48 3.3. Common Explanation Approach This short overview of the development of drug expenditure in the last 20 years casts a negative picture of the long-term impact of political attempts at cost-containment. The question arises: why has politics failed to construct an effective control system to achieve the of? cially declared goal of cost-containment? As a major reason for the unassertive reform process, it is usually alleged in scienti? c literature that the German SHI is characterised by the qualities of the so-called “negotiation democracy”. The concept “negotiation democracy” was used for the ? rst time in the 1970s to describe political systems in which essential decisions were not reached by a majority of votes, but by the way of negotiation processes.33 Especially health policy is highly affected by this because of a multiplicity of negotiation arenas. On the one hand, most health care reforms require the approval of both the Bundestag (Lower House of Parliament) and the Bundesrat (Upper House of Parliament). Different political majorities in each chamber often lead to con? icts in the negotiations through the competition of parties, causing blockades of the reform process for tactical reasons (Schreyögg et al. 2004). On the other hand, the organisational build-up of the SHI provides special associations and interest groups with several possibilities to exert in? uence on the decision-making process (Gäfgen 1988). In the context of the SHI’s self-administration, associations of SHI physicians and the central associations of the sickness funds possess the decision making authority. Decisions take place under supervision, but without direct participation of government. Other institutionalised forms of involvement of interest groups in special committees are without decision-making power, but they are nevertheless very important in forming political opinion (Bandelow 2004), e.g. the “Concerted Action in Health Care” (disestablished in January 2004) or the “Advisory Council to the Assessment of the Development in Health Care”.34 Apart from this, it is normal for more than 70 interest groups to take part in parliamentary hearings on health care reform acts (Schreyögg et al. 2004, p. 5). The analysis of the political decision-making process is getting even more sophisticated by the fact that the process is characterised by unstable protagonist coalitions. Every single issue of reform package generates diverse interest coalitions among the representatives involved (Perschke-Hartmann 1994, p. 21). The concept of “negotiation democracy” assumes that the described multiplicity of negotiation arenas prevents effective health care reform acts. Hence politicians would not be able to assert strong control instruments against the will of the powerful health 33 The term “negotiation democracy” was introduced into German-speaking political science by Lehmbruch as “Proporzdemokratie” (Lehmbruch 1967). Later on he replaced this term with the Swiss concept “Konkordanzdemokratie” (Lehmbruch 1968), which is the German equivalent to Lijphart’s “consociational democracy” (Lijphart 1968). See also Lehmbruch 1996. The theory of “negotiation democracy” was extended in the 1980s by the compromise and negotiation enforcements of the federal structure as well as the neo-corporatism con? ict-settlement in Germany (Czada 2000). 34 Bandelow (1998) gives a survey of all included interest groups. 49 care providers and the pharmaceutical industry respectively. But a closer look at the history of health care reform acts reveals that the government is not as helpless as this theory hypothesises. In the past, government was able to accomplish – from the view of the suppliers – uncomfortable SHI-modi? cations, e.g. the introduction of the drug budget in 1993 or the inclusion of patent-protected drugs into the reference-price system in 2004.35 Consequently, one can adhere to the fact that, contrary to the presumptions of the theory of “negotiation democracy”, government is able to implement strong control instruments even against the ambitions of associations and special interest groups. But it must also be recognised that health policy repeatedly had a split personality in the past: in contrast to the of? cial stated goals of cost-containment and contribution rate stability, the same government which introduced reference pricing excluded patented drugs and thus offered health care suppliers the possibility of circumventing price controls. Equally astonishing is that the same government which established the drug budget, counteracted it itself abstaining from claiming regresses in cases where the budget was exceeded, not to mention that this most restrictive control instrument was ? nally abolished. Another example is the non-consideration of a positive list, although this control instrument had been discussed several times. Thus it can be stated that succeeding governments were either unable or unwilling to vigorously pursue the announced goal of cost-containment in the last decades. 3.4. The Perspective of Public Choice The main failure of the theory of “negotiation democracy” is it basically assumes that politicians are really interested in decreasing drug expenditure. An investigation into the self-interests of politicians reveals a different picture: Politicians aspire towards vote maximization. They do not act unsel? shly to satisfy the preferences of people, but they try to attain or stay in power (Downs 1957). Since health politics is always one of the most followed policy ? elds, especially during election campaigns, it is understandable that it plays an important role in election chances. People react highly sensitively to reductions in health care provision or increasing fees. Therefore politicians at least of? cially call for a comprehensive standard bene? t catalogue and contribution rates stability. However, since the concurrent ageing of the population demographics and technological progress cause health care cost escalation,36 another sector which pays is needed. Instead of burdening the electorate, it should be attractive for politicians to cut costs at the expense of the suppliers. But the medical fraternity is especially disposed to having a close relationship to patients and act as 35 A detailed overview of the history of health care reform acts and negotiation democracy is given in Blankart and Wolf (2005). 36 For the interrelation of the ageing demographics, technological progress and increasing health care costs see e.g. Knappe (1995), PROGNOS (1998), Breyer and Ulrich (2000), Hof (2001), Postler (2003).