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Germany Health Insurance
Some 92 percent of Germany's residents receive health care through statutory health insurance, that is, the GKV. As of late 1992, the GKV relied on about 1,200 nonprofit sickness funds that collect premiums from their members and pay health care provid
ers according to negotiated agreements. Those not insured through these funds, mostly civil servants and the self-employed, have private for-profit insurance. An estimated 0.3 percent of the population has no health insurance of any kind. They are general
ly the rich who do not need it and the very poor, who receive health care through social assistance.
Sickness funds are divided into two categories: primary funds and substitute funds. Workers earning less than the periodically revised income ceiling are required to belong to the primary funds; those earning more than this ceiling may be members on a
voluntary basis. Some primary-fund members have a choice of funds. Others do not and become members of a particular fund because of their occupation or place of residence. According to figures from the Ministry of Labor and Social Affairs for late 1992, o
f the six types of primary funds, local sickness funds, then about 270 in number, are the most important. Organized geographically, they supply about 46 percent of the insured workforce with health insurance. About 800 company-based funds, located in firm
s with more than 450 employees, cover about 11 percent of workers. Some 180 occupational funds organized by craft cover another 2.5 percent. There are three other kinds of primary funds (about two dozen in all); they supply insurance for self-employed far
mers, sailors, and miners and cover about 4 percent of the workforce. There are also two kinds of substitute funds; they provide health insurance to white-collar and blue-collar workers earning more than the income ceiling. Substitute funds are organized
on a national basis, and membership is voluntary. Such funds cover about 34 percent of insured workers.
Employers and employees each pay half of a member's premiums, which in the first half of the 1990s averaged between 12 and 13 percent of a worker's gross earnings up to the income ceiling. Premiums are set according to earnings rather than risk and are
not affected by a member's marital status, family size, or health; they are the same for all members of a particular fund with the same earnings. In a household with two wage earners, each pays the full premium assessed by his or her sickness fund. The u
nemployed remain members of their sickness fund. Their contributions are paid by federal and local government offices, with one-third coming from local social assistance offices. The contributions of retirees are paid by the pensioners themselves and by t
heir pension funds. Thus, the public health insurance program redistributes from higher to lower income groups, from the healthy to the sick, from the young to the old, from the employed to the unemployed, and from those without children to those with chi
ldren.
Because some funds have poorer overall health profiles than others as a result of the occupations of their members, the number of dependents and pensioners among its members, or other factors, premiums can range from as low as about 6.5 percent to as m
uch as 16.0 percent of a member's gross earnings. To counter this inequity, a national reserve fund makes payments to funds with high numbers of pensioners. The GSG of 1993 mandates an equalization of contribution rates across all sickness funds by author
izing payments to funds burdened with health risks associated with age and gender.
About 11 percent of Germans pay for private health insurance provided by about forty for-profit insurance carriers. A good portion of those choosing private insurance are civil servants who want insurance to cover the roughly 50 percent of their medica
l bills not covered by the government. Some sickness-fund members buy additional private insurance to secure such extras as a private room or a choice of physicians while in a hospital. Otherwise, the medical care provided to the publicly and privately in
sured is identical, and the same medical facilities are used. Self-employed persons earning above the income ceiling must have private insurance. Members of a sickness fund who leave it for a private insurance carrier will generally not be allowed to retu
rn to public insurance.
Although private insurance companies pay health care providers about twice the amount paid by the primary sickness funds, private insurance is often cheaper than statutory health insurance, especially for policyholders without dependents. As is the cas
e for members of sickness funds, employees who have private insurance have half their premiums paid by their employers. German private health insurance is unusual in that whatever the insured person's age, his or her premium will remain that set for his o
r her age cohort when the policy initially was taken. Premiums rise only according to increases in overall health care costs. Policyholders generally stay with their original policy because if they change companies, they will pay the higher rates of an ol
der age cohort.
Health Care Providers
Germany's principal health care providers are its physicians, dentists, and three types of hospitals (public, private nonprofit, and private for-profit). The health industry also includes large pharmaceutical companies and the manufacturers of various
kinds of medical supplies. Public health departments, which are operated by the Länder
, are not an important part of German health care. The public health clinics in the new Länder
are being phased out during the integration of the two medical systems.
