Digital Catch-Up – Also in the Public Sector

All the political parties pledged in their campaign manifestos to encourage the digitalisation of Germany’s economy and society. This is a good thing. Armed with buzzwords like “Industry 4.0” and “digital hubs” or calls for a faster expansion of the country’s broadband networks, politicians from all sides are demanding that the pace of digital transformation pick up rapidly in various economic sectors and private companies. But the government might want to get its own house in order first. The level of digitalisation in the German public sector is well behind that of many other countries.

In terms of “e-government”, namely the degree of digitalisation in the public sector, Germany ranks in the middle of the pack internationally, far behind nations like the UK, Australia, Denmark or Estonia, seen as the poster child for e-government. For example, in Estonia it is possible to register a business online in a matter of hours. This is because digital signatures are not only considered legally binding there but also secure thanks to encryption. In the UK, meanwhile, the entire process for renewing your passport can be completed online. In Germany, many administrative issues still require physical paperwork and appearing at the relevant authority in person.

If Germany is not to fall further behind in terms of e-government, the culture within its public bodies needs to change. To this end, the National Regulatory Control Council is calling for a higher-quality and more binding form of cooperation between the federal government, state governments and local authorities to help overcome some of the obstacles to implementing digital solutions across administrative boundaries.

Digitalisation in the healthcare sector, which is shaped by government policy in a number of ways, also shows plenty of room for improvement. A ZEW study has shown that healthcare is the only sector in Germany in 2017 with still only a low level of digitalisation. That’s a bitter pill to swallow, particularly since digitalising certain healthcare processes and applying digital technologies to medical care, e.g. telemedicine, could help to alleviate challenges like cost pressure, skills shortages and demographic changes.

Other nations are already ahead of Germany

Other nations are streets ahead of us when it comes to implementing such technologies. In Nordic countries, as well as the Netherlands and the UK, digital prescriptions have been rolled out pretty much nation-wide, whereas in Germany they are currently only used very occasionally in hospitals. However, online consultations after doctor and patient have already met in person have been a standard benefit covered by German statutory health insurance as of July 2017. In the UK and Switzerland online consultations have been an option for a number of years now.

When it comes to these structural changes, health insurance providers will have an important role to play. Being in competition with one another, insurers should in fact be trying to seize the opportunity offered by digitalisation to improve their services and make themselves more attractive to their customers. But this is not what we are seeing on the market. As shown by the German Monopolies Commission’s latest special report, the competition deficits in the healthcare sector are manifold. Lawmakers will have their hands full rectifying this in the upcoming parliamentary term.

The new government cannot simply satisfy itself with calling for greater digitalisation of German industry and society; it must also promote and implement digital solutions in the sectors of the economy that fall under government remit. There are numerous examples of other countries doing this with great success. Let the digital catch-up begin.

This piece appeared on 29 October 2017 on "Zeit Online".