The system is sick
In international comparisons, medical care in Germany is at a high level as a study by the Organisation for Economic Co-operation and Development (OECD) shows. German healthcare is one of the most renowned systems in the world. It is based on the principle of solidarity, but reality shows that this principle is largely ignored.
By Anne Odendahl
Germans who are able and willing to pay more can expect a privileged health treatment. There is nothing bad about it if it did not affect those who are not able to pay more. Being in a doctor’s practice is always an unpleasant feeling that creeps up deep from the stomach to the throat where it gets stuck until leaving this place of coughing people, pale faces and aching bones again.
Expecting or hoping one will receive the best treatment available soon helps endure that feeling. But no other place than a doctor’s practice itself describes the discrepancies between hope and reality best. Let us imagine the case of Mrs. Müller. She is an average middle class German with statutory health insurance (SHI). Mrs. Müller has been suffering from constant headaches and phones her doctor to make an appointment. The lady on the phone will ask for her name and then for her insurance company. On average, statutory ensured patients wait for an appointment with their doctor for eight days when having acute medical conditions and 26 days without acute medical conditions. In contrast, privately insured patients on average wait three days when having acute medical conditions and 12 days without acute medical conditions. After another two weeks with headaches, Mrs. Müller finally has her appointment. The air is stuffy and has an undertone of bleach when she enters the practice. There is the penetrating smell of disinfectants. The pictures on the magnolia-coloured walls are cheap benign prints of uplifting scenes, and the curtains are usually drawn to prevent daylight from shining inside. The waiting area has a table full of old magazines, leaflets about various illnesses and plastic chairs. It is about as comfortable as a train station. The doctor will prescribe painkillers for now and glasses to cure her headaches. Going to the pharmacy and later the optician means that Mrs. Müller has to pay a patient co-payment. This is 10 percent of the price for medication for the painkillers and 10 percent of the price for the glasses plus 10 euros fee for the prescription. Relieved to have left the distressing atmosphere in the doctor`s practice, now wondering how much her glasses will cost, Mrs. Müller overlooks a car, gets hit and is delivered to hospital. The on-duty assistant is waiting to operate on her broken leg. The supposedly better qualified chief physician, who you generally assume has more experience, is not available for Mrs. Müller.
Statutory vs. private health insurance
In international comparison, medical care in Germany is at a high level as a study by the Organisation for Economic Co-operation and Development (OECD) shows. There are 3,8 doctors and 11,4 nurses for 1.000 citizens, whereas the average of the developed countries is 3,2 doctors and 8,8 nurses. German healthcare is one of the most renowned systems in the world. The main idea of the statutory health system is the principle of solidarity. Membership in SHI is compulsory. The contributions are based on income in order to ensure that the cost of health care is shouldered primarily by the better off, and everybody is able to access services. However, employees with a yearly income above a certain threshold, 53.550 euros in 2014, and the self-employed, can opt out of the statutory system and insure themselves privately. In fact, SHI is less of an insurance based on the principle of risk-equivalent premiums, but rather a fund into which members have to pay according to their financial ability. Statutory sickness funds are financed predominantly through payroll taxes, which have been legally fixed at 15,5 per cent of gross wages. Roughly 10 per cent of the population, or 8,89 million people, is covered by private health insurance (PHI), with civil servants and the self-employed making up the majority of this group. The contribution level of PHI is governed by different factors. These include age, health history, gender, and the choice of service package. The average contribution for a male staff member at the age of 40 years is about 120 euros for a basic benefit package and up to 320 euros for a comfort package with a range of selectable services.
Enormous challenges in the healthcare system
Although constantly being criticised for being unfair and treating the statutory insured as second-class human beings, the government denies the existence of an unjust two-tier healthcare system in Germany. Just recently, before the annual German Medical Assembly, the German health minister Hermann Gröhe from the CDU declared himself in favour of the SHI and PHI system: "I want to clearly state: The two-pillar principle [of SHI and PHI] in the German healthcare system has proven itself. I am firmly convinced that the system of competition is an important contribution for the good of all insured medical care in Germany."
Various studies suggest that people with a PHI live longer than those with only a statutory insurance and are used as proof of negative effects of a two-tier health system. The often too easily drawn statistical correlation is that the privately insured have more money, which grants them access to better medical treatment and therefore a longer life. However this interpretation is wrong, as it is more a combination of many socio-economic factors that lead to a healthier and therefore longer life. Wealthier populations are often more educated and therefore behave more health-consciously, which in turn can have a positive impact on their life expectancy. So it would be invalid to argue just because someone can afford a PHI, they live longer.
The reasons for the obvious difference among patients in German healthcare are more complex and are deeply rooted in the system itself. Let us take a look at the effects and its causes.
