Purchasing Care
As in the United States, nongovernmental insurance forms the basis of the German health care system. But whereas U.S. insurance providers must compete to survive in a profit-driven mar- ket, in Germany around 90% of health insurance is provided by nonprofit social insurance groups known as sickness funds. For employed individuals, the cost of belonging to a sickness fund is around 15% of income. Approximately half of that cost is paid by the individual for his or her entire family and the remainder is paid by the employer. Because costs are based on income, the system, like Britain’s, is financially progressive.
Although all Germans are required to have health insurance, those who earn over a set threshold have the option of purchasing private health insurance instead of or in addition to sickness fund insurance. Around 10% of Germans now take this option.
Paying Doctors and Hospitals German doctors are paid differently depending on the nature and location of their work. Those who work in hospitals or for other organizations receive annual salaries, whereas those in private practice are paid on a fee-for-service basis. However, increasingly insurers are “bundling” payments, offering a set fee for doctors and other providers, both in and out of hospitals, who together care for patients with a specific condition such as diabetes or a hip joint that needs replacing. The hope is that integrating care across various providers will result in better health and lower costs—although there is concern that this struc- ture may instead lead to inefficient caregiving. Hospitals receive their operating budgets from the sickness funds and receive their capital budgets (for items such as new magnetic resonance imaging machines) from the government.
Access to Care All Germans are required to have health insurance, and all German health insurance programs are required to provide a comprehensive pack- age of health care benefits. With the exception of minimal copayments, insurance covers all costs of dental care, maternity care, hospitalization, outpatient care, pre- scription drugs, and preventive measures such as vaccinations. As a result, Germans have few incentives to put off obtaining needed care and see doctors an average of 10 times per person per year, more than twice as often as do U.S. citizens. Germans can see any doctors they like. However, they must first get referrals from their primary care doctors, except for emergency, gynecological, pediatric, dental, or eye care.