By Martin von Bergh
1. Introduction
The German Health Care System targets an extensive health care coverage for all German residents. The German Basic Constitutional Law (Grundgesetz) declares in Article 2 that every German resident has the right to physical soundness. Furthermore, Article 3 states that no-one should be susceptible to disadvantages caused by a handicap. This is guarantied by another law that forces all German residents to be health insured. Ninety-nine percent of German residents are covered by health insurance. Out of this, 90% are members of the Statutory Health Insurance (Gesetzliche Krankenkassen, GKK). After a solidary principle, those members of the GKK earning money cover family members without income. This guarantees medical treatment for everyone on a high quality standard whenever needed; regardless of age, sex or income.
2. Organization, Management and Financing of German Health Care
2.1 Government
The German Health Care System functions in a framework of laws made by the government. Health Politics attempt to promote good health and prevent diseases. At the same time, the government strives to keep German Health Care cost-efficient. This is done by the Ministry of Health and Social Security (Bundesministerium für Gesundheit und Soziale Sicherung, BMGS). There are different independent institutions working under the control of the BMGS, for example, institutions for health awareness (Bundeszentrale für Gesundheitliche Aufklärung) or the Institute for Disease Control (Robert-Koch-Institut für Infektionskrankheiten und nicht übertragbare Krankheiten). On a state and county level, government laws are enforced and health service providers are regulated. Local public health departments (Gesundheitsamt) provide public health service. For example,they attempt to prevent and control infectious diseases or supervise health programs in schools.
2.2 Common Health Board
The Common Health Board (Gemeinsamer Bundesausschuss, GBA) is a body for self-administration in the health sector. Physicians and hospital administrators work together with representatives of the GKK’s to negotiate the spectrum of health insurance coverage, the standard for treatment quality and to define the practical realization of government laws. The GBA, founded in January 2004, in order to reduce bureaucracy, replaced four separate medical boards. Also new in this board are patient representatives who can influence decisions with their advice. The GBA receives sound professional advice from an independent institution for quality and efficiency (Institut für Qualität und Wirtschaftlichkeit).
2.3 Health Insurance
Statutory Health Insurance (national health insurance) The guiding principles of German national health insurance are solidarity, decentralization, and non-state operations.
Statutory Health Insurance provides full coverage of all necessary treatments in case of illness regardless of sex, age or financial status. In 2003, 50 million statutory insured residents of 70 million statutory insured residents contributed €137.5 billion in revenue. This money is expended on a solidary principle; that employers and employees cover health costs for family members without income (for example, children and pensioners).
Every employee with an income exceeding €400 a month is obligated to sign up with one of 288 statutory health insurance companies (1.1.2004). Up to a gross income of €3487.50 per month, a certain percentage of the income has to be paid. The percentages vary with different insurance providers. The payment is shared 50/50 between employers and employees. Even if the salary surpasses this monthly income, the fee is calculated at this maximum level in order to prevent outrageous payments.
The GKK’s negotiate treatment prices with hospitals, physicians representatives, pharmacies, rehabilitation institutions and other health care bodies. After the service is delivered the GKK’s pay the providers.
Private Insurance
One is allowed to either be not insured at all, or to sign up with a private insurance company with a monthly gross income of €3862.50 or higher.
Prices for private patients’ treatment are not negotiated with the insurance company and therefore in most cases are higher. The patient himself must cover the bills and afterwards the private insurance company reimburses the client.
The monthly fee is calculated according to the personal health risk of each customer in order to cover the expected medical expenditures that will occur in their life span. For instance, an older man would have to pay more than a younger man when signing the contract. Women are more expensive than men, and already existing disabilities can increase the fees as well. A person with a chronicle disease will most likely be rejected when trying to sign up with private insurance companies. This is because private insurance companies are privately owned and try to make profit.
2.4 Physicians Association of Statutory Health Insurance
The Physicians Association of Statutory Health Insurance (Kassenärztliche Vereinigung - KV) and the Dentists Association of Compulsory Health Insurance (Kassenzahnärztliche Vereinigung - KZV) guaranties a high standard of quality for the primary health sector inline with demand for every region of Germany. Every physician who wants to treat statutory insured patients ambulatory, is obligated to be an accredited member of the KV/KZV.
The membership to one of the 23 KV or 22 KZV associations depend on the region of practice of the physician.
