Health Policy — The German Way

By any account, health policy is one of the most important fields of policy. It is equally important in the United States of America as it is in Germany or anywhere else in the world.

Health constitutes an indispensable basis for the wealth of a nation and for the well-being and happiness of its people.

There is no other policy field where hopes and aspirations, concerns and fears play such a great role as in health policy.

Regardless of how comprehensive any health care system might be, as a citizen you will always feel it's not quite enough.

And that is why there is hardly any other political office that is subject to so much permanent criticism from the public as that of a health policymaker. Sadly, it would never occur to anyone to spontaneously send them a bunch of roses.

After five years in office, I am now the longest-serving health minister in Europe.

Although the U.S. and Germany pursue different approaches in health policy, I am convinced that each of us can learn and benefit from each other’s solutions.

After all, in a globalized world, it is not only the markets for goods and services that have moved closer together. The competition on the marketplace of ideas is proving to be stimulating and fruitful as well.

The health care system is a vital — and highly sensitive — sector of the economy. In Germany, roughly $290 billion is spent every year on health services in the broadest sense.

About $175 billion of this total is accounted for by the statutory health care system.

In Germany, approximately 70 million out of a total population of 82 million people are covered by the social health insurance system, to which they pay a percentage of their wages and salaries as contributions.

At present, employees pay an average 7.5% of their salary for health insurance coverage, with their employers contributing 6.6%. In the German health care system, this means that those who earn less also pay less, whereas high-income earners pay more. Children and non-employed spouses are co-insured free of charge.

The principle is that the rich pay for the poor, the young for the old — the healthy for the sick. Blue and white-collar workers who earn less than $4,700 per month, are insured on a mandatory basis, as are persons who are out of work, pensioners, poor and homeless people.

They are all covered in the statutory health insurance system according to the same provisions and enjoying equal access to health benefits and services.

Our funding of statutory health care and the access to it is based on the concept of solidarity. This means that contributions are made according to financial abilities and people receive benefits that correspond to their needs.

Persons who earn more than $4,700 per month or are self-employed, can either stay in the social system on a voluntary basis or choose a private health insurance.

Some 10% of the population are privately insured and only a small number is covered by special state programs (for example soldiers).

Members of a private health insurance pay a contribution that reflects their health risk. Bad risks are turned down by private health insurers. However, in Germany, only a small number of persons — about 300,000 — are uninsured. These are mostly people who have been unable to pay their contributions due to financial difficulties.

The new federal government has decided that, in the future, no one may lose their insurance coverage. Persons who lost their coverage because they were unable to pay their premiums, are to be given a right to reinstatement.

I consider this as an exceedingly important step towards the system which I favor — one of mandatory insurance for everyone living in Germany.

Insurance companies in Germany offer a comprehensive package of services. They cover, for instance, outpatient treatment and hospital treatment, all necessary medication, dental treatment, dental prostheses, as well as rehabilitation. In other words, whatever is necessary.

Now, in both the United States and Germany, we face a common problem: Rising expenditure leads to higher contributions and thus to economic difficulties.

Rising contribution rates lead to reduced real earnings. They raise the non-wage labor costs, weaken the investment capacity of enterprises and impair their competitiveness.

In Germany, however, it is not only the employers who view rising health insurance expenses as an economic threat. Employees themselves are not happy either when their insurer raises their contribution rate or premium.

After all, these increases eat away at their disposable net income and force them to cut down on other purchases.

Developments in medicine, pharmacology and medical technology along with demographic, social and economic changes will put further pressure for rationalization measures on our health care system.

Services rendered as much as levels of and increases in health expenditure as a whole need permanent monitoring concerning their medical necessity, quality and economic efficiency. And that is where the real trouble starts.

How is such a demand for cost control put into practice? For one, all industrialized countries are developing into high-longevity societies. This, in turn, requires that we make use of the numerous human, social and economic potentials of our population.

Moreover, there can be no doubt that a moderate increase in health spending is inevitable. Medical progress, too, is a source of added expense. Finally, it is obvious that rising wealth also leads to greater health needs.

Does that mean that we face a no-win situation? Are we even heading for disaster, as some proclaim? I do not believe one word the doom-mongers say. It is, indeed, possible to manage trends in health care expenditure and to guarantee high quality health care for all at affordable prices.

The prerequisite, however, is that policymakers do not allow their good intentions to be coopted by lobbyists.

As you can well imagine, there is no shortage of powerful health lobbyists in Washington or in Berlin. The pharmaceutical industry, in particular, spares neither costs nor efforts when it comes to influencing politicians.

One way in which we try to address the challenges that lie ahead is that in 2006, we will be testing the infrastructure for the electronic health card that is to be provided to all people in Germany as early as possible.

This system will link 82 million insured, more than 100,000 office-based physicians, 22,000 pharmacies, 2,200 hospitals and roughly 300 private and statutory health insurers.

The electronic health card will hold all of the life-saving data that are needed in case of emergency. It will allow health professionals to store a medication history and keep a patient record.

Thanks to this card, every physician — anywhere in Germany — will have easy access to the health details of their patients and be able to avoid treatment errors. It goes without saying that the storage of these data will have to satisfy the most stringent security precautions.

The foregoing is the currently biggest project of its kind in the world. By providing better information while reducing paperwork, it will serve to avoid errors and generate major savings.

Health care policy will always be a choice between conflicting objectives.

While it is our aim to promote innovation and economic growth, control of expenditure and cost reduction are also just as necessary.

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