DR. PETER KNUTH

;

PROF. DR. RUDOLF-H. JUCHEMS

Fig. 1. Degree of coverage of total expenses of statutory health insurance in Germany. Total expenses of statutory health insurance are covered by premiums paid by employees (50%) and employers (50%). In cases of undercoverage, premiums are increased. (Data from Arbeits- und Sozialstatistik, KV 45, Bundesländer West. Basis: Tabelle G8, Spalte 10 zu Spalte 7. Redrawn with permission from Kassenärztliche Bundesvereinigung.3)


Through the so-called Concerted Action, a national forum that brings together the key participants of the health-care sector (representatives of the physicians’ associations, sickness funds, hospitals, and pharmaceutical manufacturers), the federal government sets national guidelines for the annual round of negotiations, at which a consensus is reached for the contribution rate.
The money in the sickness funds is used for the following services (data from 1994):3c (1) hospitalization, 34.3%; (2) ambulatory care, 17.5%; (3) purchase of prescription drugs, 12.8%; (4) dental care and dentures, 9.3%; (5) cash benefits to offset the loss of income during illness, 7.4%; (6) purchase of medical appliances, 7.1%; (7) nursing care, 2.8%; (8) maternity benefits, 2.1%; (9) visits to spas, 2.1%; and (10) miscellaneous (travel money, funeral benefits, benefits while abroad, and social services), 4.6%. The expenditures for various health services as a percentage of a member’s salary are shown in Figure 2.3d
The second characteristic of the German system is the organization under public law of regional associations of physicians. These 19 associations receive the money from the sickness funds, reimburse ambulatory-care physicians, monitor the volume and value of services, and monitor prescriptions and referrals; thus, they have an important role in cost containment.
Patients in Germany are free to select any ambulatory-care physician. Until recently, when patients visited the physician’s office, they submitted a treatment voucher on which the physician noted the services provided. Patients could claim only one treatment voucher per quarter, which was usually given to the general practitioner of their choice. Because no restriction existed for the number of times a voucher could be used, patients visited the same general practitioner as often as they wanted. In 1988, the number of physician contacts per capita was 11.5 in Germany and 5.3 in the United States.4 Until recently, patients had to obtain a referral certificate from a general practitioner to visit a specialist. For patients covered by sickness funds, no money passes between them and their physicians; therefore, patients usually have no idea how much their treatment costs.
In 1995, Germany began to issue chip cards (smart cards) to all its citizens to replace the traditional treatment voucher. The introduction of these chip cards (originally planned to simplify paperwork) has made it possible for patients to visit as many physicians as they want, including specialists, without a referral. Patients can now visit different specialists for the same problem; this change has resulted in duplication of tests and has led to a tremendous loss of resources. As a consequence, the introduction of a “hybrid card” is being considered. This card combines a microchip with an optical memory. With its high-memory capacity, this card should be ideal for collecting all relevant medical data on a patient. The hybrid card would be advantageous to both patient and physician. It should lead to better patient care because the entire history of a patient and the results of tests performed by colleagues are available immediately to the treating physician. The use of such a card should result in cost reduction because of avoidance of duplication of tests and treatment plans. Legal, ethical, and security issues are being evaluated. This card will represent a “personal archive.” It will be secured, and only authorized personnel will have access to it.