The KV/KZV work as the middleman by negotiating the budget with the GKK for ambulatory physicians and dentists of that region. This budget refers to the individual services that are being distributed among all physicians or dentists.
2.5 Physicians Board
The Physicians Board (Ärztekammer, AK) represents an organization that defends the physicians political interests and supervises their continual education. Membership is mandatory for all physicians and dentists working in the ambulantory sector or in hospitals.
Its’ organization is divided into regional, state and national boards.
Both KV and AK are public institutions (Körperschaften des öffentlichen Rechts) controlled by a governmental supervising authority.
2.6 Physicians
Physicians of Statutory Health Insurance (Kassenärzte, KA) such as General Practitioners (GP), outpatient specialists and dentists provide primary medical service for outpatients country-wide.
In this primary sector, the General Practitioners have an exceptional position as gatekeepers for the treatment of patients.
A big advantage for German patients is their right to choose their own physician.
The General Practitioners, being the first point of contact for most patients, treat minor diseases, refer patients in cases of necessity to specialists, hospitals, or rehabilitation providers and also supervise the overall treatment of their patients.
GP’s induce 70% of all expenditures of the GKK, whereas the expenditures of the primary health sector itself treat over 80% of all patients and are less than 25% of the overall health budget.
Primary Health Care 2003:
General Practitioners: 59,000
Ambulatory Specialists: 58,000
Dentists: 80,000
Expenses of the GKK:
Physicians: €24.3 Billion
Dentists: €11.8 Billion
KA encode their medical services when seeing a patient. Every diagnostic and treatment has a certain number of “points”.
The total amount of points after a four month period is refunded by the KV. How much a point is worth is calculated after all KA’s in a region have sent in their settlements. The budget that GKK pays to the KV is distributed into the overall point volume of one region. This means the more points all physicians encode, the less one point is worth since the budget does not change.
That’s why KA are limited in the amount of treatments they encode per quarter of a year.
2.7 Hospitals
In Germany 2,240 hospitals with 553,000 beds guarantee the stationary treatment of patients. The hospitals are divided into four categories and range from small regional clinics with less than three specializations, up to hospitals with maximum coverage, such as university hospitals. The GKK’s total expenses in 2003 equaled €46.8 billion.
Hospitals are run by different kinds of organizations such as public holders (university hospitals), non-profit public organizations (DRK, welfare) or private (profit) companies.
The overall supervising institution is called the German Hospital Assosiation (Deutsche Krankenhausgesellschaft DKG). Its members are representatives of the hospital operating organizations. The DKG is a body of self-administration in the health care system.
The hospital refund system went through various stages in the last decade.
Since 1972 hospitals were paid according to the number of days a patient occupied a bed, regardless the effort of treatment. This caused a delayed discharge of many patients, an expansion of beds in hospitals and a tremendous increase of expenditures for the health care system.
The 1992 Health Care Structure Act introduced new mechanisms to improve cost efficiency in the hospital sector.
In 1996 the government invented diagnosis related payments for a quarter of all treatments, regardless the length of stay.
In 2003 a new financing and renumeration system based on the Diagnosis Related Groups (DRG) was introduced. Refunds are now almost completely based on the patient’s main diagnosis.
3. Recent Health Sector Reforms
With the beginning of 2004, the biggest reform in the German health care system of the last decades has taken place. This has been a part of a reformatory package called the “Agenda 2010”.
The law to modernize the Health System (Gesundheitssystem-Modernisierungsgesetz 2004)
Changes for statutory health insured patients:
Doctors’ visits and hospital stays
The first time in each quarter of a year that a statutory health insured patient sees their GP they have to pay a €10 fee to the physician, charged by the patients’ insurance company.
If the patient sees another physician without a referral from his GP another €10 fee will occur.
The same fee has to be paid at the dentist. Children under 19 years old, and some other exceptions, are free of payment.
In case of a hospital stay, a charge of €10 per day will appear up to a maximum of 28 days per year.
Cutting Services
Money is no longer being paid to mothers delivering babies, or in cases of death. Visual aids and tooth replacements are only covered in exceptional cases and the transportation to and from doctors’ visits or hospitals is no longer covered.
Shared Payments
For medications and medical supplies the patient is required to pay a 10% share of the total price, a minimum of at least five Euros, and a maximum of ten. For ambulatory nursing and medical aids (for example, a wheel chair) statutorily insured patients have to pay 10% of the total cost as well.
