GERMANY | Summary

GDP: 3.846 Trillion USD1
Health Expenditure (% of GDP): 11.25%2
 

Populace3

Encyclopedia Britannica states that the first social insurance in the world was established in Germany in 1883 by Otto Von Bismarck with the Bismarck’s Health Insurance Act. Its primary goal was to provide insurance in the event of illness, mainly for workers involved in both industrial and non-industrial production.⁵ Initially this was limited to the blue-collared but members increased from 10% in 1885 to 37% by 1914, according to The Lancet. In 1914, statutory health insurance became mandatory for transport workers, commercial office workers, agriculture and forestry workers, domestic servants, itinerant workers, and white-collar workers. The core of social insurance in Germany has been solidarity, self-governance, and competition and is still noted in today’s system. Health insurance in Germany has gone through many reforms but has led to an efficient universal health coverage. The first program became unsustainable due to longer life expectancies and lower birth rates leading to a lower worker-to-pensioner ratio.⁶ However, after this was enacted, statutory accident insurance was introduced in 1884, pension funds in 1889, and unemployment insurance in 1927. Accident insurance covers medical services for work-related accidents or illnesses.⁷

 

From 1933 to 1945, under the rule of National Socialism, Germany’s health system shifted from self-administration to state-approved directors supervising each of the funds. The overall delivery of care has stayed the same through the decades in Germany but administration of insurance funds went through some changes. During the two states period from 1945 to 1990, East Germany adopted a socialist model health care system while West Germany reinstated the self-governance of insurance funds. After the reunification of Germany, West Germany’s self-governance approach to the health system was adopted nationally.⁸

 

After reunification, Germany ran into issues of rising healtcare costs because of an aging population, increase in demand for health care services, and emerging health care technology. This led to deficits and debts in the system. Sickness funds increased their contribution rates but those efforts did not  offset the rise of health care costs. Most of the legislation reform during this time was to create competition between the sickness funds to control health care expenditures. Although, these interventions were closely regulated to avoid risk-selection and other adverse effects of competition. In addition to those measures, there were more cost-containment interventions throughout the 1990s and 2000s. This included restrictions on rehabilitative benefits and dentures for people born after 1978. The First and Second Statutory Health Insurance Restructuring Acts in 1997 increased co-payments for inpatient care, rehabilitative care, pharmaceuticals, medical aids, and transportation to the hospital as well as an annual flat premium for restoration and repair of hospitals. In 2004, Insurance coverage for over-the-counter drugs and prescription eyeglasses were also removed. These exclusions were controversial and unpopular for some. By the end of the 20th century, about 87% of the population was covered by statutory health insurance, and Germany ranked among the world's highest in terms of the proportion of health care costs covered by the government.⁶

According to The Commonwealth Fund, Germany has universal health coverage provided by two systems, which are known as the Statutory Health Insurance (SHI) and the private health insurance (PHI). SHI consists of competitive not-for-profit health insurance plans that are privately run and are referred to as sickness funds. The statutory health is mandatory for individuals in Germany unless a person makes over 60,750 Euros which allows them to opt-out of SHI and purchase private insurance. Approximately 88% of the population receives primary coverage through the sickness funds and 11% through private insurance. The sickness funds are financed through wage contributions at 14.6% shared equally by the employee and employer. These contributions are collected in the Central Reallocation Pool, along with a tax subsidy of 14.5 Euros. The funds are then reallocated to the sickness funds according to a morbidity-based risk-adjustment scheme. Cost-sharing is low with these health insurance plans. Physician visits have no copay, hospital inpatient stays are 10 Euros a day and drugs range from 5 to 10 Euros. Children under 18 are exempt from all cost-sharing. Private health insurance funds are majority private and payment is based on the level of risk meaning older and sicker people pay more. PHI also has premiums as well as higher employee contributions. Although PHI covers some minor benefits that SHI doesn’t, SHI coverage is still comprehensive. It covers preventative services, inpatient services, outpatient services, prescription drugs, mental health, dental care, eye care, rehab, hospice care, physical therapy, and sick leave.⁴

 

Long-term care services are covered by another program known as the statutory long-term care insurance (LTCI). These plans are also managed by sickness funds and are financed by a wage contribution of 3.05% equally shared by employee and employer. People without children pay an additional 0.25% of their wages. About 25% of LTCI expenditures are in the form of cash payments. Both home and institutional care are provided almost exclusively by private not-for-profit and for-profit providers. Since benefits of LTCI only cover around 50% of institutional care costs, people are advised to buy supplementary private LTCI. Hospice care is partly covered by LTCI but the majority is covered by SHI.⁴

 

The majority of hospitals in Germany will treat patients, regardless of the type of insurance coverage that they have. Larger hospitals usually have some sort of financial backing from the state or municipality. Germany also has many hospitals that are charity-run or church-run by organizations such as the Red Cross or religious groups.⁷ There are many privately-run hospitals and some will only treat patients who have private coverage. Private hospitals tend to be smaller and more likely to be specialized. Outpatient care is characterized by self-employed doctors, dentists, and other health care professionals in their own practices. Outpatient doctors working in these private practices are split by 60% working in solo practices, 25% in dual practices, and 15% in group practices. Most doctors work on fee-for-service and there are preset maximum numbers of patients and a number of treatments for which a doctor can be paid each year. If a doctor goes over, they may not be paid.⁹ Patients can choose their primary care doctor, specialist, or hospital where they would like to receive care. There is no gatekeeping requirement but some plans will provide incentives to see a gatekeeper. The Commonweath Fund notes more than 75% of Germans are able to get same-day or next-day appointments with their doctors.⁴

Germany positive health outcomes for almost all of the population and very low prevalence of health disparities. The share of population reporting unmet needs for medical care is .3%, ranging between .8% in the lowest income quartile and .1% in the highest income quartile. These numbers suggest good access to care with few disparities. Low rates of health disparities are due to their priority has national health targets and extensive public health services carried out by the states.⁴ Their current population is 84 million, making it the largest country in the European Union, with 76.4% of the population living in urban areas. The racial/ethnic demographics in Germany are mainly European but a notable 14% of the population are immigrants or descendants of immigrants. The majority of those are from Eastern Europe, Southern Europe, and the Middle East.

 

Health Indicators³

Ethnicities¹¹

Age Structure¹²