Prototyping policy as Germany prepares to welcome digital healthcare apps into its statutory insurance system with the Digital Health Law (DVG)

We generally associate prototyping and its concepts, such as build to think and rapid iteration, primarily with products and services — particularly in the fast paced world of startups and digital experiences — rather than policy and regulation. But the concept of policy prototyping can already be seen in some high profile cases, from Finland’s two-year long pilot testing of a new form of social welfare, to the various fintech sandboxes set up to test blockchain-based solutions (e.g. UK’s FCA). Even in my previous home-base of Japan, where regulatory and social reforms have tended to be more measured, mechanisms have been set up to support innovative solutions that temporarily bypass regulations in order to launch short-term “demonstrations” of market viability. In fact, over 100 companies, ranging from mobility to fintech, now operate under this sandbox framework.

DVG — Germany’s new law to usher in healthcare digitalization

It was through this lens, having just arrived in Germany, that I first heard about “some new law” that was going to disrupt the healthcare ecosystem. So what is it and why is it significant? Well in the words of Germany’s Health Minister Jens Spahn, the Digital Healthcare Act / Digitale Versorgung Gesetz (DVG):

…will be adopted as the world’s first, and Germany will be at the forefront. We will be ending the (unsorted) and Wild West of (digital health) apps. The reality is this, there is no orientation at all. The apps are all available. For everyone. Which one really adds value? Which ones are just wrapped in nice marketing, a gimmick, without actual patient benefit? What we will introduce will be the first (…)The first country in the world statutory health insurance will fund the entirety when there is added value shown. We are showing many others how this can be done. This will be uncharted territories and we will need to set up, for the first time, standards to measure the additional value that comes from digital health applications — November 7, 2019 (translation mine) ¹

More specifically, DVG defines digital apps as a class 1 or 2a medical product whose main function is digitally based and patient centric. While DVG actually addresses broader digitalization goals as well, this portion with regards to digital apps is, as Minister Spahn mentions, a world-first. The result would be that, starting in the summer of 2020, 72 million statutory health insured German citizens would not only be able, but are legally “entitled²,” to have digital apps prescribed by doctors as part of their therapy, and have them refunded by public healthcare for the first time. This impact cannot be understated for app manufacturers. Doctors would have the official go-ahead to prescribe, promote, and explain apps to patients as an official part of their therapy.

Some examples of the apps envisioned were described during legislative discussions. They include the scheduling of online consultation hours and the tracking of blood sugar levels.³ These apps would then need to show positive care effects, such as medical benefit or structural/ procedural benefits. Importantly, the law affords app “manufacturers” (e.g. startups) a one-year grace period to still participate and list on the government registry, and to use that time to collect real-world data that demonstrates healthcare benefits. Manufacturers that do not have the healthcare data can still apply for a 12-month grace period and be temporarily listed. Approved apps (review within 3 months of submission) would then be fast tracked into a digital app registry.

Summary and presentation by Health Innovation Hub (HIH), a think tank within the Ministry of Health, here.

And specifically back to prototyping and policy-making?

As DVG seeks to drag a previously analog space into the digital age, prototyping can help flesh out and test these new interactions, incentive schemes and design out potential unintended results. For example:

  • How would patients and HCP know what apps are on the registry?
  • Would there be events and workshops for them?
  • How would healthcare economics be factored in?
  • How would the flow work in which doctors prescribe and patients download and register the apps?

I have also had the opportunity to discuss DVG and its implications with some friends in the space and below are my current takeaways:

Younger politicians like Jens Spahn may be embracing the “failing forwards” mentality to agile law-making

The inclination to operate in ambiguity and to have an openness to failure are in most cases unpalatable for policy makers. However when Jens Spahn addressed the Bundestag, his comments reflected some of the basic tenets that underlie the principles of prototyping. He said that they will not be passing the perfect law (for DVG) but rather can expect failure. And yet this will be progress nonetheless.

“And yes, not everything will be perfect the first time — I can tell you all now. You can make the same comments in six months’ time because something will have gone wrong — but perhaps we should finally make digital innovations possible. If all we have are reservations, but never to take action, then nothing will happen” (translation mine)⁴

This mindset reflects the prototyping approach by seeking to have something tangible for feedback and to reiteratively refine towards a better solution.

Image for post
Sticker made by Thryve with Jens Spahn as the savior bringing innovation

With regard to policy-making and the DVG, top-down politics, rather than bottom-up learnings from real world prototyping, is still the primary driver

The goal of prototyping is to cyclically develop an idea towards a tangible outcome in the most cost and risk efficient manner. Generally the stages flow in the following order: goal/ problem definition — develop the test (policy) — refine (achieve consensus) — implement (test) — evaluate (review). This occurs in a cyclical manner, with the goal of achieving actionable feedback. This concept applied to law-making could potentially result in a shift in how we approach the policy-making cycle which traditionally has been a very sequential process.

