While returning from a recent vacation in Berlin, an article in Germany’s leading weekly magazine Der Spiegel on the German health care system caught my eye. Entitled “Das Tollhaus” or “the madhouse,” it’s a rather scathing of exactly what has gone wrong with the recent health reforms in Germany – and a perfect indication of why Americans should spend a little less time debating health care in Canada and the UK and a little more looking elsewhere in Europe. To help in this effort, this will be the first of two posts looking at what Germans have to say about this own system.
To most Americans, the German health care system probably looks surprisingly familiar: citizens mostly get health coverage through their jobs, insurance is purchased from Krankenkassen or “sickness funds” that administer premiums and pay doctors and hospitals for care, and visits to the doctor often require a co-pay. But that is slowly changing in response to many of the same problems that plague the US debate, chief among them the affordability of coverage, both on a national level and an individual one. The solutions too are similar – and therein lies Germany’s instructive power for American would-be reformers.
Let’s start with universal care. Germany was actually a late comer to the concept and it was only as of the start of this year that every citizen had to have coverage. The results for premiums, however, have been immediate. Until this year, each sickness fund set its own premium and they averaged around 14.9 percent of payroll. But last October, a new national premium of 15.5 percent was announced for 2009, the highest ever. In July, it will go back down to 14.9 percent as part of Germany’s stimulus package.) Der Spiegel explains:
In past years, half a million premium payers used the ability to switch from a more expensive sickness fund to a lower priced one. In the tightly regulated sector the different premiums provided a whiff of competitions. However the government set premium now apply and already prepare the way to a single payer. Almost twenty sickness funds, including some that previously had particularly low premiums, have already disappeared. (All translations mine.)
Cost has also left some Germans outside of the supposedly universal system, unable to pay for coverage, ineligible for subsidies for the poor, and subject to government penalties if caught. One example is Kornelius C., 57 years old and self employed, who relies on his doctor girlfriend and her colleagues to take care of him because he is uninsured and has an unreliable income. But he isn’t alone. “The problem is that many of those concerned never know how they will pay for coverage. C. was a candidate for the new basic rate for…health coverage. The premium lies at €570 a month…He says he cannot muster this sum even with the best will.” There is one way for C. to pay for his health care coverage, he is eligible for a reduction in the premium and a government subsidy, but it would require that he cease living with his girlfriend.
It isn’t only citizens who face being unable to pay health care costs. The state is also in the red, it will have to put more money than planned into the health system this year and with billions in deficits as a result. One reason is the creation of redundant structures to administer the system and “zombie bureaucrats,” who no longer have any work to do but whose jobs will exist for another three years. The sickness funds are short of funds as well, they will probably have to charge their members additional premiums. But they are given little room to collect extra money since those insured cannot be asked to pay more than one percent of their income. That may mean the loss of more sickness funds if they go broke.
Finally, doctors are unhappy with their reimbursement and facing the same dilemma as their American counterparts: the present structure rewards doctors “who sluice as many patients as possible in the shortest time possible through their practices. The younger the doctor’s patient clientele is, the more he earns…Potential losers are any doctor who takes time for the patients. Also retired people are bad for the budget.”
However, the incentive to take on healthy, easy to treat patients is only one force acting on doctors, as we will see tomorrow when I look at the perverse inducements created by the system to make patients sicker, not healthier. So stay tuned. In the meantime, for more information on the German health care system and how it works, check out BigGovHealth, the international health care site of the Center for Medicine in the Public Interest (the public policy institute home of drugwonks.com).