<A id=7211c-fig2>


Tourists visiting Germany are not entitled to the benefits of German health insurance and must make their own arrangements for medical care. Immigrants and persons seeking asylum receive basic health care according to the asylum application benefit law. As soon as these people are employed, they receive the same insurance coverage as German citizens. Chronically ill patients receive all benefits of the statutory health insurance as long as these are appropriate and economically feasible and do not exceed standard necessity. In the event of unemployment, special provisions are made for uninterrupted payments. Depending on the duration of unemployment, branches of the social security system (such as the old-age fund, unemployment fund, disability insurance, or the federal or regional government) are responsible for the payments to the sickness fund.
To receive reimbursement, the generalist and specialists who provide ambulatory care must submit a list of all treatments that they have rendered during a quarter to their regional association. At the federal level, the Federal Association of Physicians and the Federal Association of Sickness Funds negotiate a fee schedule for the services provided by physicians. These fee schedules are relative value scales, expressed in points per service provided. For example, a telephone conversation with a patient may be worth 80 points; a home visit, 360 points; and a radiology test, up to 900 points.
To translate the point value into German marks, the following formula is used: point value=budget/points billed by all physicians.
The physician bills points to his regional association of physicians and is reimbursed in currency. This reimbursement scheme has led to a decrease in the relative income of German physicians. The number of physicians has steadily increased and thus has contributed to this dilemma.
Traditionally, hospitals have been reimbursed on the basis of per diem rates. This system has led to excessive, lengthy durations of hospitalization and large cross-subsidization among specialties. A cost-per-case payment is now being implemented (a type of diagnosis-related group system). Hospital-based physicians are paid a fixed salary by the hospital and at a level based on specialty and seniority. Money for their salaries is obtained from the per diem operating cost that the hospitals negotiate every year with the sickness fund. Although hospitals receive their operating money from the sickness funds, their capital for building and investment is primarily from contributions from the state and some local governments.
The German health-care system, which has been in existence for more than a century, has had several cost-containment acts. Since 1977, the government has introduced 46 major laws with 6,800 detailed regulations to moderate the growth of spending and to avoid increases in contribution rates; some temporary success has resulted.5 To moderate the growth of spending for prescription drugs, the Reference Price System on Pharmaceutical Products was introduced in 1989. A committee of physicians and managers of sickness funds set reference prices for commonly used drugs, usually at the price level of generic products. As a consequence, all pharmaceutical companies reduced the prices of their brand name products to the level of generic equivalents, rather than risk the loss of their market share. Other cost-containment acts include a copayment by the patient for spa treatment, dentures, and medical devices.
The 1993 Health Care Reform Act mandated that the growth in physician expenditures be capped at the growth in income of members of the sickness funds. This reform further limited growth in pharmaceutical expenditures and restricted the licensing of new ambulatory-care physicians in regions that have more than 110% of physician capacity, as defined by the regional associations of physicians and the sickness funds and which varies for different areas within Germany.
Provisions for home nursing care and nursing-home care were made in April 1995. Since Jan. 1, 1995, an additional 1% of a person’s salary—divided evenly between employee and employer—must be contributed to the sickness fund for these benefits. This percentage will be increased over the years. In addition, the population loses one paid holiday per year to pay for home nursing care and nursing-home care.

SATISFACTION WITH THE SYSTEM

Patients.—Germans, in general, are satisfied with the health-care provision in their country. In a 1990 survey,6 in only 4 of 10 countries—Canada, the Netherlands, West Germany, and France—did more than 40% of the population report relative satisfaction with their current health-care arrangement. The satisfaction rate was lowest in the United States, which has the highest level of spending per person. The rates of satisfaction with the health-care system of populations in different countries relative to health-care expenditures in 1989 and 1990 are shown in Figure 3. No reports exist of waiting periods for any diagnostic or therapeutic procedures, and such waiting periods have never been an issue with patient satisfaction. Likewise, malpractice claims that result in major legal trials are infrequent. All claims are reviewed by a board appointed by the health-care system.
Physicians.—In a telephone survey performed from February through May 1991 involving 602 physicians from the United States, 507 physicians from Canada, and 519 physicians from West Germany, 23% of the US physicians, 33% of the Canadian physicians, and 48% of the West German physicians said their respective health-care systems were considered to be working well. Patients’ inability to afford necessary treatment was considered a serious problem by 73% of the US physicians, 25% of the Canadian physicians, and 15% of the West German physicians.8 In a recent survey among various European countries, the satisfaction of German primary-care physicians was relatively low in comparison with that of Scandinavian physicians. The German physicians were dissatisfied because of excessive administrative work and a large workload.9 German office-based physicians have an increasing concern about a continuous decline in income, which is mainly due to a steadily increasing number of physicians in Germany. On Dec. 31, 1994, the total number of physicians in Germany was 326,800. The number of practicing physicians was 267,200 (94,057 women): 109,400 were office-based, 129,100 were hospital-based, and 28,700 were in various areas.3e,f In comparison, the total number of physicians in the United States on Jan. 1, 1994, was 684,414, and 619,751 (124,885 women) were practicing physician.10 In 1990, the population per physician was 323 in Germany and 435 in the United States.11 The large number of physicians in Germany is partially due to the constitutional right of all qualified students to a state-subsidized medical education. As a result, Germany cannot legally decrease the number of medical students. The large number of physicians has had and will continue to have serious implications for physicians’ incomes because the amount of money contributed to the sickness funds must be split among the physicians who are members of a regional association of physicians. This problem has led to a restriction of the number of physicians practicing under the statutory sickness fund system in certain areas of Germany as of October 1993. In 1994, 6,906 physicians (3,053 men and 3,853 women) were unemployed in Germany. Frequently, however, the period of unemployment was less than 3 months.3g Revenues and income of general practitioners and specialists are depicted in Figure 4.3h