Long waiting times
Statistics give evidence that the statutory insured wait more than double the time for a doctor’s appointment. The reason for this in rural areas is the medical requirements planning (MRP). The MRP was originally an instrument to determine a ratio between residents and physician number that was introduced in the early 1990s to prevent an oversupply of physicians. Meanwhile, the situation has changed: in sparsely populated rural regions there is an incipient shortage of doctors. The reasons for this are manifold: Medical advances and increasing life expectancy bring a steadily growing demand for medical services with them. In addition, there is a population decrease, accompanied by the loss of social and cultural infrastructure. Opening a practice in the country appears less and less attractive in the eyes of many young doctors. A recent reform tried to solve the problem of the shortage of doctors, however this is a slow process and many rural areas are currently deprived of reliable health care whereas big cities experience an oversupply of doctors.
Another an even more difficult problem, which causes long waiting hours for statutory ensured patients, are budget caps. German doctors are paid for their treatments according to the uniform assessment standard (EBM). Four times a year the physician notifies his regional Statutory Health Insurance Physicians (KV) with the names of all statutory health insurers in the last three months, their diagnoses and the services provided. All treatments and medical services are paid according to a corresponding EBM-digit. The KV will calculate from these numbers the budget the doctor has for the next quarter. Once the limit of this budget is reached, further benefits are paid only to the so-called residual score. Doctors can recognize in their practice management system whether it is a quarter end and if their medical work is still rewarded sufficiently. It happens often that doctors, especially those who have high technology costs, cannot cover their costs anymore. Therefore patients are given a later appointment in the next quarter when their treatment is paid with the full price.
Treatment by the head physician
The complicated systematics of the remuneration system also leads to the next point. Why was Mrs. Müller not operated on by the head physician? The answer seems quite easy: the head physician can earn more money when treating a privately insured patient even if it is the exact same treatment and nothing extraordinary, modern or expensive. This is only possible because in Germany there are two different coverage catalogues. The EBM, as mentioned above for statutory ensured patients, and the GOÄ, the regulation of charges for privately ensured patients. An example: once in hospital Mrs. Müller decides to do a prophylactic mammography screening. For her complete treatment the radiologist will be paid 53,79 euros according to 531 EBM-digits. But for a woman with a private insurance he will be paid 26,33 euros x 2 (for both sides) according to 450 GOÄ-digits. That is 52,66 euros and less than for Mrs. Müller. However, there is a peculiarity to the GOÄ. Depending on the difficulty and time required the simple sentence can be increased. A 2,3-fold increase in the statutory maximum sentence is usually billed for all average performances. A 3,5-fold increase in the maximum rate requires a special justification statement by the doctor, taking the 52,66 X 2,3 sums up to an overall price of 121,12 euros and therefore to more than double the remuneration than for Mrs. Müller. A study released in May 2013 by the Institut für Gesundheitsökonomik (Institute for health economics) in Munich even suggests that a factor of 4,35 is applicable to radiological services. That means that on average the payment for comparable services is more than four times higher when being accounted on a privately ensured patient. As the head physician is in charge, he will definitely make sure to always treat privately insured patients in order to charge the highest possible price for his treatments.
Patient co-payment
So is there a huge advantage for the SHI companies which have to pay so much less to the doctors for their customer’s treatments? Is that why the government does not want to abolish of the two-pillar system? In order to keep their fund full of money? No. We’ve reached the core of the problem that brings the system to its knees. The developments in Germany are clearly shifting towards a population with more old and sick people rather than young and healthy. This development brings the healthcare system based on the principle of solidarity to an existential edge. Future scenarios predict the collapse of the system when there are not enough young taxpayers financing the treatments of the elderly. Although there is still enough money in the SHI fund, the SHI companies have to require patient co-payments from their patients in order to survive on an economic level. Private health insurance companies do not need to ask for this on an obligatory basis from their customers, who can decide themselves to choose a tariff with co-payment to lower the monthly premium. Furthermore the PHI companies do not underlie the principle of solidarity, but only those of the free market economy, as does every other insurance company.
There is cure for the sick (wo)man
What is there left to do for Mrs. Müller and the sick system she is stuck in? Either choosing second-class treatment in SHI, or risking expensive premiums she might not always be able to pay when being privately insured?
The German parties SPD, Grüne and Linke have been arguing for years in favour of a so-called ‘Bürgerversicherung’, a uniform health insurance. The ideal picture: all citizens should pay according to their performance in the SHI fund and all patients should receive the same access to health care. But a uniform health insurance is not expected to solve the problems of unequal care. Rather, there is a risk that the level of general supply falls and those who are financially able can buy additional health services. The two-class medical system would be replaced by a multi-tier system for health care on your budget – beyond the contribution to health insurance.
After all, the SHI must provide more than adequate quality of care and waiting times for those wealthy enough to afford PHI to decide to remain with the statutory system. Nevertheless the system has its flaws and those in charge have to acknowledge a two-tier system in order to fight it and its crumbling foundation. Indeed, it should be in the German government’s interests to alter the fee catalogues for health care provision in order to prevent doctors from charging so much more for privately provided treatment. This might persuade more people to take up PHI and therefore take the burden of an ageing society off the governmental scheme. This would improve the balance between statuary and private health insurance and would do little to damage the high quality of care that seems to characterise both sectors.
Anne Odendahl is a young journalist from Germany. She is passionate about political issues, in a national and international context. She is working for the Konrad-Adenauer-Stiftung in the department of civic education.
