1. The German Healthcare System and Some Thoughts About the EU Lecture 8 Tracey Lynn Koehlmoos, PhD, MHA HSCI 609 Comparative International Health Systems

2. Germany Official name: Federal Republic of Germany Population: 82.4 million Capital: Berlin Government: Federal Republic Divisions: 16 states (Länder) Largest country in Europe

3. 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

4. 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

5. 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)

6. 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)

7. 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)

8. Organization 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

9. 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

10. 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

11. 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%

12. 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.

13. 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

14. 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

15. 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

16. 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

17. Hospitals 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

18. 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

19. Compared to US Germany has 2 nd 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.

20. 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

21. More EU and healthcare In 2000, health care accounted for 27.3% of all social protection expenditures in the EU-15 (2 nd 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.

22. 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.

23. 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?