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STRENGTHS

No reliable and widely accepted measure exists to evaluate the performance of a healthcare system in any country. In general, however, Germany has met the four objectives that any health-care system should strive for: (1) universal access, (2) high-quality care, (3) ability of patients to choose their physicians, and (4) socially acceptable cost.


<A id=7211c-fig4>


Measures that can be used to assess the performance of health-care systems include (1) the health-care expenditure as a percentage of the gross domestic product and (2) infant and maternal mortality rates and life expectancy of the population.
Expenditure and the Gross Domestic Product.—In 1970, the percentage of the gross domestic product spent on health care was 7.4% in the United States and 5.9% in Germany. By 1990, the percentage of the gross domestic product devoted to health care had almost doubled in the United States to 12.1%, whereas in Germany the percentage had increased only to 8.1%.12 In 1993, the United States spent 14.1% of its gross domestic product on health care, and Germany spent 8.6%. In the year 2000, the projected percentage for Germany is 11%, whereas it is 15% for the United States (Fig. 5). The relatively low level of health expenditures in Germany is even more remarkable because the population in Germany is much older than that in the United States: 15.5% of the German population is age 65 years or older, whereas 12.2% of the US population is in that age-group.12 In fact, the US population will not attain the current age structure in Germany until the year 2020.13
Mortality Rates and Life Expectancy.—In 1990, the infant mortality rate per 1,000 live births was 7.1 in Germany and 9.1 in the United States.14 That same year, the perinatal mortality rate per 1,000 births was 6.0 for Germany and 9.6 for the United States.11 In 1988, the maternal mortality rate per 100,000 live births was 8.0 in Germany and 13.0 in the United States.11 The life expectancy at birth in 1989 was 72.6 years for men and 79.0 years for women in Germany, and in 1990 it was 72.0 years for men and 78.8 years for women in the United States.11
The durability of the German health-care system is a testament to its many strengths. This system has achieved high and equitable standards of health care while preserving patient choice and provider autonomy. It has had striking success in reducing perinatal mortality. By stabilizing the share of the gross domestic product spent on health care, it has achieved satisfactory cost containment. In an international survey of satisfaction with systems of health care, the German health-care system received high ratings.

PROBLEMS

The problem facing the German health-care system is potential financial collapse. The reasons for this are as follows: (1) a change in the age structure of the population that involves a shift to an increasingly elderly population requiring more medical care without commensurate financial contributions; (2) an increase in nonwage labor cost being part of the social benefits leading to an extremely high work cost, which has resulted in Germany not being competitive within and outside Europe in many areas; (3) a persistently high unemployment rate leading to insufficient contributions to the sickness fund; (4) the financial burdens caused by integration of former East Germany; (5) the relative lack of outpatient surgical procedures (although these are becoming more frequent), duplication of tests because of demarcation between office-based and hospital-based physicians (although this is diminishing), and extensive durations of hospitalization due to per diem reimbursement (a cost-per-case payment, similar to a diagnosis-related group system, is being implemented); and (6) the lack of self-responsibility of the German citizens, who have been pampered by probably the most generous guaranteed health-care package in the world, and their difficulty in giving up benefits that they have enjoyed for years.


