At the invitation of the Konrad Adenauer Foundation, a dozen American “policy-wonks” from differing perspectives travelled 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, 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.
Solidarity: At our first meeting with the federal health agency I asked, “What are the three best characteristics of the German system.” The federal officials mentioned “first and foremost” solidarity. Often repeated, solidarity is the mantra and the cornerstone of the German system. This was explained to mean the entire population participated in and were in agreement that everyone should have the same health care.
Progressive Financing: The second characteristic was “progressive financing” of the system. That is, the wealthier Germans were paying a larger percentage of the costs through an income related premium. They were quick to mention that it is not a tax, but a required income based premium. The government officials were very proud of these two aspects of their health care financing system. When pushed for a third positive, the government officials looked baffled and could not come up with a response. Quality, access, cost effectiveness, choice, and convenience were never mentioned.
Compulsory Coverage: Each meeting revealed that ninety percent (90%) of Germans have compulsory statutory social health insurance through 170 plans. They explained that 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 are covered by 50 private insurance plans. The private option costs more and there is no governmental subsidy for family members. It was stated that the 10% with private insurance are generally wealthy Germans. A requirement for this optional choice is earning more than 49,000 Euro or about $66,000 per year. Those with private coverage get to the head of the line for appointments, have access to private hospital rooms, and use of “master” surgeons and leading specialist for care.
Civil Servant Coverage: At one meeting it was mentioned that private coverage was “complimentary to special systems of civil servants, judges, and soldiers.” I asked,” Who are those individuals and how many Germans get the private coverage as complimentary?” The response was that federal government employees, state employees, professors, and others are defined as civil servants. By some estimates, civil servants make up about 14% of the German workforce. When pressed for an estimate of civil servants in the private insurance option, the German experts stated that 80% of those in the private health option are civil servants with most of their premiums paid by their government employers.
Of course, the follow up questions are, “If 80% 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 and those that do, accept that in social health systems government employees usually get better benefits.
Complete Government Take Over: The government compulsory system is on a “pay-as-you-go” basis. They do not set aside reserves or capital to support the soundness of plans. Private plans are on a fiscally sound accounting basis with reserves and capital standards to assure their on-going 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.
Primary Care and Health Care Budgets: At another meeting we were told about health care budgets. It seems that even primary care physicians operate with more than 100 separate quarterly budgets for office visits, exams, laboratory tests, prescriptions, referrals, admissions, etc. Services can be performed but the physicians will not get reimbursed. Many patients simply have to wait until a new quarterly budget is established for needed services. Patients are told to wait, but never told that the reason may be a “maxed out” budget. Apparently, near the end of each quarter many primary care physicians close their offices after meeting their key budget limits.
At a meeting with doctors we were told that everyone has unlimited access to primary care physicians for a single quarterly copayment of 10 euros. The 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. That compares to the U.S. average of about 3. Why the difference? Of course, the low cost encourages over-utilization and therefore long waits. In addition, Germans must physically go to the doctor 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.
Transparency: 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, and they do not have any source of information on physician budgets to go to another physician who may have budget capacity. Most apparently do not even know that budget limits exist.
At hospitals, we heard about the high quality of surgeries and specialist care. The data showed few complications, low infection rates, high survival rates, etc. 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.”
At the same meeting we were told that a growing number of Germans are going to other countries to get care. In particular, they said that many are going to Great Britain where there is a burgeoning private market where care is high quality, costs are reasonable, and most importantly access is nearly immediate.
Consumerism: At the end of the day, consumers’ interests seem left out of the German health care system. 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 wanted to give quality care to their patients. Most tried to find ways around restrictive legislation and regulations to help patients. The result was usually politicians 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 health care 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.
I am sure that satisfaction surveys show German acceptance of their system, but behind the “home team” pride it is clear that German health care 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, I may have just answered the question.
Ronald E. Bachman FSA, MAAA, is a Senior Fellow at the Center for Health Transformation, an organization founded by former U.S. House Speaker Newt Gingrich. Nothing written here is to be construed as necessarily reflecting the views of the Foundation or the Center for Health Transformation or as an attempt to aid or hinder regulations or the passage of any bill before the U.S. Congress.