Health care system in Germany

1. Health Care
System in
Germany
Saiqa Shams
85-B

2. Demographic characteristic of the country
• Germany is a country located in central Europe, with a population of
approximately 83 million people.
• The median age in Germany is 45.9 years, and the life expectancy at birth is
80.9 years.
• Aging population: 21% of population is 65 and older (2020)
• Birth rate: 9.3 births/1000 population (2021 estimate).

3. The Bismarck Model (Social Health
Insurence Model)
• The Bismarck model was created near the end of the
19th century by Otto von Bismarck as a more
decentralized form of healthcare.
• Within the Bismarck model, employers and employees are
reponsible for funding their health insurance system
through “sickness funds” created by payroll deductions.
• Private insurance plans also cover every employed
person, regardless of pre-existing conditions, and the plans aren’t profit-based.
• Providers and hospitals are generally private, though insurers are public. In
some instances, there is a single insurer (France, Korea). Other countries,
like Germany, Czech Republic, have multiple competing insurers. However,
the government controls pricing, much like under the Beveridge model.

4. Organization and administration of Health
care system
• The Federal Ministry of Health:
• The Federal Ministry of Health (Bundesministerium für Gesundheit -
BMG) is responsible for developing healthcare laws and policies at
federal level. They are also responsible for outlining administrative
guidelines that must be implemented by self-governing bodies.
There are a number of healthcare agencies and institutions that
come under the Federal Ministry of Health, namely the Federal
Institute for Drugs and Medical Devices (Bundesinstitut für
Arzneimittel und Medizinprodukte – BfArM), which is involved in the
approval of pharmaceutical products; and the Paul Ehrlich Institute
(PEI), whose area of responsibility is the approval of vaccines.

5. • The Federal Joint Committee is the highest decision-making body
in the German healthcare system. The committee is made up of
representatives of physicians, dentists, psychotherapists, insurance
providers, hospitals, and patients. The Federal Joint Committee is
responsible for defining which medical services will be covered by
the statutory insurance and under which form will coverage be
provided.
• Quality assurance is another key responsibility of The Federal Joint
Committee, which carries out this task with the support of the
Institute for Quality and Efficiency in Healthcare (Institut für Qualität
und Wirtschaftlichkeit im Gesundheitswesen – IQWiG) and other
institutions.

6. • The German Hospital Federation (Deutsche Krankenhausgesellschaft -
DKG) is a representative body that encompasses the different organisations
responsible for running hospitals, including cities, municipalities, not-for-
profit associations, private sponsors, religious organisations, and others.
• The Public Health Service (Öffentlicher Gesundheitsdienst – ÖGD) is a
federal institution tasked with protecting the general public from health risks
and with promoting good health. This is achieved in collaboration with
regional health departments throughout Germany, which regulate and offer
public health services, as well as counseling and support for individuals with
psychosocial problems.

7. Health Insurance in Germany
Health insurance is mandatory for all German citizens and permanent
residents.
There are two different systems that residents can turn to for insurance:
1. SHI (Statutory Health Insurance)
2. PHI (Private Health Insurance)
• German citizens are eligible for PHI if they make more than $60,000 per
year or are self employed.
• Citizens making under that threshold must pay into SHI.
SHI (Statutory Health Insurance): SHI is made up of a network of competing
not-for-profit private companies called ‘sickness funds’.
In SHI dependents are covered free of charge and monthly costs are
capped around 840€ per month for the highest earners.
Even though SHI sickness funds are not government agencies, many
Germans think of SHI sickness funds as part of a public system because of
a heavy regulation.

8. • The system is funded through compulsory contributions based on a
percentage of citizens salaries with employers sharing the costs. They are
also built in safety nets.
• The government will pay into SHI on behalf of the long term unemployed.
• Despite being non-profit organizations, sickness funds compete for
customers by offering specific coverage and perks.
• This competition has changed over the years as the system has allowed
citizens more choice.
• There used be no co-pays for SHI but some were added in 2004, they were
about 10€ for a doctor’s visit but in 2013 most of those were removed again,
there are still co-pays: €5-10 for prescriptions, €10/day for hospitalizations &
€5-10 for medical aids. Deductibles can vary by plan.
• As of 2019, there are about 100 SHI companies, but there used to be many
more, when Germany’s system was first established in the late 1800s,
sickness funds were linked to a person’s profession. It used to be that
people were assigned to a specific sickness fund based on their occupation
or region. Now, German’s can choose where they enroll and they can
change funds on a yearly basis.

9. • As a result, sickness funds begin marketing themselves in order to retain
customers and attract new ones. This also led to the funds merging so they
could become more competitive. Some of the sickness funds offer perks
that might seem similar to credit card rewards.

