At the invitation of the Konrad Adenauer Foundation, a dozen American policy wonks from differing perspectives traveled to Germany in December 2009. The Foundation was interested in our observations of the German social health system. My interest was how consumerism and individual choice worked in Germany.
We listened to federal and state officials, doctors, hospital executives, members of the Bundestag (German parliament), a health journalist and German policy experts.
They told us that the German system is the fourth most expensive system in the world. Their costs are rising rapidly and are unsustainable. I listened from the perspective of a patient and a consumer wanting access to care, choice of providers, medical information and quality medical services.
Asked for the three best characteristics of the German system, federal health agency officials responded that “first and foremost” is solidarity.
Solidarity is the mantra and the cornerstone, and was explained to mean the entire population participated in and was in agreement that everyone should have the same healthcare.
Second was “progressive financing:” Wealthier Germans pay a larger percentage of the costs through an income-related premium. Officials were quick to say this is not a tax but a required income-based premium.
The government officials were very proud of these two characteristics of their healthcare financing system.
Pushed for a third positive, they looked baffled and could not come up with a response. Quality, access, cost effectiveness, choice and convenience were never mentioned.
At each meeting it was reiterated that 90 percent of Germans have compulsory statutory social health insurance through one of 170 plans. Under most plans, there are waiting times for office visits, delays for elective hospital care and postponed care if quarterly medical budgets are exceeded. Choice of physicians/surgeons is limited and private hospital rooms are not available.
Ten percent of Germans, generally wealthier, are covered by 50 private insurance plans. The private option costs more and there is no government subsidy for family members. Those choosing this option must earn more than 49,000 euro (about $66,000 per year). These individuals get to the front of the line for appointments, have access to private hospital rooms and use of “master” surgeons and leading specialists.
At one meeting it was mentioned that private coverage was “complimentary to special systems of civil servants, judges and soldiers.”
Civil servants are defined as federal government employees, state employees, professors and others. By some estimates, civil servants make up about 14 percent of the German workforce.
When pressed for an estimate of civil servants in the private insurance option, the German experts stated that 80 percent of those in the private health option are civil servants, with most of their premiums paid by their government employers.
Which raises two questions: If 80 percent of the private plan participants are government employees getting better access to better care with the best providers, how is that solidarity?
Do non-civil servant consumers know that most civil servants get preferred coverage and care?
With a shrug and a wink, the off-the-record response was that few Germans understand the system of privileged bureaucrats. Those who do understand accept that in social health systems government employees usually get better benefits.
The government compulsory system is on a pay-as-you-go basis, with no reserves or capital set aside to support the soundness of plans.
Private plans are on a fiscally sound accounting basis with reserves and capital standards to assure their ongoing solvency.
The current political debate is whether or not the government should nationalize the private plans. Some politicians want to seize and spend the hundreds of millions in private plan reserves and capital.
Healthcare budgets came up in one meeting. It seems that even primary care physicians operate with more than 100 separate quarterly budgets covering office visits, exams, laboratory tests, prescriptions, referrals, admissions and more. When the budget runs out, services can be performed but the physicians will not get reimbursed.
Many patients must wait until a new quarterly budget is established for the service. Patients are never told they may be waiting because of a “maxed out” budget. Apparently, near the end of each quarter many primary care physicians close their offices after meeting their key budget limits.
Doctors at one meeting said a single quarterly co-payment of 10 euros ensures unlimited access to primary care physicians. Germans say they need thousands of new primary care physicians. The average number of visits to primary care providers in Germany is about 18 per year, compared with the U.S. average of about three.
Why the difference? The low cost encourages over-utilization and therefore long waits. Germans also must physically go to the doctor’s office for a prescription refill before going to the pharmacy. Free care, choice of physicians, access to treatments? Sounds good, but for the consumer reality seems much different.
I asked, “Do consumers know if the delay of a cancer test is because of a budget limit? Can they find information to go to another physician who has not hit his budget limit for that test?” The answers were “No” and “No.” Citizens are not told the reason for any delays, have no access to information on physicians’ budgets and, of course, most have no idea budget limits exist.
Hospital officials talked about the high quality of surgeries and specialist care. The data showed few complications, low infection rates and high survival rates.
I asked, “Do patients have access to the quality information to compare hospitals and physicians?” The response was, “It is available to data experts but could never be understood by the average German.”
Yet we were told a growing number of Germans are going to other countries to get care. In particular, many are going to Great Britain’s burgeoning private market for high-quality care, reasonable cost and nearly immediate access.
At the end of the day, German consumers seem to be pawns in a great game of controlling costs through budgets, restrictive choices and limited access to care. The games within the game were obvious as the truth was peeled back.
Most providers want to give quality care to their patients and try to find ways around restrictive legislation and regulations. Politicians keep plugging the “loopholes” with more rules, legislation and regulations.
Consumer interests in social health systems seem to fall behind government employees, unionized physicians, bureaucratic budgeting, big pharma and political interests.
I was hoping to find an interest in the “little guy” as professed by social health advocates. Their words were always compassionate, but the result is a cynical dismissal of consumers, who are assumed compliant with edicts from the ruling elite.
Fortunately, the new German government is asking for outside input to include consumerism in healthcare and to promote personal responsibility. It is hard to change a system so ingrained with a history of doing the opposite. The concern voiced was that the opposition would merely wait until they are again in power to reverse any reforms.
Satisfaction surveys probably show German acceptance of their system, but behind the “home team” pride it is clear that German healthcare consumers get the short end of the stick.
The final question may be, “Why is America going down this path to social health insurance?” It doesn’t help the consumer get better health or health care. It only seems to help big government, big business, big hospitals, big pharma and unionized physicians. Then again, that may be the answer to the question.
[Ronald E. Bachman FSA, MAAA, is a Senior Fellow at the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. He is also a Senior Fellow at the Center for Health Transformation, an organization founded by former U.S. House Speaker Newt Gingrich. Mr. Bachman worked as an outside expert with members of Congress and the Clinton administration during the 1993-94 health reform.]
