Difficult merger of DAK and BKK Gesundheit



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Fusion: Third largest statutory health insurance company is created

The German employee health insurance (DAK) and the BKK health will merge. With 6.6 million members in the future, DAK-Gesundheit, as the planned name after the merger will become the third largest German health insurance company in the future. However, the difficulties of the two health insurance companies are by no means over the table, according to industry experts. The starting conditions for the new giant health insurance company will be correspondingly difficult.

Because the merger of the DAK and BKK Gesundheit results in significant synergy effects, particularly as regards the administrative structures, the bargaining power with regard to service providers in the health system and the reach of the health insurance company, but according to the experts, the existing problems will not simply go away. The DAK, in particular, has a disproportionately large number of older, cost-driving insured people in its ranks; in the past, both health insurance funds suffered from a significant decline in membership, not least due to the collection of additional contributions, and must continue to charge an additional contribution of eight euros after the merger. In this way, the “fundamental problems are not solved, but only postponed,” reports the “Financial Times Deutschland”.

Synergy effects through the merger of health insurance companies There are some advantages for the two ailing health insurance companies at the business level, but both insurance companies have been working too expensive so far, suffer from the outdated and therefore costly insurance industry, and above all the large DAK has a disproportionately large administrative apparatus.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 Gesundheit would save costs by merging offices or a common IT, but the major breakthrough does not result from the merger. The improved bargaining power vis-à-vis health care providers will also slightly improve the financial situation after the merger, but the structural problems of health insurance companies, which in the past have caused the financial difficulties at DAK and BKK Gesundheit, will remain. The insured must also pay an additional contribution of eight euros after the merger, which means that the loss of membership and all the problems associated with it will continue to exist.

Downward spiral through additional contributions Since the introduction of the additional contributions, the collection of some health insurance companies has drawn them into a downward spiral, which in the worst case - as with the City BKK - resulted in insolvency of the insurance company. By collecting the additional contributions, numerous insured leave the corresponding health insurance companies, whereby young, healthy people in the first place look for new insurance and old, sick insured remain. As a rule, however, these incur more costs than the normal contributions they collect, so that the financial difficulties of the health insurance company increase and an expansion of the additional contributions becomes necessary. As a result, numerous members leave the cash register again, so that the problems continue to worsen. According to the Financial Times Deutschland, this downward spiral can hardly be stopped by the merger of DAK and BKK Gesundheit.

Increasing competition among health insurance companies The black and yellow federal government expressly requests that the competition between the statutory health insurance companies be tougher, as this will enable savings to be made in the entire health system, according to the CDU / CSU and FDP. Experts predicted that the tightened competitive conditions resolved by the healthcare reform would lead to consolidation in the health insurance sector as soon as the resolutions were passed. The number of statutory health insurers will be reduced from over 150 to under 50, the industry experts predict. Since the other statutory insurances are obliged to include the insured in their ranks after the insolvency of another health insurance company, the increased pressure of competition for the customers of the health insurance companies is not a problem, according to the Federal Government. However, City BKK's bankruptcy has shown that a little more than a hundred thousand insured people looking for a new health insurance company can experience considerable difficulties. A smooth transition could hardly be guaranteed for those affected. Unthinkable what would happen if a health insurance company with several million members had to file for bankruptcy. The system would probably be simply overwhelmed at this point. Critical experts had already speculated after the wave of mergers among health insurers last year that some mergers only serve to achieve a systemically important size so that - similar to the banking crisis - the state is forced to intervene in the event of impending insolvency. (fp)

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

Image: DAK Service

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