10. • As of 2017, roughly 87% of German’s receive their primary coverage through SHI and
11% of the population through PHI. The remaining population such as soldiers, police
officers and refugees receive health insurance through specific government programs.
• All individuals insured through PHI pay a risk related premium with separate
premiums for each dependent. These risk based premiums mean that costs will
increase as the insured gets older. As a result, the government regulates PHI, so
people dont’t become over burdened by premiums as they age.
• Once someone switches to PHI, they cannot switch back to SHI in the future.
• Germans can also buy supplemental private insurance while staying in SHI, for
example, many Germans buy supplemental dental insurance.
• Germany has managed to balance cost controls and universal coverage while also
maintaining competitions.

11. Centralization and decentralization
• Germany has a decentralized healthcare system, which means that responsibility for
healthcare is shared between the federal government and the 16 states (Länder) of
Germany. The federal government is responsible for setting overall health policy and
regulating health insurance, while the states are responsible for implementing and
managing healthcare services.
• Under the German healthcare system, individuals are required to have health
insurance, either through a public insurance scheme or a private insurance scheme.
Public health insurance is provided by nonprofit insurance companies known as
"sickness funds," which are regulated by the government. Private health insurance is
available for those who meet certain criteria, such as high-income earners or self-
employed individuals.
• Overall, the decentralized healthcare system in Germany is designed to promote
competition among providers, encourage innovation, and ensure that healthcare
services are accessible to all. However, the system also faces challenges, such as
rising healthcare costs and an aging population, which require ongoing policy
attention and reform

12. Resources (Health financing, human
resources, hospitals)
• Health financing: Funded primarily through social
health insurance contributions and taxes
• Human resources: 5.5 doctors and 12.9 nurses
per 1,000 population (2019)
• Hospitals: Approximately 1,950 acute care
hospitals, with 500,000 hospital beds (2019)

13. Quality. Choice. Excess.
• Quality: Generally high quality of care, with good
outcomes and patient satisfaction ratings
• Choice: Patients have a choice of doctors and
hospitals within their insurance network, and can
switch insurers annually
• Excess: Out-of-pocket payments are limited, with
a maximum of 2% of income for SHI members
and no limit for PHI members

14. Efficiency (key indicators of health/ Health expenditure) in
comparison with other countries
• Key indicators: Germany has a high life expectancy, low infant mortality rate, and high
vaccination rates
• Health expenditure: Germany spends around 11% of GDP on healthcare (2019),
lower than the US but higher than some other European countries
• Life expectancy: According to the World Health Organization, Germany has a life
expectancy of 81 years, which is higher than the global average of 73 years.
Germany's life expectancy is also higher than many other developed countries, such
as the United States (78 years) and the United Kingdom (80 years).
• Infant mortality rate: The infant mortality rate in Germany is low, at 3.1 deaths per
1,000 live births, which is better than many other developed countries, including the
United States (5.7 deaths per 1,000 live births).
• Healthcare spending per capita: Germany spends around $5,000 per capita on
healthcare, which is lower than some other developed countries, such as the United
States (which spends around $11,000 per capita).
• Efficiency: Germany has a relatively high number of doctors and hospital beds per
capita, which may contribute to higher healthcare costs

15. Strengths and weakness
• Strengths: High quality of care, choice for
patients, comprehensive (Universal)
coverage, efficient & cost-effective and a
strong social health insurance system
• Weaknesses: Long wait times, Staff
shortages, High healthcare costs,
fragmentation of care, and regional
disparities in healthcare access and
outcomes for certain groups

16. Challenges and reforms
• Challenges: An aging population with
increasing chronic diseases, rising
healthcare costs, and shortages of
healthcare workers
• Reforms: Ongoing efforts to improve
healthcare efficiency, address workforce
shortages, and promote prevention and
early intervention and digital health
technologies.

17. Conclusion
• Germany is internationally known as the first country to introduce statutory
health insurance financed by social security contributions, in 1883. Even
today, the “Bismarckian” SHI system is still considered one of the proto-
types of modern health insurance systems. The principle of solidarity and
the extensive self-governmental organization of actors are characteristics of
the German health care system that have remained largely unchanged in
the 137 years since its foundation.
• The German health care system is often regarded as one of the best health
care systems in the world, offering its population universal health insurance
coverage and a comprehensive benefits basket with comparably low cost-
sharing requirements. It provides good access to care with free choice of
provider and short waiting times, which is partly due to good infrastructure
with a dense network of ambulatory care physicians and hospitals, and a
quantitatively high level of service provision.