Health Benefits: The Economic Impact of Rehabilitation

The Role of Rehabilitation in Healthcare

Rehabilitation can be a lifeline for individuals recovering from heart problems, depression, or spinal disc issues. These treatments not only stabilize health but often enable patients to return to daily life and work, benefiting the broader economy by reducing healthcare costs and increasing tax revenues. However, not all patients receive the rehabilitation they need. Some requests for rehabilitation are denied, while others come too late, often only after a hospital stay. Ideally, rehabilitation should prevent illnesses, unlike care that starts after medical treatment. This principle is supported by Germanys Social Code.

Economic Benefits and Challenges

A new analysis by Prognos, commissioned by Median Rehabilitation Clinics, estimates the economic benefit of medical rehabilitation in 2023 to be up to €5.3 billion. This figure includes saved work hours and reduced health and pension costs. When factoring in purchasing power and tax revenues, the economic impact rises to €7.9 billion. Despite its benefits, statutory health insurance often hesitates to cover rehabilitation costs. "Many rehabilitation measures make sense socially, but the financial systems dont always incentivize timely intervention," explains Boris Augurzky, a health economist at the Leibniz Institute for Economic Research. Rehabilitation is typically approved only after acute treatment is completed. Without prior treatment, securing approval is challenging, disrupting the care process and increasing healthcare costs.

Funding and Approval Processes

Rehabilitation funding varies by life situation, with the statutory pension insurance primarily responsible for employed individuals, aiming to preserve their work capability. In 2023, the pension insurance spent around €6 billion on medical rehabilitation. The pension insurance has a vested interest in financing rehabilitation because it saves costs in the long run. "If I pay €3,500 for rehabilitation and the person can work again, its worthwhile," says Augurzky. However, when health insurance is involved, complexities arise due to unclear responsibilities between health and pension insurance. Health insurance covers retirees and children, complicating the approval process. The law mandates that rehabilitation should precede care, similar to its role before retirement, to prevent the need for long-term care. In practice, however, this isnt always followed, as Augurzky notes. Rehabilitation is mostly approved following severe illness treated in hospitals. Patients with recommendations from their general practitioners often face difficulties in getting approval. Antonia Walch, managing director of the Federal Association of German Private Clinics, confirms that 80% of treatments occur post-hospital stay.

Addressing Systemic Issues

A systemic flaw lies in the separation of costs and benefits between health and care insurance. For instance, if an elderly person remains healthy due to rehabilitation, the health insurance pays, but the care insurance reaps the financial benefits. Unlike pension insurance, where rehabilitation costs and benefits are aligned, health and care insurance lack direct incentives for early investment in rehabilitation. Experts like Augurzky propose merging health and care insurance to align incentives and prevent systemic inefficiencies. Rehabilitation, when timely and adequately funded, not only uplifts individual health outcomes but also strengthens the economy. Addressing systemic barriers and aligning financial incentives are crucial steps toward maximizing these benefits.