<A id=7211c-fig5>



FUTURE DIRECTIONS

Germany seems to have a growing recognition that a reform program leading to an overhaul of the financing structure of the health-care system is necessary. Interference by the government to control cost and contribution rates is apparently of only temporary benefit. The goal of any further reform in the structure of the German statutory health insurance is to create a system that regulates itself and brings medical progress, national economics, and acceptable individual contribution rates in accordance with one another. In January 1996, the Bundestag (Congress) proposed a preliminary draft as the third step of the German health-care reform (the first step was in 1989, and the second step was in 1993). Although this was not approved in its current form by the Bundesrat (Senate), the essential parts are expected to pass. The important points of this preliminary draft are as follows:5

1. <LI class=article-text>All further developments in reform of the German health-care system will be based on historical principles and on those previously documented as useful. (a) Solidarity, self-responsibility, and subsidiarity are and will remain the essential structures of the German health-care system. (b) Social equality will remain between young and old, healthy and sick, poor and rich, and single and married. (c) The health-care system will remain pluralistic, stimulating competition between sickness funds. (d) Medical progress must be financed and made available for the entire population.
   
   
   <LI class=article-text>Self-government will be promoted while stable contribution rates are maintained. (a) The principle of subsidiarity implies that self-administration always has priority over government involvement, as long as the involved parties are able to manage the affairs of the statutory health insurance. Because individual persons are now able to join the sickness fund of their choice (rather than by profession or location), the risk structures of the different sickness funds are balanced, and each sickness fund is involved in self-responsible competition. Work must be done to increase the range of self-government, and mechanisms for conflict management must be developed. (b) Self administration and self-government must go hand-in-hand with an increase in financial responsibility. Therefore, the requirements for an increase in the contribution rates will be tightened, and the available funds will be used more responsibly and economically. Increases in contribution rates will be limited to realization of medical progress.
   
   
   <LI class=article-text>Autonomy will be increased by liberalization of contracts between sickness funds and physicians as well as between sickness funds and clients, whereby the principle of solidarity must be maintained. The sickness funds will be encouraged to develop innovational models.
   
   
   <LI class=article-text>The sickness funds will bear the responsibility for maintaining stable contribution rates. As a means to ensure stable contribution rates and to avoid further burdens for employers, increases in contribution rates for administrative developments will be avoided. Increases in contribution rates will be possible only if they are important for medical care and development.
2. Self-responsibility of the insured population will be promoted. (a) The interest of the members enrolled in the statutory sickness fund will be enhanced by availability of the financial aspect of the statutory health insurance. Beginning in 1999, patients enrolled in the statutory health insurance will be able to request information regarding the cost of services received. (b) Partial reimbursement of the paid premium, which has been a feature of private insurance, will be available in the future for participants in the statutory health insurance. In a preliminary survey of 1,917 insured persons, 71% thought that a partial reimbursement of the premium was reasonable if no or only minimal service had been received during a calendar year.7 Because a partial reimbursement of the premium cannot be obtained equally by all persons insured (a reimbursement is more likely for young healthy people than for elderly and chronically ill people), this change seems to be an interference in the financing structure of the statutory health system, which is based on the principle of solidarity. (c) Copayments are being considered for inpatient preventive-care services and rehabilitation spas. At regular intervals, these copayments will be adjusted. Beginning in July 1997, the copayments will be adjusted at 2-year intervals, according to the financial experiences of the 2 previous years.
   Thus far, a Europe-wide health-care system does not exist. The European Community could, however, facilitate the adoption of such a plan by (1) issuing recommendations and directives to achieve harmony of the basic packages of treatments available in Europe, (2) enforcing mandatory health insurance schemes by ensuring that existing members of the European Community maintain a mandatory health insurance scheme and that new members create one as a precondition to membership in the community, and (3) allowing insurance funds to operate across borders.