3.2 Hospital Reforms
DRG
Diagnosis Related Groups were developed at Yale University, New Haven USA, by Professor Fetter in 1975. Meanwhile, a whole lot of different systems are used around the world.
A German DRG-system has not yet existed.
The German health-administration passed a law on reforming the health-system (Gesundheitsreformgesetz 2000). Following that, the medical self-administration introduced an internationally established DRG-system in Germany.
The Australian DRG-system was chosen by the self-administration as a basis for the new system.
In contrast to other countries Germany uses DRG’s to reimburse on a per case payment basis and not for overall budget calculations. This requires a high level of reliability.
The German DRG-system was developed on the basis of German data. For this purpose, all physician-coded patient-data from one year were needed as well as detailed calculations on costs to compare DRG’s with actual costs. The number of groups are limited to 804.
Special coding standards for each specialty are published and are applied by the physicians. Variation coding practice will decrease and the quality of coding will slowly increase over the years.
Integrated Care
For the longest time ambulatory and hospital treatments were strictly separated. In combination with a lack of communication, unnecessary diagnostics and counteracting treatments took place. The Health Reform 2004 continued earlier attempts to close the gap of a fragmented system. On the one-side hospitals are now allowed to offer ambulatory services, on the other side a concept called "integrated care" was introduced: local clinics and ambulatory physicians work together to build a network of communication and work share.
Work Time Law
A new law (Arbeitszeitgesetz für Krankenhausärzte 1.1.2004) regulates the time physicians in hospitals are allowed to work. Shifts of over 30 hours and around 85 working hours per week were common for residents in Germany. The new ruling only allows 48 hours per week. However, if the employee agrees, an extension up to 60 hours per week is permitted and shifts would be no longer than 8 hours.
4. Main Problems of the German Health Care System
The system is too expensive
The major problem of the German health care system is the fact that it is too expensive! After the US and Switzerland, Germany has the third most expensive system in the world.
In Table 1 the rising costs for health care can be seen as well as the increased insurance fees.
High quality treatment for every resident in a health market with low competition where almost everything is free for the patient causes tremendous medical coverage costs.
German population grows older
Medical progress offers new possibilities of treatment. This is one reason why people grow older. In the last 40 years the average life expectancy has increased 8 years. At the same time the birth rate is declining.
Table 2 shows the age pyramid in the year 2000 (blue) and the one German specialists expect in 35 years (orange):
The older population suffer more from diseases, and therefore causes higher expenditures for the health care system. At the same time they pay less fees to the GKK.
Less payments- less quality
Germany is currently facing an economical low-point with high numbers of unemployed people. Less payments are contributed into the solidary insurance system. As a result, the coverage areas offered by the GKK's are diminishing and the fees are rising. Newer diagnostics and treatments that are already the standard in other countries are no longer being covered by insurance companies and because of this, they aren’t arranged for by doctors. The high level of quality once represented by Germany is diminishing.
Germany is lacking physicians
The new work time law for physicians working in hospitals tried to create fair working conditions for doctors. At the same time, severe problems arise from the fact that hospitals have to employ more physicians in order to guarantee the same service. Furthermore, Germany is lacking over 40,000 physicians and most hospitals’ strained financial situations do not allow further expenses.
Another problem is a reduced salary for the physicians because of less working hours. In comparison to other European countries, resident doctors in Germany already make less money, now reducing the salary might cause a shift of German doctors into neighbour countries or non-medical professions.
Death of Hospitals
New laws and the reimbursement system are deteriorating an already tense hospital financial system. As a result many hospitals, especially those smaller ones, will go under sooner or later. This disintegrates the now existing area-wide hospital network.
Lack of Motivation
A better enforcement of preventative actions could reduce future expenses for numerous diseases. The number of people taking advantage of preventive programs is constantly low. At the same time, health behaviors worsen with increasing consumation of tobacco, alcohol, fast food and drugs.
5. Conclusion
For now German residents can feel secure in their health care system. In the future politicians as well as doctors, patients as well as service providers have to work together to help keep it one of the highest quality medical markets in the world.
6. Abreviations
7. Reference List
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http://www.bmgs.bund.de
http://www.die-gesundheitsreform.de
http://drg.uni-muenster.de/index_au.html