Illustration by Erica Löfman
The phrase “healthcare reform” entered the politicians’ lexicon of stock ideas a long time ago: no matter what country you live in, the system that provides medical care seems to be in constant refurbishment. Perpetual adaptation and improvement is a good thing in principle, but as governments keep on discovering, a new healthcare policy is not easy to agree on, never mind convert into actual change. Compromises between political parties, labour unions and powerful lobby groups for the likes of pharmaceutical companies and doctors hold back change. Any particular nation’s old problems tend to persist, like a cold you can’t shake.
Germany’s niggling cough is its two-tier health insurance system. It remains one of the few developed countries where you can opt out of the state system altogether and insure yourself completely privately. About 10 percent of the population – mostly the self-employed or those with high salaries – are privately insured, while the 90 percent have to muster healthcare for the whole nation.
On top of this, the chronically ill, who incur the biggest costs, have trouble getting private insurance, so the 90 percent who pay into the state system also pay for the most expensive cases. “That’s why we don’t need to be surprised that the social contribution system doesn’t work,” says Rene Bormann, a health policy spokesman for the Friedrich-Ebert-Stiftung, a think tank associated with the SPD. Bormann believes in the German state insurance system (which is made up of a patchwork of statutory insurers or gesetzliche Krankenkassen) - at least in principle. He particularly believes in the principle that employer and employee share health insurance costs. “I think it’s important that the employer also contributes, because then he has the motivation to form work conditions accordingly,” he says. “That’s a very important central point, and I think we should hold onto that.”
New plan, same problem
Unsurprisingly, Bormann is unimpressed with the kind of reform the new health minister Philipp Rösler, a pro-business Free Democrat, has in mind. Like every other idea so far, Rösler’s plan conspicuously fails to address the inherent unfairness of the public-private schism. In fact, his Kopfpauschale idea – a monthly flat-rate fee paid regardless of income – is more likely to widen the gap between rich and poor among state patients, and continues to protect private insurance companies from intervention. “To start with, I find the idea that the receptionist or the canteen lady downstairs pays the same as me a bit difficult,” says Bormann.
As Rösler’s Kopfpauschale was presented to parliament in February, the leftist opposition lined up its responses. The most withering came from SPD health spokesman Karl Lauterbach, a veteran health policy enthusiast and conservative antagonist. Lauterbach’s research assistant Olaf Rotthaus spelt out the main point: “The central aim has to be getting over the divided insurance system,” he says. “We need insurance from everyone, for everyone, for everything. That means a unified contribution system for private and state patients. That would be the most effective measure.”
The political battle lines make sense. The SPD’s alternative to the FDP’s notion is nicely egalitarian, but it’s hard to avoid pointing out that Germany’s unfair two-tier system, so roundly blamed by Rotthaus, survived almost a whole decade of SPD health ministership: during Ulla Schmidt’s tenure from 2001 to 2009, piecemeal reforms failed to make the system either fairer or more efficient.
Inefficiency is as big a problem as injustice. Keeping Germany healthy is chronically expensive: this country has the fourth highest health expenses in the world and the compulsory individual fees, be they state or private, carry on rising faster than inflation.
The average state health insurance contribution is €500 a month, which is split between employee and employer – while the self-employed pay everything themselves, unless they’re lucky enough to be in the Künstlersozialkasse for freelancers in creative professions (see How to get health insurance in Germany). But both state and private health insurance companies have increased their premiums in recent months as rising unemployment has put more pressure on the welfare state.
Yet however much the contributions grow, they never seem to be enough for Germany’s ravenous healthcare system. It demands vast sacrifices, and in the past few years, the government has been forced to inject more and more tax money into the system: from 2008 to 2009, its contribution to the newly devised Gesundheitsfond (“health fund”) – a centralized pot into which everyone’s healthcare contributions are paid – doubled from €1.5 billion a year to €3 billion. The idea that healthcare should be at least partially funded by tax money is a central plank of more left-minded policy – the notion that everyone contributes and everyone gets basic healthcare, and that competitive capitalist model isn’t necessarily the most effective way to keep people alive.
In Europe, Britain’s National Health Service, for all its flaws, is still the model example of an entirely tax-financed system. The last round of German reforms, brought about during the SPD-CDU coalition government in 2007, was a gesture in this direction. Even Rösler’s new plan requires a significant tax contribution, as low earners would receive an extra health allowance which would have to be financed by tax money. But Bormann is not convinced such a system would work in Germany.
“I’m not really sure if financing through tax is always the right idea,” he says. “In the last few years, there have been many efforts to raise the contribution from tax money. And in the following year, all of a sudden the state budget didn’t look so good, and everyone said the contribution was too high. It’s a risky business.” Bormann has a better idea: “If we widened the income base from which we got healthcare contributions - for example, if we included capital income - we’d get significantly more money.”
