s study and the statementment in the hearing open to the public determined the final version of the amendment of article 39a.
  • Payers: The contracts between the sickness funds and the IHUs made it inevitable to find a solution for the problem by law. The amounts paid by the SHI were not sufficient for cost-covering.
  • Patients, Consumers

Stakeholder positions


The interim report of the Study Commission on the Ethics and Law of Modern Medicine: "Improving the care for seriously ill and dying persons in Germany with palliative medicine and hospice care" drew the attention to the funding problem. The study of the DHPV recommended the new financing model. An additional amendment was proposed in a statement in the hearing open to the public of Committee on Health.

Actors and positions

Description of actors and their positions
MoHvery supportiveneutral strongly opposed
Study Commission on the Ethics and Law of Modern Medicinevery supportivevery supportive strongly opposed
Christian Democratic Unionvery supportivevery supportive strongly opposed
Social Democratic Partyvery supportivevery supportive strongly opposed
The Green Partyvery supportivevery supportive strongly opposed
Deutscher Hospiz- und PalliativVerbandvery supportivevery supportive strongly opposed
The sickness fundsvery supportiveopposed strongly opposed
Patients, Consumers
Deutsche Hospizstiftung e.Vvery supportivevery supportive strongly opposed

Actors and influence

Description of actors and their influence

MoHvery strongvery strong none
Study Commission on the Ethics and Law of Modern Medicinevery strongstrong none
Christian Democratic Unionvery strongvery strong none
Social Democratic Partyvery strongvery strong none
The Green Partyvery strongweak none
Deutscher Hospiz- und PalliativVerbandvery strongvery strong none
The sickness fundsvery strongvery strong none
Patients, Consumers
Deutsche Hospizstiftung e.Vvery strongneutral none
The Green PartyDeutsche Hospizstiftung e.VStudy Commission on the Ethics and Law of Modern MedicineChristian Democratic Union, Social Democratic Party, Deutscher Hospiz- und PalliativVerbandMoHThe sickness funds

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation


The changes in financing were effective from the same day the amended article went into force. No new framework agreement was necessary. Adjustments of contracts between sickness funds and IHUs are necessary when the amount per day and guest is less then the minimum amount.

Expected outcome


The policy's goal to improve access to IHUs for terminally ill SHI patients is likely to be achieved. Terminally ill persons only need a referral from a medical doctor, if they decide to go to an IHU. There is no further need to deal with social welfare organizations. This relieves the patients, their family and friends from (sometimes humiliating) administrative work and prevents the ill person from concerns of burdening the bereaved. Access to inpatient hospice care is now as easy as to traditional hospital treatment (which still requires €10 co-payment per day.).


In view of the increasing number of elderly people one could expect that in the future more IHUs will be needed. An increasing number of IHUs means that throughout the Federal Republic of Germany more and more donations will become necessary. Funding from donations may not be sufficient to cover 10% or 5% of the future IHUs' budgets. This may force another reduction of the percentage of compulsory funding from donations in the future. For the moment, however, the resources should be sufficient to ensure the IHUs' existence.


The costs for the SHI system are likely to be moderate, especially vis-à-vis "traditional" treatment. An average stay in an IHU takes 20 days with a per diem charge of 305€, which is still cheaper than a comparable stay in a hospital. Professor Allert, the author of the study of the DHPV, said in an interview that the promotion and development of hospices is "a unique chance in the health sector to augment quality and to reduce costs at the same time."

Impact of this policy

Quality of Health Care Services marginal neutral fundamental
Level of Equity system less equitable four system more equitable
Cost Efficiency very low neutral very high


Nevertheless the new funding model eases the access for terminally ill who were not able to manage to obtain a place in an IHU before.


Sources of Information


Author/s and/or contributors to this survey

Hoffmann, Christine . van Ginneken, Ewout . Busse, Reinhard

Suggested citation for this online article

Hoffmann, Christine . van Ginneken, Ewout . Busse, Reinhard. "Better funding model for Inpatient Hospice Units". Health Policy Monitor, December 2009. Available at