1. The Health Care System in Germany – a Dinosaur in Perpetual Change Dominik Naumann – presentation made by Eckhard Metze Confederation of German Employer Organisations (BDA) Social protection

2. Dominik Naumann | The Health Care System in Germany | December 6th 20132 How people in Germany are insured

3. Compulsory vs. private health insurance system  Compulsory  Income-dependent contributions (rich  poor)  Benefits as needed (healthy  sick) „Solidarity principle“  Private  Contributions based on individual contracts  Benefits as contracted „Equivalence principle“ Dominik Naumann | The Health Care System in Germany | December 6th 20133

4. Background – Bismarck´s social security laws  1883 Statutory health insurance  1884 Statutory accident insurance  1889 Statutory pension insurance scheme  1927 Imperial Institute for Labour Exchange and Unemployment Insurance  1995Statutory long term care insurance Dominik Naumann | The Health Care System in Germany | December 6th 20134

5. Financing public health insurance EmployersEmployees50 % + 0,9 % of their income  Contribution assessment ceiling at 47 250 €.  Employees with annual income above 52 200 € and self-employed people have the choice between public and private insurance.  For others, public health is statutory. But they can have additional private insurance, e.g. for dental prothesis.  Not employed spouses and children up to 18 years of age or in education pay no extra contributions. Dominik Naumann | The Health Care System in Germany | December 6th 20135

6. The principle of self-government  Statutory Health Insurance Funds are public-law corporations.  Representatives of employers and insurants make all decisions of fundamental significance.  They represent the interests of members independent from state influence. Dominik Naumann | The Health Care System in Germany | December 6th 20136

7. Institutions of the German health system Federal Ministry of Health: provides legal basis, e.g. budgeting, financial equalization among funds. 7 National Association of Statutory Health Insurance (SHI) Funds Federal Associations of SHI-Funds Insured persons pay contributions Physician SHI-Funds treatments Federal Association of SHI-physicians Associations of SHI-physicians 17 Regions bargaining payments Federal Joint Committee Establishes guidelines, approves new methods

8. Workplace health promotion  Occupational safety: Law  Worklplace health promotion: Voluntary Most common are…  canteen food,  back therapy training and  relaxation techniques. Big firms have more capabilities than small and medium firms. Expenditures for health protection and prevention in 2011: 11,1 bn. € 42 % firms 36 % private households 21 % state Dominik Naumann | The Health Care System in Germany | December 6th 20138

9. Achievements of the firms  Sickness absence rate very low: 3,6 % in 2012 (5,9 % in 1970)  Occupational accidents decreased by 43 % from 1995 to 2012  Occupational invalidity decreased by 39 % from 1995 to 2012 But: Return on investment for prevention is difficult to calculate. Dominik Naumann | The Health Care System in Germany | December 6th 20139

10. Politics: Redistribution in the public health insurance  Rich subsidize the poorTaxation?  Healthy support the sick  Young pay for the oldIntergenerational justice?  Singles subsidize familiesDiscrimination?  Contribution rates are related to the wages, so  rising wages lead to increasing non-wage costs for the employer and  rising contribution rates also lead to higher non-wage labor costs.  Finances of the public health insurance depend on employment, both positive and negative. Dominik Naumann | The Health Care System in Germany | December 6th 201310 ¬

11. Taxing Wages, OECD 2013  A single without children with average income (44 811 € p.a.): total tax wedge including employer´s social security contributions 49,7 % Dominik Naumann | The Health Care System in Germany | December 6th 201311 2/31/3 Social insurance contributions Tax

12. Development of public health contributions Dominik Naumann | The Health Care System in Germany | December 6th 201312 First of January each year Source: Federal Ministry of Health, 2013.

13. 13 Figure 1.1. Income tax plus employee and employer contributions less cash benefits, 2012 As a % of labor costs, by family-type 1

14. Political discussion – after the reform is before the reform  Finance Private and public insurers on one market – almost unique. More or less redistribution? Is it sustainable to keep contributions depending on wages? Do short-time surpluses due to low unemployment provoke new permanent expenditures?  Expenditures Are solidarity and personal responsibility in balance? Which needs are really basic needs? How can competition be implemented to improve quality and reduce costs? How can we ensure efficient medical treatment in rural areas? Hospitals: Too many? Drugs: Too expensive? Dominik Naumann | The Health Care System in Germany | December 6th 201314

15. Dominik Naumann | The Health Care System in Germany | December 6th 201315 Thanks for your attention

16. BDA | Bundesvereinigung der Deutschen Arbeitgeberverbände Mitglied von BUSINESSEUROPE Hausadresse: Breite Straße 29 | 10178 Berlin Briefadresse: 11054 Berlin T +49 30 2033-0 F +49 30 2033-2105 bda@arbeitgeber.de www.arbeitgeber.de