Unbiased Analysis of Today's Healthcare Issues

Health Care Reform in Germany

Written By: Jason Shafrin - May• 04•10

Health care in Germany achieves universal health care by mandating that individuals enroll in a sickness fund.  The German government requires lower and middle class individuals to enroll in the sickness funds, but richer individuals can opt out and choose to purchase their own private health insurance.  Approximated 9% of Germans have supplemental insurance; these private, supplemental insurance covers items not paid for in the sickness fund benefit package.  Most Germans like this system.

Yet the Economist reports that all is not  well in the German health care system.  Like Medicare in the U.S., the German sickness funds are funded by payroll taxes.  However, with an aging population and stagnant wage growth from the economic slowdown, paying for the increasing cost of medical care is becoming a burden.   Health care spending has not risen as quickly as in the U.S., party due to reforms such as the implementation of “disease management” programs to standardise care for ailments like diabetes, as well as lump-sum payments to hospitals that discourage over-treatment.

Philipp Rösler, the federal health minister, plans to institute a number of reforms to the health care system.  These include: 1) creating an agency to determine drug effectiveness relative to existing ones, and 2) “vouchers.”

According to the Economist, drug spending in Germany has increased by two-thirds in the past decade. To combat this trend, “Dr Rösler proposes the creation an independent agency will evaluate whether new drugs outperform existing ones. If so, manufacturers will have to negotiate prices with insurers, and submit to mediation if they do not agree.”  One wonders whether this agency will act more like the FDA–which determines effectiveness of a drug regardless of cost–or Endgland’s NICE–which determines not only whether a drug is effective, but whether these health improvements are worthwhile considering the drug’s cost.

Additionally, Dr Rösler proposes creating a voucher-type system. “Dr Rösler’s boldest idea is to convert  part of employees’ payroll contributions into a flat health premium. The aim is to decouple rises in health spending from labour costs and to give insurers a means to reward health-enhancing (and money-saving) behaviour. Although cleaning ladies would pay the same premium as chief executives, Dr Rösler would give low earners a subsidy. So even Germans rich enough to opt out of the statutory health system would help to pay for it.”

One reform not on the table is opening up physician-owned outpatient clinics to private investors.  Practices with multiple doctors can save on overhead and administrative costs through economies of scale.  “But the government wants to restrict financial investors in such clinics to minority stakes. Doctors’ practices ‘have to put the patient in first place, not profit,’ says Dr Rösler. To outsiders, this looks like a surrender of liberal principles to producer interests.”

Although many call for U.S. health reform to transform to the countries system to look more like Germany, rising medical costs and an aging population are serious challenges that all developed countries must now face.

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Comment

  1. […] A reminder from Germany how not to reform the NHS. costs have soared, drug bills increased & easy Operations increased. GA_googleAddAttr("AdOpt", "1"); GA_googleAddAttr("Origin", "other"); GA_googleAddAttr("theme_bg", "f9f9f9"); GA_googleAddAttr("theme_border", "bcc5c1"); GA_googleAddAttr("theme_text", "333333"); GA_googleAddAttr("theme_link", "CC0000"); GA_googleAddAttr("theme_url", "575b59"); GA_googleAddAttr("LangId", "1"); GA_googleAddAttr("Autotag", "health"); GA_googleAddAttr("Tag", "politics"); GA_googleAddAttr("Tag", "asthma"); GA_googleAddAttr("Tag", "care"); GA_googleAddAttr("Tag", "health"); GA_googleAddAttr("Tag", "illness"); GA_googleAddAttr("Tag", "lansley"); GA_googleAddAttr("Tag", "libdems"); GA_googleAddAttr("Tag", "nhs"); GA_googleAddAttr("Tag", "tories"); GA_googleAddAttr("Tag", "tory"); GA_googleFillSlot("wpcom_sharethrough"); Share this:TwitterFacebookRedditLike this:LikeBe the first to like this post. […]

Leave a Reply

Your email address will not be published. Required fields are marked *