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The German Healthcare System and Some Thoughts About the EU. Lecture 8 Tracey Lynn Koehlmoos, PhD, MHA HSCI 609 Comparative International Health Systems. Germany. Official name: Federal Republic of Germany Population: 82.4 million Capital: Berlin Government: Federal Republic

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The German Healthcare System and Some Thoughts About the EU

Lecture 8

Tracey Lynn Koehlmoos, PhD, MHA

HSCI 609 Comparative International Health Systems


  • Official name: Federal Republic of Germany

  • Population: 82.4 million

  • Capital: Berlin

  • Government: Federal Republic

  • Divisions: 16 states (Länder)

  • Largest country in Europe

German health update

  • Life Expectancy: 75.8 m/ 81.9 f (2006)

  • Infant Mortality: 4.1 per 1000 (2006)

  • Population >65: 19.4% (2006)

  • Leading mortality causes: 50% heart disease, 25% cancer (more heart disease and lung cancer than other European nations)

  • Health care expenditures as % of GDP: 11.1 (2003)

  • Health care expenditures per capita: $2,996 US

Political-Historic Impact on Health

  • In 1991, the five states of the German Democratic Republic (communist, East Germany) reunited with the Federal Republic of Germany (West Germany)

  • This reunification brought down the statistics used to indicate health status of the nation (particularly infant mortality and life expectancy)

  • There continues to be disparities between the two regions but the gap is closing

    • Cleaner environment

    • Adoption of the FRG’s healthcare system

History of the System

  • Germany is noted for being the first nation to introduce any form of social security

  • 1883, the Bismarck System made nationwide health insurance compulsory

  • Later additions include:

    • Work related accident and invalidity (1884)

    • Old age and disability (1889)

    • Long Term Nursing Care (1994)

Guiding Principles

  • Principle of Social Solidarity: a nation is responsible for the provision of social systems for its citizens (to include health care)

  • All members should have access regardless of ability to pay

  • The cost is spread across the population via income-based premiums (rather than risk-based premiums)

General Information

  • Most comprehensive system of benefits offered by any nationalized insurance scheme

    • Primary, specialist care

    • Vision

    • Dental

    • Pharmaceuticals

    • Alternative therapies

    • Some spas (health farms)


  • Ministry of Health—highly decentralized

  • 16 Länder--share decision making power

    • None have specific health departments but share with Labor and Social Services

  • Corporatism: further power is delegated to statutory insurance schemes

    • Hands over rights of the state to self governed institutions

    • Corporatists institutions have mandatory membership and the right to raise their own fund reserves

Subordinate to the Ministry of Health

  • Fed. Inst. of Pharmaceutical & Med. Devices

  • German Inst. For Medical Documentation & Information

  • Fed. Inst. for Communicable & Non-Communicable Diseases (like our CDC)

  • Fed. Inst. For Sera & Vaccines

  • Fed. Inst. For Health Education

  • Fed. Inst. For Health Protection of Consumers & Veterinary Medicine

How it Works…

Regional healthcare systems are managed by sickness funds and physician associations

Sickness funds: regional groupings or employment based third party payer insurance companies

The Feds and the States are responsible for hospital planning and upkeep

Financing the German Healthcare System

  • 60% Compulsory & voluntary contributions to statutory health insurance

  • 21% General taxation

  • 11% Patient payments (modest co-payments)

  • 7% Private Insurance

  • If you earn less than ~ $40K you must carry sickness insurance

  • Amount of premium RAISES according to increased salary from 8.5 to 17%

General Financial Issues and Woes

  • At present income to the healthcare system exceeds expenditures

  • However, with the aging population, negative population growth rate (-.2 for 2006), and higher expenditures—a healthcare deficit looms large in the future without change.

Sweeping changes

  • Emergence of diagnosis related groups (DRGs)

  • Implementation of disease management programs (DMPs)

  • “Positive list” in the pharmaceuticals sector

    • Germans drug expenditures consume 14.6% of total health care expenditure (highest in world)

    • German physicians write an average of 11 prescriptions per patient

Complex Physician Payment

  • Physicians do not have a relationship with the insurers

  • The insurers pay regional physicians’ associations

  • The associations pay physicians from a capitated pool

  • If a physician is using too many resources, he receives a warning to cut back from the association

Health Services Workforce

  • Physicians—Surplus! High salaries!

    • 3.4 per 1000 population

    • 55% are generalists

    • Most generalists are in private practice but belong to professional association to negotiate rates

    • Patients have full choice of GP or specialists in private practice

    • Generalist are “gatekeepers” to hospitals and specialists—so are often skipped

    • Specialists—in public hospitals--salaried

Health Services Workforce

  • Nurses

    • 9.7 nurses per 1000 population

    • Traditionally the domain of nuns and/or lower class women (a nurse is called “sister”)

    • Mostly hospital based diploma programs

    • Nurses work directly under physician direction

    • Germany has a long standing shortage of nurses

    • Many hospital-based midwives delivering babies for physicians


  • 831 public hospitals

  • 835 independent, not-for-profit (denominational)

  • 374 private hospitals

  • For Operating Costs: Hospitals negotiate with Krankenfunds (prospective payment)

  • For Capital Investment: the Länder

Long Term Care

  • Added in 1995 as a fifth pillar of social insurance services

  • Pflegeversicherung

  • Financed through employment related insurance payments ~2% of monthly salary

  • Families are considered in “means testing” for funded nursing home care

  • There is a dichotomy between social and healthcare services

Compared to US

  • Germany has 2nd highest percent of GDP spent on health care in the world

  • According to the 2000 WHO study:

    • Germany's health care system: #6 in fairness of financial burden, #14 in overall goal attainment, and #14 in terms of overall performance.

    • America's system: 54th in financial fairness, 15th in goal attainment, and 37th in overall performance.

The European Union

  • I would be remiss not to address the importance of the expansive impact of the EU on its member states

  • The EU acknowledges the necessity of access to health services for all people as a means of reducing poverty and suffering

  • The guiding principles: cost, quality, access

More EU and healthcare

  • In 2000, health care accounted for 27.3% of all social protection expenditures in the EU-15 (2nd only to retirement pensions)

  • The EU is working to establish a “Global Strategy for Healthcare Systems” to enable citizens of member states to have portability and/or access to health care as they are free to live and work in other member states.

European Health Insurance Card

  • Issuance of European Health Insurance Card

  • Started June 2004

  • Applicable for European citizens traveling within the European Economic Area (European Union, Norway, Iceland and Liechtenstein and Switzerland)

  • For use due to a medical necessity while temporarily visiting another country

  • The card guarantees quick refund/payment for health services received at public facilities abroad.

More EU

  • The EU mantra for health planning is “open method of coordination”

  • Major issue of concern: the aging of the European population

    • Over 65’s to increase 64% between 2010 and 2050

  • Will we see a unified EU healthcare system any time soon?

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