Difficult fusion of DAK and BKK health

Fusion: Third largest statutory health insurance company is created

12/10/2011

Deutsche Angestellten Krankenkasse (DAK) and BKK Gesundheit will merge. With 6.6 million members in the future, DAK-Gesundheit, the planned name after the merger, will in future become the third largest German health insurance fund. However, the difficulties of the two health insurance companies are by no means off the table, so the assessment of industry experts. The starting conditions for the new giant health insurance fund are correspondingly difficult.

Although the merger of the DAK and BKK Health results in significant synergy effects, especially with regard to the administrative structures, the bargaining power towards service providers in the healthcare system and the coverage of the health insurance fund, the problems that have hitherto existed will not simply disappear in the opinion of the experts. In particular, the DAK disproportionately many older, cost-insured insured in their ranks, both funds suffered in the past, not least due to the levy of additional contributions under a significant drop in membership and must continue to post an additional contribution of eight euros after the merger. So will the „fundamental problems not solved, but only deferred“, reports the „Financial Times Germany“.

Synergy effects through health insurance merger
For the two ailing health insurance, there are some advantages at a business level, but both insurances are currently too expensive, suffer from the outdated and therefore expensive insurance and especially the large DAK has a disproportionately large administrative apparatus. These difficulties can be limited by a merger, but not completely eliminated. For example, the merger of DAK and BKK would save costs, for example by merging offices or sharing IT, but the merger does not bring the big breakthrough. The improved bargaining power over healthcare providers will also slightly improve the post-merger financial situation, but the structural problems of health insurers, which in the past have caused financial difficulties for DAK and BKK Gesundheit, will remain. The insured must continue to pay an additional contribution of eight euros after the merger, which will continue to reduce membership and all the associated problems.

Downward spiral through additional contributions
Since the introduction of the additional contributions, their survey has torn some health insurance companies into a downward spiral, which in the worst case - as with the City BKK - resulted in a bankruptcy of the insurance. By collecting additional contributions, many insured people leave the respective health insurance funds, whereby primarily young, healthy people seek new insurance and old, sick insureds remain behind. However, these usually cause more costs than are taken over the normal contributions of them, so that the financial difficulties of the health insurance to increase and an extension of the additional contributions is required. As a result, many members are leaving the cash register, causing the problems to worsen continuously. According to the assessment „Financial Times Germany“ This downward spiral is unlikely to be stopped by the merger of DAK and BKK Gesundheit.

Stricter competition among health insurance companies
The black-and-yellow federal government expressly wants the tightening of competition between the statutory health insurance funds behind it, since this will enable savings to be made in the entire healthcare system, according to the approach of the CDU / CSU and the FDP. The fact that the increased competitive conditions agreed with the health care reform would lead to a consolidation in the health insurance sector, experts predicted immediately after the adoption of the decisions. The number of statutory health insurance companies will reduce from over 150 to under 50, according to the forecast of the industry experts. Since the other statutory insurances after the insolvency of another health insurance companies are obliged to take the insured in their ranks, resulting from the increased competitive pressure for the customers of health insurance no problem, according to the assessment of the Federal Government. However, in the bankruptcy of City BKK has shown that even with just over one hundred thousand insured who are looking for a new health insurance, considerable difficulties may occur. A smooth transition was difficult to ensure for those affected. It's hard to imagine what would happen if a health insurance company with several million members had to file for bankruptcy. The system would probably simply be overwhelmed at this point. Thus, after the wave of mergers among health insurance companies last year, critical experts had already speculated that some mergers merely serve to achieve a systemically important size, so that - as in the case of the banking crisis - the state is forced to intervene in the event of imminent insolvency. (Fp)

Also read:
DAK & BKK Gesundheit becomes DAK Gesundheit
DAK also demands an additional contribution in 2011
DAK: Job cuts through additional contributions
Merger between DAK and BKK Health failed

Picture: DAK Service