Although Minister Spahn told the Bundestag that they can expect DVG to fail, and then be fine-tuned based on learnings, the law in its current formulation is still representative of the traditional sequential model we are used to. It does not break out of the traditional waterfall process and complete the feedback loop connecting the evaluation at the end of the twelve-month period to the initial act of policy-making. This is not necessarily a bad thing, as it is perhaps still debatable whether policy making can be treated, from the perspective of prototyping, similarly to products and services.

I also had an opportunity to speak about the topic with a friend, Manuel Grahammer, CEO of ABATON — a digital healthcare startup here in Berlin. He pointed out that the actual policy-making for DVG is still very much a top-down process. In fact, credit for the setting of the law can be attributed more to Minister Spahn’s political shrewdness, rather than momentum built from the actionable learnings from real world experiments. In fact, Grahammer says that a top-down approach may perhaps be the only way for such an “innovation-resilient system” to pass disruptive legislation and that there is also a saying in some circles that healthcare policies have, until now, been suffering under “pilotitis” — in effect, the perpetual initiation of funded pilot projects which do not scale and reach market maturity or meaningful results.⁵

Under Minister Spahn, the idea of a pro-digital lobby group materialized from within the Federal Health Ministry. Furthermore, it is also said that the DVG was passed only 7 months after its initial draft because Minister Spahn had overwhelmed traditional lobby groups with the speed in which he brought new legislation to the Bundestag. An article famously called Spahn. “The Hardworking Minister” who passed 16 laws in 16 months.

With regard to policy-implementation, the structure of DVG incorporates elements of prototyping, but does it represent the correct expansion of administrative powers?

While a full prototype loop whereby the feedback received informs the next formulation of the law is not currently in place, DVG still includes elements of “agile law making”, especially with regard to its implementation.

  • As with the various pilot and sandbox programs mentioned earlier, the 12-month grace period and fast tracking of apps allows apps to still be listed and collect real world data under the system, before being subjected to healthcare review. However unlike other limited-scale pilots, DVG brings its application in one-swing to all the 72 millions insured citizens in Germany.
  • The DVG actually imparts onto the Ministry of Health powers to define, adapt and change the implementation of the law through legislative decrees.

In terms of its design and conduciveness to the ideals of prototyping, conferring to the executing administration the powers to define and adapt the interpretation of the law is one way to open a path for a prototyping cycle within a portion of the law. It would allow for the necessary framework to conduct agile reviews and to reiterate on the definition and implementation of the law based on these feedback. It remains to be seen how the Federal Institute for Drugs and Medical Devices (BfArM) would use its powers in this instance, and also interesting to see this trend with regards to an increasingly controversial topic in the US.

When laws are adopted quickly, they are necessarily adopted without all their nuances fully fleshed out. This trend is also common in the US where the responsibility to interpret and implement various statutes is left to the responsible regulatory agency, such as the Securities Commission or the Environmental Protection Agency.

Proponents for this trend argue that it is a necessary result of an increasingly complex world. The US Supreme Court decision in Chevron v Natural Resources Defense Council (1984) required judges to defer reasonable interpretation of statutes to a federal agency. Critics such as Columbia Law Professor and constitutional scholar Phillip Hamburger argue that this infringes on the constitution, as it entails that unelected bureaucrats are writing, interpreting and enforcing their own laws. According to Mr. Hamburger,

“Administrative power is like off-road driving. It’s exhilarating to operate off-road when you’re in the driver’s seat, but it’s a little unnerving for everyone else.”

It remains to be seen which way this direction will tilt in the long run as it addresses the political, judicial, fiscal, and in this instance, potential health cost of prototyping and “learning from failure.”

Introducing human-centered design principles and methodologies could inspire policy-maker discussions and policy solutions

Grahammer currently sits on a committee that has been set up and tasked by the Federal Health Ministry to advise on the implementation of DVG — specifically the prescription and reimbursement process. When asked how the committee conducts its brainstorm sessions and discussions — whether they are considering testing different solutions within various control groups or hospital systems, conducting empathy exercises to relate to the patients, sketching, role-playing, making physical models — his response is that the process involves the traditional methods of memo exchanges and draft comments. The appetite to disrupt even the means of collaboration and discussion between policy makers could be there. “We are open to setting up a new culture. This law is a completely green field for everybody and represents almost a fresh start…but it has not yet happened.” My memory of law school was also distinctly post-it and sharpie free, though things might have changed in the past decade…

DVG’s impact is potentially far reaching, even beyond the borders of Germany. Active engagement and use of some prototyping techniques on a small scale could preemptively surface unintended effects of this new law. According to my friend Tonia Sun, who works for a digital health startup called CaraCare, digital app manufacturers have been adjusting their processes to fit DVG. In some cases, the law actually changes the agile and cyclical nature of startup product development.

While she notes that overall the law is “such a valuable new model for delivering care to patients that emerging complexities are worth it,” the implementation of DVG could be designed to lessen some of the complexities for stakeholders.

