One of the most common arguments for changing the US health care system is cost. After all, just about every other country spends less both per capita and as a percentage of GDP than the US does, often substantially less.
This is well-illustrated by a story last week on precipitously rising costs for drugs and payments to doctors has destroyed attempts to hold down costs and produced billions in deficits. With health care threatened by these shortfalls, the government may need to fill the gap with tax money.
Just another day in the collapse of the US healthcare system. Not quite. This article comes not from The New York Times or The Wall Street Journal, although the outlines of the story are all too familiar to Americans. Rather the story comes from the German news publication Der Spiegel.
The German health care system is looking at a 3 billion euro hole in its finances as the non-profit insurers that administer coverage, known as Krankenkassen or sickness funds, find that they do not have enough in their coffers to fund the medical expenses of their members. Officials at the sickness funds predict that the gap between income and expenses may be even higher, 4 million euros, next year. And this is just the public system, which includes about 90 percent of Germans. The rest participate in a separate private system.
They are seeking more money from the government. The state, however, has indicated that the sickness funds themselves are responsible for closing the hole since they have already been loaned government money. As a result, 4.5 million Germans, belonging to 16 sickness funds, will see their premiums go up in July. The additional charge can be up to one percent of household income.
The German system has been feeling the pressure of increasing medical costs for a long time, for many of the same reasons that the US is. The steadily escalating price tag of new drugs and procedures, and the free access that citizens are given, has contributed to putting both countries in the red. Doctors have also found themselves dissatisfied at their reimbursement rates, an area that has often been targeted in both countries as a way to hold down the system’s cost. This disgruntlement actually sent doctors on strike in Germany a few years ago.
There is another factor affecting Germany’s current health care financing woes, however, and one that sounds a cautionary note about the fiscal consequences of universal coverage. Germans pay for coverage through a payroll tax on their wages, split with their employer, but they don’t lose it if they lose their jobs. With the rising unemployment rate and an increasing number of people working short jobs or restricted hours, the amount of money going to fund the health care system has gone down significantly. Making sure citizens who are out of work get care is something most Americans support, but we must look open eyed at the potential cost that comes with that.
So the next time you hear statistics about health care costs around the world, remember that anyone who believes that other systems have been spared the cost concerns that have long dogged the US system is sorely mistaken.
German speaking readers can find the original story here.
