Health Care in Germany
David G. Green, Ben Irvine and Ben Cackett (2005)
With the exception of about 2 million permanent civil servants, and the self-employed, Germans who earn below Euro 3,862 gross salary per month in 2004 must join one of the 300 statutory sickness funds. Those above the mandatory insurance threshold may opt out of the state system and buy private insurance instead but many opt to remain in the state system - 10 per cent of the population are voluntarily insured.
German sickness funds are required to be financially self-sufficient and premiums are set as a percentage of income. This percentage varies from fund to fund, with an average of 14 per cent, to fall to 13 per cent under Schroeder reforms. The premiums are deducted from pay packets with employer and employee paying half each.
Since the early 1990s German governments have been trying to increase competition. Insurers can easily be compared on the Internet, and for those without web-access, there are magazines and rankings by independent consumer organisations. The result has been a large-scale shift away from the traditionally dominant funds, although competition is muted compared with America.
People who have seen a large chunk of their pay packet disappear each month make demanding patients and expect both immediacy of treatment and value for money. They 'shop around', go for second opinions, and change doctors frequently. No money changes hands at the point of service. Instead, physicians are reimbursed by sickness funds via their regional physician associations. People who have opted for private insurance, however, generally pay by invoice for treatment received.
The real contrast is not between public and private, but monopoly and competition. Some workplaces make it hard for even well-motivated employees to give of their best, and some make it easy. Can anyone honestly say that the NHS brings out the best in people? Morale is low, recruitment is now reliant on people from overseas, and retention of experienced staff increasingly difficult. We need to learn from other European countries where public sector workers do not have the same ideological hang-ups.
In Germany, hospitals are under diverse ownership, which further encourages competition and constant efforts to raise standards. In 2002 around 54% of hospital beds were in the public sector, about 38% were run by private, non-profit organisations and some 8% were private, for-profit institutions.
If you walk along a typical British high street in search of healthcare professionals you might see an optician, probably a pharmacy, and maybe a dentist, but to see a heart specialist, a dermatologist, an ear, nose and throat specialist, or a paediatrician, not to mention a smattering of GPs, nestled in between Macdonald's, Dixon's and W.H. Smith's would be unusual unless you shop in Harley Street.
Not so in Germany, where queueing up in a hospital outpatient department to see a specialist is largely unknown. First, Germans are free to visit any doctor they like. They may either walk in off the street, or ring for an appointment that will invariably be booked for the same morning or afternoon. Consumers can and do penalise bad service. Our recent study of German consumers commonly produced reactions like this: 'I saw a long queue, so hopped on the tube and went to a different practice'; 'she was rather ill-tempered so I never went back'; 'the facilities were drab, so I went to a different one next to my office'; 'I felt rushed at his practice so didn't go back'.
Second, Germans do not have to see a GP before visiting a private specialist. GPs do act as gatekeepers to German hospitals, but about half of all specialists practice outside the hospitals. German hospitals provide few out-patient services. Instead, there are a large number of independent clinics, invariably with the most sophisticated diagnostic equipment. Most Germans have a favourite GP, although many maintain a relationship with more than one - just in case - but if they need to see a specialist they would not waste time seeing a GP first.
Third, there are plenty of specialists. Germany has 2.3 practising specialists for every 1,000 people, compared with only 1.5 in the UK.
What about the unemployed?
A distinction is made between those who have previously been in work and those who have not. The majority who have previously worked are included in the national insurance system, but instead of the employers paying, the benefits agency pays. For unemployed people who have never worked (about one-third of the unemployed in Germany) provision is made through a social fund (the Sozialamt) which arranges cover directly with doctors or through one of the AOKs (Allgemeine Ortskrankenkasse) the local funds of last resort which cover about one-third of the population.
What problems are there in Germany? The German media is not excited by the subject. There are no patients lying on trolleys in A&E. Germany suffers no real rationing. Yes, problems occur from time to time. Just at the moment, there is a shortage of nurses, and many Germans feel that care is expensive, but serious complaints are few. Nevertheless, reform is in the air. Since January 2004 members of the statutory insurance plan have had to pay 10 euros per quarter to see a GP. The reforms also saw the introduction of charges for non-prescription drugs, and an end to free treatments such as health farm visits and to free taxi rides to hospital. This is expected to allow for a reduction in premiums from an average of 14 to 13 per cent of annual gross wages.
German satisfaction rates in 1996, the latest Eurobarometer survey, showed that the German are far more satisfied with their system than we are with the NHS. About 11 per cent of Germans said they were 'very or fairly dissatisfied', compared with 41% per cent here. And when asked whether their system needed 'fundamental changes' or a 'complete rebuild' 19 per cent of Germans said 'yes', compared with 56 per cent of Britons.
Does the German healthcare system deliver an acceptable standard of care for serious illness to all members of society? Do the poorest in society benefit from a higher standard of healthcare provision than those in the UK? The answer to both of these questions is an emphatic, 'yes'.
What can we learn? In Germany insurance provides a connection between the people who go out to work and earn their keep and the resources available to healthcare providers. Our reliance on taxation makes it impossible for us to judge whether or not we are receiving value for money. The majority of the population who pay their national insurance contributions accept that they must also pay for the poor, but there is no expectation that in order to ensure access for all there must also be public sector monopoly. On the contrary, the Germans have successfully combined consumer choice and access for everyone. It is true that the rich can always buy a premium service. They can and do in the UK. But German policy makers do not waste their time trying to stop some people from ever getting more than anyone else. They focus on ensuring that the standard of care available to the poorest people is acceptably high.
The lessons are that responsible consumer choice means that there must be both consumer payment and competition between providers. Most other countries have long recognised these realities.
For the full study click on the link below (PDF):