Coming back to Rösler’s plan, Bormann says, “On the whole, I don’t think the Kopfpauschale idea gets us closer to our aims. It’ll create additional and disproportionate bureaucracy. I think we should keep the system we have in place now and try to optimise it.”
Private is not always best
Peter Sawicki, head of the Institute for Quality Efficiency in Healthcare, a government-appointed body that examines new medical services and drugs, recently got himself into trouble over his expenses and was dismissed by the new government. But he was also seen as an official who protected the consumer against avaricious pharmaceutical giants, and a few people believe the business-friendly government expedited his departure to clear away an inconvenient troublemaker.
His views are certainly obstructive to the pharmaceutical industry: “I think the market forces are often suspended for pharmaceuticals – supply and demand don’t determine the prices – and with the huge amount of money they get, they win influence,” Sawicki says. “There needs to be an independent body that decides whether a new medication has additional patient-relevant benefit. If it doesn’t, then it shouldn’t be reimbursed at all, and if it does, then you should have to negotiate about the price.”
Sawicki has a simple solution to Germany’s healthcare problems. “There should be a general, compulsory basic insurance for everyone. After that, people should be able to voluntarily insure themselves to get additional services – for example, for single rooms or treatment by the head doctor [“Chefarzt”]. Some party, – I don’t know which one - should back such a sensible scheme, and go into an election with it.”
Bormann, along with the SPD, wants some kind of merger of state and private health insurance. Exactly how this can be achieved is difficult to define: Rotthaus ominously talks about Germany needing “a third way beyond radical market values and state medicine”. But it seems even well-earning Germans are beginning to notice the pitfalls of going private – an apparently privileged situation much-coveted among the middle classes. “I was on private insurance for about a year – they have their tricks,” says Ralf, a Berlin musician. “They were able to charge me for care that they denied anyway!” These are probably the “radical market values” that Rotthaus mentioned.
But there is another problem with private insurance: it encourages massive waste of medical resources. Some doctors are reported to be able to earn 50 percent of their income from the 10 percent of their patients they treat privately. Often the only difference in the treatment is that they don’t keep private patients for as long in the waiting room. Private patients also get appointments quicker from many specialists. Some clinics and hospitals even have special appointment hotlines for privately insured patients.
A recent article in Stern magazine exposed the massive temptations doctors come under to over-treat private patients. Mike, a 33-year-old privately insured Berliner hurt his knee while playing squash. “I said ‘privat versichert’ and it was of course no problem getting an appointment with a ‘booked out’ orthopedic specialist pretty much right away. The problem was escaping his over-zealous care. First he prescribed me expensive knee braces, custom shoe inserts, then physiotherapy. Soon, it was surgery – which he would be performing himself at a private clinic…” A second doctor said the operation was unnecessary. Mike resumed his weekly squash game. His knee got better, “by itself.”
Many commentators note that doctors with privately insured patients are the most privileged salesmen – they have the instant confidence of the customer, and the customers have the comfort of feeling that their money is being spent on them.
On top of this, it is very difficult to return to the state system once you have gone private, as Ralf found. “They’ll raise your premiums substantially once you’re no longer entitled to public healthcare,” he says. To return to a state insurer, you’ll have to get a proper professional contract with employee status, or else go on welfare (Hartz IV) so that the job centre pays for your insurance.
The situation can sometimes be quite precarious for expats. Sarah is a non-EU national working as a freelance English teacher in Berlin, which means she finds it difficult to get state coverage in the first place. “So as far as I understand it, right now private is my only choice,” says the 39-year-old New Zealander. “Unfortunately, the premiums are slanted towards the needs and budgets of high-income earners, and I can’t afford it.”
Due to a Kafkaesque quirk of bureaucracy, Sarah’s just lost her insurance coverage. “They asked me to supply a date of entry stamp from my passport or a copy of travel tickets. Of course, there is no such thing as travel tickets any more, and I only keep such things after I travel if I can claim it as tax deductible. I sent the insurance company a photocopy of my first entry into the EU, which was actually near on 10 years ago, and explained that that was my first entry and that I had no other stamps because of the EU no-stamping policy. So they cancelled my insurance because of that, saying it was too old.” At the moment, she is completely uninsured.
Ralf, Sarah, Sawicki, Rotthaus and Bormann all have a clear view of the central predicament, but that doesn’t mean the solution is simple. “The money sometimes goes into the wrong channels,” Bormann says. “And it’s sometimes a bit of a problem that we always see health as just a question of costs. After all, the healthcare sector is also a huge part of the economy that sustains hundreds of thousands of jobs – and there is a lot of unused economic potential in certain areas. It’s often a question of financing this. We just have to find a way of financing it fairly.”