Before the budget system there was in fact no limitation to the volume of supplied services. It also meant that hospitals had an interest in producing high numbers of inpatient days.
After the introduction of the budget system, the relative power of medical and administrative staff was turned upside down. Instead of the doctors determining how many patients were to be treated and admitted, the administration had to keep the budget in which numbers of admittance and investigations were negotiated upon with the local sickness funds and the private health insurances. For hospital managers, doctors now produced only costs. At the same time specialists had their own negotiations with the health insurance organizations about the numbers of production, that is the numbers of patients they would treat. This complicated the matter a lot. At that time for a doctor more treatment still meant more money because of the fee-for-service system that determined his income. And, of course, there is the question of professional standard. Medical specialists do not base their decision whether a patient should be treated or not on administrative reasons, but on medical ones. They claim that an investigation is necessary, whether the budget allows it or not.
This incongruity led to a further step, namely the abolishment of the fee-for-service system for the specialists. Since last year almost all specialists get a high but fixed income. This means they do not gain anymore by a high level of production.
Nowadays, the most common way to control the budget is to install management teams, consisting of medical specialists, nurses, and administrators.