For example, she shared with me some of the (perhaps unintended) impact the law will have on product development processes. “Because any major changes to the app (such as new features or content) need to be approved as a significant change, the version we submit for certification needs to be pretty final. This means we have shifted to a waterfall model of development rather than agile, trying to create the best version of the app possible for submission within the timeframe, instead of iterating in multiple versions via feedback from the market.” Apps that operate in multiple markets would thus have to adjust to these additional complexities to their product roadmap between Germany and the rest of the world.

DVG represents a significant step for Germany to leapfrog to the forefront of digital health

While most of the focus has been on the revolutionary nature of bringing apps into the realm of prescription therapies, DVG’s scope actually goes much further. It outlines an entire plan for the German healthcare ecosystem to be digitalized. For example, it recommends setting clear milestones to encourage stakeholders to adopt digitalization (e.g. Pharmacies by September 2020, Hospitals by January 2021), along with fiscal penalties for those that refuse or do not meet the aforementioned deadlines.

As Germany’s healthcare system features the second largest healthcare expenditure in the world, the law’s potential impact cannot be overstated. Perhaps inspired into action by a 2018 Bertelsmann survey placing Germany second last in their list of most innovative healthcare ecosystems, DVG could represent the accelerant for Germany to sprint to the forefront of digitalization by their 2025 goal. (In fact, since that survey in 2018, last-place Poland may have leapfrogged above Germany with 37 million e-prescriptions reported…)⁶

In a time where the Corona epidemic has perhaps not only swung the spotlight on the potential of digital solutions to supplement therapies and improve processes, but even accelerated its adoption worldwide, Minister Spahn is right in suggesting that the world is watching and hoping to learn from this latest German experiment.

Stay safe.

If you are also excited about #DigitalHealth #EuropeanStartups #JapaneseStartups — please reach out:



“Wir beschließen heute hier eine Weltneuheit. Da ist Deutschland ganz vorne. Wir werden das erste Land auf der Welt sein, dass das Klein-, — nicht das Klein-Klein -, das Wildwest, das klein-klein Wildwest — dass das Wild-West bei den Apps von heute beendet. Die Wahrheit ist doch, dass es heute überhaupt keine Orientierung gibt. Die Apps sind alle da, die kann jeder downloaden, die kann sich jeder herunterladen. Keiner sortiert mal: Welche App im Gesundheitswesen hat tatsächlich einen Mehrwert? Wo ist nicht nur schönes Marketing, nicht nur Gimmick, sondern wo ist ein tatsächlicher Nutzen für den Patienten in der Versorgung? Das führen wir zuerst ein.

Der zweite Schritt: Wir werden das erste Land auf der Welt sein, in dem die gesetzlichen Kassen das Ganze finanzieren, wenn es einen Mehrwert gibt. Wir zeigen damit für viele, viele andere, wie man es machen kann. Und ja, das ist auch ein Stück Neuland. Ja, wir werden zum ersten Mal Maßstäbe festlegen müssen, wie man einen solchen Mehrwert, einen Zusatznutzen von digitalen Gesundheitsanwendungen misst.”


“Anspruch” in §33a SGB V


“Mit dem Gesetz soll es Patienten künftig möglich sein, Gesundheits-Apps auf Rezept zu erhalten, Online-Sprechstunden einfach zu nutzen und überall bei Behandlungen auf das sichere Datennetz im Gesundheitswesen zuzugreifen. Schon heute nutzten viele Patienten Apps, die sie etwa dabei unterstützten, ihre Arzneimittel regelmäßig einzunehmen oder ihre Blutzuckerwerte zu dokumentieren, heißt es in dem Entwurf. Künftig sollen sie sich nach dem Willen der Bundesregierung aber solche Apps von ihrem Arzt verschreiben lassen können.”


“Und ja, es wird beim ersten Mal auch nicht alles perfekt sein — das sage ich Ihnen jetzt schon: Sie können Ihre Rede in sechs Monaten noch mal halten, weil irgendetwas schiefgegangen sein wird -, aber vielleicht sollten wir endlich mal anfangen, auch digitale Innovationen möglich zu machen. Wenn wir nur Bedenken haben, aber nie was möglich machen, dann passiert nichts.”

5. Strategy& “Weiterentwicklung der eHealth-Strategie: Studie im Auftrag des Bundesministeriums für Gesundheit

FN 21, pg 46: Pilotitis“ bedeutet in diesem Kontext das permanente Initiieren von Pilotprojekten (in der Regel in Förderprojekten), ohne das die in diesen Projekten erzeugten Piloten je zur Marktreife bzw. in die Regelversorgung gelangen. Die Folgen sind u. a. ein Mangel an aussagekräftigen Studienergebnissen durch viele kleine Anwendungen mit kleinen Studienpopulationen und geringer stat. Aussagekraft (Abbott 2013).


Venture Partner@NextBlue | X-@D4V (An IDEO VC) | X-@BCG Interested in #digitalhealth #edutech and living between Berlin and Tokyo

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