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Development of the German Health Care System |
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 Nearly everyone residing in Germany is guaranteed access to high-quality comprehensive health care.
Statutory health insurance (Gesetzliche Krankenversicherung--GKV) has
provided an organizational framework for the delivery of public health
care and has shaped the roles of payers, insurance or sickness funds,
and providers, physicians, and hospitals since the Health Insurance Act
was adopted in 1883. In 1885 the GKV provided medical protection for 26
percent of the lower-paid segments of the labor force, or 10 percent of
the population. As with social insurance, health insurance coverage was
gradually extended by including ever more occupational groups in the
plan and by steadily raising the income ceiling. Those earning less
than the ceiling were required to participate in the insurance program.
In 1995 the income ceiling was an annual income of about DM70,00 in the
old Länder and DM57,600 in the new Länder .
In 1901 transport and office workers came to be covered by public
health insurance, followed in 1911 by agricultural and forestry workers
and domestic servants, and in 1914 by civil servants. Coverage was
extended to the unemployed in 1918, to seamen in 1927, and to all
dependents in 1930. In 1941 legislation was passed that allowed workers
whose incomes had risen above the income ceiling for compulsory
membership to continue their insurance on a voluntary basis. The same
year, coverage was extended to all retired Germans. Salespeople came
under the plan in 1966, self-employed agricultural workers in 1972, and
students and the disabled in 1975.
The 1883 health insurance law did not address the relationship between
sickness funds and doctors. The funds had full authority to determine
which doctors became participating doctors and to set the rules and
conditions under which they did so. These rules and conditions were
laid down in individual contracts. Doctors, who had grown increasingly
dissatisfied with these contracts and their limited access to the
practice of medicine with the sickness funds, mobilized and founded a
professional association (Hartmannbund) in 1900 and even went on strike
several times. In 1913 doctors and sickness funds established a system
of collective bargaining to determine the distribution of licenses and
doctors' remuneration. This approach is still practiced, although the
system has undergone many modifications since 1913.
The formation of two German states in the second half of the 1940s
resulted in two different German health systems. In East Germany, a
centralized state-run system was put in place, and physicians became
state employees. In West Germany, the prewar system was reestablished.
It was supervised by the government but was not government run.
According to the Basic Law of l949, Germany's constitution, the federal
government has exclusive authority in public health insurance matters
and sets broad policy in relation to the GKV. The government's
authority applies in particular to benefits, eligibility, compulsory
membership, covered risks (physical, emotional, mental, curative, and
preventive), income maintenance during temporary illness,
employer-employee contributions to the GKV, and other central issues.
However, except for the funding of some benefits and the planning and
financing of hospitals, the responsibility for administering and
providing health care has been delegated to nonstate entities,
including national and regional associations of health care providers,
Land hospital associations, nonprofit insurance funds, private
insurance companies, and voluntary organizations.
Portability of coverage, eligibility, and benefits are independent of
any regional and/or local reinterpretations by either insurers,
politicians, administrators, or health care providers. Universal
coverage is honored by any medical office or hospital. Check-ins at
doctors' offices, hospitals, and specialized facilities are simple, and
individuals receive immediate medical attention. No one in need of care
can be turned away without running a risk of violating the code of
medical ethics or Land hospital laws.
The health care system has achieved a high degree of equity and
justice, despite its fragmented federal organization: no single group
is in a position to dictate the terms of service delivery,
reimbursement, remuneration, quality of care, or any other important
concerns. The right to health care is regarded as sacrosanct.
Universality of coverage, comprehensive benefits, the principle of the
healthy paying for the sick, and a redistributive element in the
financing of health care have been endorsed by all political parties
and are secured in the Basic Law.
By the mid-1990s, health care benefits provided through the GKV were
extensive and included ambulatory care (care provided by office-based
physicians), choice of office-based physicians, hospital care, full pay
to mothers (from six weeks before to eight weeks after childbirth),
extensive home help, health checkups, sick leave to care for relatives,
rehabilitation and physical therapy, medical appliances (such as
artificial limbs), drugs, and stays of up to one month in health spas
every few years. Persons who are unable to work because of illness
receive full pay for six weeks, then 80 percent of their income for up
to seventy-eight weeks. In an attempt to contain costs, beginning in
the 1980s some of these benefits required copayments by the insured.
Although these fees were generally very low, some copayments were
substantial. For example, insured patients paid half the cost of
dentures, although most other dental care was paid by health insurance.
The system has managed these achievements relatively economically. In
1992 about 8.1 percent of the gross domestic product (GDP--see
Glossary) went into medical care, or US$1,232 per capita, compared with
12.1 percent of GDP and US$2,354 per capita in the United States. Even
so, Germany devoted about one-third of its overall social budget to
health care, an amount surpassed only by retirement payments.
The German health care community has made a serious and sustained
effort to control the growth of health costs since the mid-1970s. The
steep rise in health expenditures in the first half of the 1970s
prompted the passage of the Health Insurance Cost Containment Act of
1977. The law established an advisory board, the Concerted Action in
Health Care, to suggest nonbinding guidelines for health care costs.
Chaired by the federal minister for health, its sixty members represent
the most important interest groups having a stake in health care. The
board has contributed to slowing the growth of health care costs, but
further legislation has been necessary.
Modest copayments for medications, dental treatment, hospitalization,
and other items were introduced in 1982 for members of sickness funds.
These payments were further increased by the Health Care Reform Act of
1989 (Gesundheitsreformgesetz--GRG) and again by the Health Care
Structural Reform Act (Gesundheitsstrukturgesetz--GSG) of 1993. The GSG
also introduced new regulatory instruments to monitor more closely
access to medical practice, to reorganize sickness-funds governance,
and to control medication costs and prospective hospital payments. In
addition, it proposed measures to overcome the separation between
ambulatory medical care and hospital care that prevailed in the former
FRG.
 Source: U.S. Library of Congress
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Finance 
