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Germany does well in international health care comparisons. In 2004 Germany ranked thirtieth in the world in life expectancy (78 years). It had a very low infant mortality rate (4.7 per 1,000 live births), and it was tied for eighth place in the number of practicing physicians, at per 1,000 people (3.3). In 2001 total spending on health amounted to 10.8 percent of gross domestic product.^[1]

Health care in Germany

Germany has Europe's oldest universal health care system, with origins dating back to Otto von Bismarck's Social legislation, which included the Health Insurance Bill of 1883, Accident Insurance Bill of 1884, and Old Age and Disability Insurance Bill of 1889. As mandatory health insurance, these bills originally applied only to low-income workers and certain government employees; their coverage, and that of subsequent legislation gradually expanded to cover virtually the entire population.^[2]

Currently 85% of the population is covered by a basic health insurance plan provided by statute, which provides a standard level of coverage. The remainder opt for private health insurance, which frequently offers additional benefits. According to the World Health Organization, Germany's health care system was 77% government-funded and 23% privately funded as of 2004.^[3]

The government partially reimburses the costs for low-wage workers, whose premiums are capped at a predetermined value. Higher wage workers pay a premium based on their salary. They may also opt for private insurance, which is generally more expensive, but whose price may vary based on the individual's health status.^[4]

Reimbursement is on a fee-for-service basis, but the number of physicians allowed to accept Statutory Health Insurance in a given locale is regulated by the government and professional societies.

Co payments were introduced in the 1980s in an attempt to prevent over utilization. The average length of hospital stay in Germany has decreased in recent years from 14 days to 9 days, still considerably longer than average stays in the United States (5 to 6 days).^[5][6] Part of the difference is that the chief consideration for hospital reimbursement is the number of hospital days as opposed to procedures or diagnosis. Drug costs have increased substantially, rising nearly 60% from 1991 through 2005. Despite attempts to contain costs, overall health care expenditures rose to 10.7% of GDP in 2005, comparable to other western European nations, but substantially less than that spent in the U.S. (nearly 16% of GDP).^[7]

Insurance systems

Germany has a universal multi-payer system with two main types of health insurance. Germans are offered three mandatory health benefits, which are co-financed by employer and employee: health insurance, accident insurance, and long-term care insurance.

Accident insurance (Unfallversicherung) is covered by the employer and basically covers all risks for commuting to work and at the workplace.

Long term care (Pflegeversicherung) is covered half and half by employer and employee and covers cases in which a person is not able to manage his or her daily routine (provision of food, cleaning of apartment, personal hygiene, etc.). It is about 2% of a yearly salaried income or pension, with employers matching the contribution of the employee.

There are two separate systems of health insurance: public health insurance (Gesetzliche Krankenversicherung) and private insurance (Private Krankenversicherung). Both systems struggle with the increasing cost of medical treatment and the changing demography. About 87.5% of the persons with health insurance are members of the public system, while 12.5% are covered by private insurance (as of 2006).^[8]

Public insurance

All salaried employees must have a public health insurance. Only public officers, self-employed people and employees with a gross income above ca. 50000 EU (adjusted yearly) may join the private system.

In the public system the premium

• is set by the Federal Ministry of Health based on a fixed set of covered services as described in the German Social Law (Sozialgesetzbuch - SGB), which limits those services to "economically viable, sufficient, necessary and meaningful services"
• is not dependent on an individual's health condition, but a percentage of salaried income (typically 10-15%, depending on the public health insurance company one is in, where half of that is paid by the employer)
• includes family members of any family members, or "registered member" ( Familienversicherung - i.e. husband/wife and children are free)
• is a "pay as you go" system - there is no saving for an individuals' higher health costs with rising age or existing conditions.

With an aging population, there is an intrinsic risk that, in the long, run the burden to be carried by the young and working generations for the higher share of elderly will run the public system into a huge deficit or result in high premiums.

Private insurance

In the private system the premium

• is based on an individual agreement between the insurance company and the individual defining the set of covered services and the percentage of coverage
• depends on the amount of services chosen and the individual risk and entrance age into the private system
• is used to build up savings for the rising health costs at higher age (required by law)

The private system is said to be more stable to a changing demography, due to the savings accumulated over time. However with life expectancy rising the premium will also eventually rise for individuals.

Ongoing discussion and reforms

Health reform (Gesundheitsreform) is an ongoing topic in German federal politics.

The health care reform law that took effect on January 1, 2004, aimed at reducing health insurance costs and required payroll deductions. Costs were to be reduced by introducing more competition into the health care system and requiring higher co-payments by the insured. Related savings were estimated at US$12 billion in 2004 and US$26 billion in 2005. In conjunction with the cost reductions, payroll contributions were expected to decline below 14 percent in 2004 and below 13 percent in 2005.^[1]

There is always discussion about the benefits of the 2 parallel systems:

• Generally the private system gives its members a good protection at young age, allowing doctors to charge higher fees and offer wider services. Therefore private patients find it typically easier to get a treatment. However with increasing age the private premiums rise, when having children and family there is a premium for each individual and there are only very few ways to go back to the public system.
• The public system is working with budgets for regions and treatment types. That may make doctors, in whose region the budget has been overrun, to postpone treatments to the next budget period, therefore deteriorating patients service. Especially for young working singles the premiums for public insurance are higher than in the private system.
• The treatments covered by the public system are decided by the health ministry, which has so far always resulted in decreasing coverage.

Major diagnosis

In 2002 the top diagnosis for male patients released from the hospital was heart disease, followed by alcohol-related disorders and hernias. For women, the top diagnoses related to pregnancies, breast cancer, and heart weakness. At the end of 2004, some 44,000 Germans, or less than 0.1 percent of the population, were infected with human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS). In the first half of 2005, German health authorities registered 1,164 new infections; about 60 percent of the cases involved homosexual men. Since the beginning of the HIV/AIDS epidemic, about 24,000 Germans have died from the disease. Widespread smoking also has a deleterious impact on health. According to a 2003 survey, 37 percent of adult males and 28 percent of adult females in Germany are smokers.^[1]

References