Germany's supply of physicians is high. Students who meet academic requirements have a constitutionally guaranteed right to study medicine. This fact, plus an excellent and inexpensive university system, has resulted in the country's educating physicia
ns at a much higher per capita rate than the United States. Between 1970 and 1990, the number of physicians in the former West Germany more than doubled, and in 1991 the country had 3.2 physicians per 1,000 population, a higher ratio than most other membe
rs of the Organisation for Economic Co-operation and Development (OECD--see Glossary). (In 1990 the United States rate was 2.3 per 1,000.) With 11.5 physician visits per person per year in 1988, West Germans and Italians went to a doctor more frequently t
han other Europeans. (In 1989 the United States rate was 5.3 visits per person per year.) Even so, expenditures to physicians per capita amounted to less than half (US$193) of those in the United States (US$414).
German physicians have good incomes (dentists earn even more), although their average earnings have declined from six to three times the average wage since efforts at cost containment began in the 1970s. The high number of physicians could reduce physi
cians' earnings still further. In addition, many young physicians face unemployment. The GSG of 1993, for example, mandates a reduction in the number of office-based physicians who treat GKV patients (generally about 90 percent of physicians join the asso
ciation that allows them this practice). The law also has the long-term goal of limiting the number of specialists in geographic areas where they are overrepresented.
German health care makes a sharp distinction between physicians who provide office-based or ambulatory care and physicians who work in hospitals. Office-based physicians are fee-for-service entrepreneurs whose incomes depend on the amount and kinds of
medical care they provide. In contrast, hospital physicians are salaried employees of the hospitals in which they work. Very few hospital physicians are permitted to bill their patients. Until recent health reform legislation, the two types of physicians
did not work together. Once an ambulatory-care physician decided that a patient should enter a hospital (only in emergencies could a patient go directly to a hospital), the patient's care was entirely taken over by a hospital-based physician. When a patie
nt left the hospital, by law he or she again came under the care of an office-based physician. Since the late 1970s, hospital-based physicians have outnumbered ambulatory-care physicians. In 1990 there were about 96,000 of the former and 75,000 of the lat
ter in the old Länder
.
The GRG aimed at encouraging a better integration of office and hospital care, but little progress was made. The GSG of 1993 intended to lessen the traditional division by, among other reforms, making it possible for hospital-based physicians to see th
eir patients after their release from the hospital. It is expected that lessening the separation of the types of medical care will reduce overall health care costs, but as of mid-1995 no marked successes in achieving this goal had been noticed. Additional
ly, new budgeting rules that go into effect in 1996 may cause outpatient surgery, still unusual in Germany, to become more common by making it more profitable for hospitals.
The ownership of hospitals (there were a total of about 3,100 hospitals in the early 1990s) is the outcome of historical development and regional traditions rather than conscious policy and has resulted in three types of hospitals: public, nonprofit, a
nd private for-profit. Each type accounts for about one-third of the hospitals. Public-sector hospitals are mostly owned by the Länder
, municipalities, and counties and provide about 50 percent of all hospital beds. Nonprofit hospitals, typically run by Catholic or Protestant organizations, provide about 35 percent of the beds, and for-profit hospitals account for 15 percent.
Germany has too many hospital resources. In 1988 the ratio of 10.9 patient beds per 1,000 population in the former West Germany was higher than the OECD average. The number of admissions as a percentage of the total German population was 21.5 percent,
significantly above the OECD average of 16.1 percent. The average length of stay of 16.6 days was below the OECD average but quite high by United States standards. Germany's inpatient occupancy rate was 86.5 percent, also fairly high by international stan
dards.
Between 1972 and 1986, the federal government and the Länder
were jointly responsible for hospital policy making, but in 1986 the Land
governments once again assumed sole responsibility. Länder
own and partially finance medical school hospitals and accredited teaching hospitals. They enforce accreditation and licensing of health facilities and of health professionals working in social services. The Länder
are responsible for policy development and implementation of social and nursing services, social assistance, youth services, and social work. Most important, the Länder
remain responsible for the effective and efficient allocation and distribution of hospital resources.
Data as of August 1995
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