30
Bismarckian health insurance in 1883 already marked the beginning of the PAYGO path in
the SHI. Since the 1970s, it has become clear that productivity and employment rates were
unlikely to increase indefinitely, and the ‘generational contract’ underlying the system
would be especially sensitive to the upcoming demographic changes. However, alternatives
have so far been mostly ignored by stakeholders and policy-makers in the field, leading
Schreyogg and Farhauer to diagnose a lock-in effect, i.e. the end-state of a path dependent
development, as far as the financing side of the SHI is concerned.
While this argument concerns technical issues about the switch between financing modes, it
only tells part of the story about resilience in the German health care sector. Additionally, it
is important to realize that an institutionally induced lock-in is recognized as such and is left
intact by relevant actors in the sector. One feature of the German SHI in comparative per-
spective (still in place in the mid- 1990s) is its ‘high extent of structural continuity, which
even endured repeated and comprehensive change of functional requirements on the health
care system relatively untouched’ (Dohler/Manow 1995: 141).33 In this view, structural
continuity stems from three sources, the federal ‘joint decision trap’, the dominance of coa-
lition governments (i.e. politico-institutional and party-political factors) and a strong pres-
ence of interest groups (Verbandslastigkeit) and a bias of policy-makers towards their
wishes. While the former two factors help to shed light more generally on limits of reform
capacity in the German political system, for an examination of resilience it is instructive to
consider their interaction with the interest group factor. The prominent role of interest
groups not only refers to conventional pressure group politics, but also to the (highly le-
gitimated) transfer of regulatory competences to the self-governing associations of doctors
and sickness funds. In addition, we see a high degree of linkage between heterogeneous
societal interest groups (including clientelistic relationships between health care associa-
tions and the party system). Moreover, there are also links with the social partners, employ-
ers and trade unions, who hold posts in sickness funds’ boards of directors (Dohler/Manow
1995: 142f.).
The interacting dimension with political institutions and the party system comes in as fol-
lows: coalition governments, the federal system and the degree of codification in German
policy-making offer many possibilities for vetoing reform proposals, which in the past often
resulted in the watering down of such proposals in the phase of policy formulation (Webber
main implication is that the body administering the funds does not build up a capital buffer, as the incom-
ing funds are being used up by the beneficiaries at any time. This contrasts with a capital-funded system,
where any individual of a particular generation builds up his own capital base in order to finance current
and future benefits or services.
33 Dohler and Manow approach this puzzle in a three-fold analytic framework, to explain why the Ger-
man SHI is both remarkably stable and adjusts to changes in functional requirements at the same time.
Their framework includes sectoral structures or institutions, actors and ideas: in their conception, ‘struc-
tural continuity cannot only be understood as a result of a institutional configuration, which is only per-
meable for strategies of incremental development, but also relies on the guiding function of a health pol-
icy organisational model (Ordnungsmodell), which effectively limits the range of admissable options for
reform’(1995: 142). For my argument on stickiness, I will only borrow what they identify als ‘sectoral
structures’.