germany healthcare system

Germany’s healthcare system evolved from the

Bismarck Model (1883 Health Insurance Act) to the current multi-payer system (first social security in the world)

The national health insurance act laid the foundation for modern healthcare by mandating

employer/employee contributions

Bismarck Model

• First social health insurance system 

• Established by Otto von Bismark in Germany, the 1883 Health insurance act was the world's first system of social health insurance

bismarck model financed through

• payroll contributions form both employers and employees 

• Employers paid ⅓ of the contributions, while workers paid the remaining ⅔ (has shifted overtime to be the opposite) 

Pre-WWII

Sickness funds were compulsory for certain workers, evolving over time to include almost all citizens

Post WWII

Germany was divided into east (centralized healthcare) and west (multi-payer), eventually reunified with reforms in the 1990s

2007 Health Reform

Focused on cost containment, individual financial responsibility, and improving costs

Current healthcare system structure 

near-universal coverage through statutory health insurance (SHI) ensures equity through a two tier system exists between SHI and private health insurance (PHI)

A multi-payer system consisting of

SHI

90% of populaiton

PHI

10% of population

is it mandatory

YESSSS Everyone is required to have health insurance either through SHI or PHI, ensuring universal healthcare access

comprehensive set of benefits

including doctors visit, hospital care, prescriptions, mental health and preventative care

Sickness funds (krankenkassen)

• non-profit organization administer SHI, negotiating prices with healthcare providers 

(private health insurance) Premiums are based on

individual risk factors (age, health status,) unlike SHI which is income based

government provides

oversight and regulation but does not directly provide healthcare

Subsidies are provided for low income individuals to

ensure access to SHI coverage

Out of pocket expenses are generally

low compared to many other countries

Current issues 

The aging population and refugee crisis put additional strain on healthcare financing and service delivery

Delivery

Multi-payer system with statutory health insurance (SHI) and private health insurance (PHI) for higher income individuals

Coverage

Universal coverage through SHI for 90% of population; PHI for 10%

Cost per capita (USD

~6,000 per capita significantly lower than the US

Financing

SHI financed through payroll contributions (employers and employees) PHI financed through private payments

Cost regulation

Strict price regulation negotiated between insurers and providers; uses a global budget to control costs

Access

Universal access to care; though rural areas face access challenges PHI holders may get faster or better service

Quality of care

High quality of care with strong preventive services, low infant mortality rate high life expectancy 80.9

Patient outcomes

High patient satisfaction and strong health outcomes driven by regulated standards and benchmarking

Healthcare workforce

Sufficient number of healthcare professionals with some regional shortages in rural areas

Challenges

Rising costs due to aging population, refugee integration and balancing PHI and SHI users