SUMMARY

The German health-care system is characterized by a statutory health insurance based on the principle of social solidarity. Nonprofit sickness funds and regional associations of physicians are the central components of the German system. The historical development of the system for more than 100 years has been characterized by negotiations, rather than confrontation, among physicians, patients, and insurance carriers. With the increasing sophistication of modem medicine, medical expenditure is rising, and great demands are facing the health-care systems of the industrialized world. The hope is that the German system will be able to preserve the principle of solidarity and remain a one-tier healthcare system rather than allow health care to be viewed as essentially a private consumption good, in which case availability and quality are allowed to vary with family income. As a means to achieve this goal, the autonomy of the sickness funds and regional associations of physicians will be increased substantially, and the governmental authority will be decreased. Strengthening of autonomy must be accompanied by incentives for self-responsibility and self-participation of Germany’s citizens.
REFERENCES

1. <LI class=references> Financing Health Care With Particular Reference to Medicines. Vol 1: Summary and Overview. London: National Economic Research Associates; 1993 Apr. pp 6-7
   
   <LI class=references> O’Leary Morgan K, Morgan S, Quitno N, editors. Health Care State Rankings 1996: Health Care in the 50 United States. 4th ed. Lawrence (KS): Morgan Quinto Press; 1996. p 230
   
   <LI class=references> Kassenärztliche Bundesvereinigung. Grunddaten zur kassenärztlichen Versorgung in der Bundesrepublik Deutschland 1995. (a) Table G 5; (b) Figure G 17; (c) Figure G 3; (d) Figure G 6; (e) Figure A 1; (f) Figure A 4; (g) Figure H 3; (h) Figure D 2
   
   <LI class=references>Schieber GJ, Poullier J-P, Greenwald LM. Health care systems in twenty-four countries. Health Aff (Millwood) 1991 Fall;10:22-38
   
   <LI class=references> Entwurf eines GKV-Weiterentwicklungsgesetzes-GKVWG-Bundestagsdrucksache 13/3608, Deutscher Bundestag, 13. Wahlperiode; 1996 Jan 30
   
   <LI class=references>Blendon RJ, Leitman R, Morrison I, Donelan K. Satisfaction with health systems in ten nations. Health Aff (Millwood) 1990 Summer;9:185-192
   
   <LI class=references> Sachverständigenrat für die Konzertierte Aktion im Gesundheitswesen. Sachstandsbericht 1994. Gesundheitsversorgung und Krankenversicherung 2000. Eigenverantwortung, Subsidiarität und Solidarität bei sich ändernden Rahmenbedingungen; Baden-Baden (Germany): Nomos Verlagsgesellschaft; 1994
   
   <LI class=references>Blendon RJ, Donelan K, Leitman R, Epstein A, Cantor JC, Cohen AB, et al. Physicians’ perspectives on caring for patients in the United States, Canada, and West Germany. N Engl J Med 1993;328:1011-1016
   
   <LI class=references>Weber I. Hohe quantitative Arbeitsbelastung deutscher Allgemeinärzte. Deutsches Ärzteblatt 1996;93:C268-C270
   
   <LI class=references>Randolph L, Seidman B, Pasko T. Physician Characteristics and Distribution in the U.S. 1995-1996 ed. Chicago: American Medical Association
   
   <LI class=references>Nair C, Karim R. An overview of health care systems: Canada and selected OECD countries. Health Rep 1993;5:259-279
   
   <LI class=references>Schieber GJ, Poullier J-P, Greenwald LM. U.S. health expenditure performance: an international comparison and data update. Health Care Financing Rev 1992 Summer;13:1-87
   
   <LI class=references>Reinhardt UE. Germany’s health care system: it’s not the American way. Health Aff (Millwood) 1994 Fall;13:22-24
2. Schieber GJ, Poullier J-P, Greenwald LM. Health spending, delivery, and outcomes in OECD countries. Health Aff (Millwood) 1993 Summer;12:120-129

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Originally Posted by docKLC . As a result, there's really no major canadian pharm company that isn't making generics. And as a result of that, long-term patient care is crippled because the therapeutic advances just cant be commercialized to bring them to the patient