Care must not make you poor!

Prof. Saatkamp, how did the TV appearance come about?

MDR had previously reported on our new nursing degree course and asked my colleague Martin Knoll, who set up the course, to take part in the program. Because the program was primarily about nursing costs - and less about nursing content - he passed the contact on to me. Five minutes after he asked me if I was interested, the MDR called.

What do you think are the reasons for the drastic rise in personal contributions - despite increased subsidies - and what short or medium-term measures do you think would be useful to limit this development?

First of all, it is important to note that long-term care insurance was never intended as full insurance, but as "partial cover". The payments made by the long-term care insurance funds therefore do not fully cover the costs of a place in a nursing home.

Nursing home costs are made up of the cost of care, the cost of accommodation and meals and the cost of the home building (known as investment costs). Let's take the average values for Saxony as an example: the total care costs amount to approx. 3,400 euros, of which the resident has to pay 1,858 euros themselves, this amount is called the facility's own contribution to the care costs (EEE), the rest (which is not shown in the slide and amounts to approx. 1,500 euros) is covered by the care insurance fund. This EEE is independent of the level of care, i.e. every resident pays the same share of the care costs, although the costs are different. The higher costs of a person in need of level 5 care are borne by the care insurance fund. For example, if someone is admitted to a home with care level 2, the care insurance fund pays 805 euros per month to the home; for care level 5, it is 2,096 euros. These values are fixed by law. The resident does not feel this financially, as they always pay the EEE of their home, regardless of their care level. In addition, there is an average of 830 euros for board and lodging and 448 euros for investments (building costs), which the resident must bear 100 percent. This results in a theoretical personal contribution of 3,136 euros of the total costs of approx. 5,000 euros.

Depending on the length of stay, a percentage subsidy on the EEE is granted on this theoretical personal contribution. This is like a "discount", which amounts to an average of 270 euros in the first year in Saxony and rises to 1,394 euros in the 4th year of residence. If this is taken into account, the total personal contribution (i.e. EEE plus board and lodging plus investment costs) is 2,857 euros per month in the first year and falls to 1,743 euros from the fourth year onwards.

The care costs essentially consist of the salaries of the nursing staff. This cost block has more than doubled in the last 5 years. This was also the political intention. The homes have been obliged by law to pay according to collective agreements. In addition, there are specifications for each home regarding the care ratio (number of residents per care worker), which may not be exceeded, otherwise sanctions may be imposed because the quality of care is at risk.

The cost of meals and accommodation has risen by around 30 percent in the last 5 years. This is mainly due to general inflation and the increased cost of electricity and energy. The investment costs item has only risen by around 10 percent in 5 years.

The conclusion is that the cost increase in the care home sector reflects society's increased appreciation of care workers and the general rate of inflation in Germany. Limiting costs - or prices, to be correct - by law makes no sense, as this would cause some care home operators to close down. It would be like forcing Ferrero to only sell children's chocolate for a maximum of 80 cents per bar. The only way to "limit" prices for nursing home residents is to have a functioning market. We currently have this in Germany in a weakened form, as prices are not determined by the market, but by "contracts with compulsory agreement" with the care insurance funds. In addition, the limited availability of nursing staff is perhaps currently having the greatest impact on the supply of nursing home places. But there is definitely price competition via the personal contribution.

How do you assess the current financial burden for people in need of care - in particular the personal contributions of 2,500 to 3,000 euros per month - with regard to the real pension situation?

The average statutory pension in Germany today is around 1,100 euros per month. This is nowhere near sufficient to cover a nursing home contribution of 2,500 to 3,000 euros. However, the overall picture is more complex than this comparison of figures. Not every pensioner receives a statutory pension; many pensioners have an additional company pension, Riester pension, interest income or income from renting. In summary, it is therefore necessary to look at the net income of pensioners, which includes all types of income. The 2024 Old Age Security Report provides the following data, for example: The majority of pensioner households (i.e. couples) have a net income of over 3,000 euros per month and around 10 percent of single pensioners have such a net income. In this group, therefore, there are certainly people in need of care who can afford a personal contribution of 2,500 to 3,000 euros per month without having to draw on their assets. If assets are also taken into account - and this is in line with the welfare state principle that the state only provides support if one's own income and assets are insufficient - the picture looks even more differentiated, especially for western Germany.

Conclusion: Many pensioners are unable to cope with a monthly personal contribution of 2,500 - 3,000 euros and have to fall back on state support. This is why the discussion has arisen to cap the personal contribution to care costs (EEE) at 1,000 euros, for example, or to have the investment costs financed by the state. Both measures would require considerable additional funding in the billions from care insurance or tax revenue. I do not consider either of these to be economically or politically realistic at present. However, there is also a not inconsiderable proportion of pensioners who can cover their current personal contribution from their net income or assets. These "wealthier" pensioners do not need a state-subsidized cap or subsidy.

My concept envisages granting the benefit subsidy depending on income/wealth status. For poor pensioners, this would mean a cap on the personal contribution to care (EEE) from the first year onwards to e.g. 1,000 euros, possibly also a reduction in investment costs; wealthier pensioners would not receive any subsidies, not even for longer stays in the home. The subsidy would be needs-based and no longer the same for every person in need of care. This would undoubtedly change the nature of care insurance, but would not place a further burden on the overburdened social systems and would ensure a certain social balance.

Can you give examples or approaches of how older people can find cost-effective alternatives to inpatient care - for example through outpatient models, shared apartments or new care concepts?

There is now a wide range of alternatives on the "market" for inpatient care services, such as residential care communities, assisted living or 24-hour care. In the logic of care insurance, these are "outpatient care services" because they are not traditional care homes. Sounds strange at first, because with assisted living you usually move into an organized living environment. Without going into the legal and economic details at this point, it can be said that these concepts are less regulated than a home and are therefore more flexible and sometimes more cost-effective for residents. In addition, the required services can be booked individually - although this can lead to high costs, which may be equivalent to those of a care home. The concept of 24-hour care at home is also interesting. This is usually based on the fact that a caregiver, who comes from Poland for example and is employed there under Polish conditions, lives at home with the person requiring care and looks after them more or less 24 hours a day. Of course, this caregiver must also live in the home. This is an interesting option for those who have such a possibility. The costs are around 3,000 euros per month.

As a professor of health economics, how do you bring your experience and perspective to your teaching on the health care management course?

My professorship is based on many years of practical experience in key areas of the healthcare sector (health insurance companies, clinics, outpatient care, pharmaceutical and medical technology industry). I try to incorporate this knowledge and my practical experience into my teaching at the HSZG. The focus of my teaching is therefore to convey the complex economic regulations and conditions in the healthcare sector to the students. To do this, I have been using a computer simulation program for many years, where students have to take over the management of a nursing home as a group. They have to make decisions about hiring staff, fringe benefits, training, food quality, quality of care and co-payment costs. The groups compete within a virtual city and aim to run the home successfully. This is realistic, as quality of care and employee satisfaction play an important role in the successful management of a home, alongside the efficient use of resources. This brings together the content of different events and is a lot of fun.