Health System Costs for Consumers

Annual household out-of-pocket payment, current USD per capita (2019): $691

Source: Global Health Expenditure Database. Health expenditure series. Geneva: World Health Organization. Last accessed July 21, 2022.

Out-of-Pocket Spending as Share of Final Household Consumption (%) (2019): 2.9%

Source: OECD (2021), Health at a Glance 2021: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/ae3016b9-en.

“Out-of-pocket (OOP) payments accounted for 12.7% of Germany’s health expenditure in 2019 – below the EU average of 15.4%. About one third of OOP expenditure is directed to LTC [Long-Term Care] (35% in 2019) (Figure 15). This relatively high share can be explained by the fact that SHI [Social Health Insurance] usually covers only around 50% of total costs for LTC delivered in institutions. After LTC, a sizeable share of OOP spending in Germany is on pharmaceuticals (20% of OOP spending, mostly for over-the-counter medicines), therapeutic items such as spectacles and hearing aids (16%) and dental care (13%). For SHI patients, OOP spending on outpatient medical care relates exclusively to what are known as “individual health services”, such as some ophthalmic services or additional diagnostics during pregnancy, which are provided in ambulatory care settings. In contrast to substitutive PHI [Private Health Insurance], SHI does not cover these services because they have not (yet) demonstrated therapeutic benefit.”

Source: OECD/European Observatory on Health Systems and Policies (2021), Germany: Country Health Profile 2021, State of Health in the EU, OECD Publishing, Paris/European Observatory on Health Systems and Policies, Brussels.

“Cost-sharing and out-of-pocket spending: Out-of-pocket spending accounted for 13.2 percent of total health spending in 2014, mostly on nursing homes, pharmaceuticals, and medical aids.⁹

“Copayments include EUR5.00 to EUR10.00 (USD6.36 to USD12.72) per outpatient prescription, EUR10.00 per inpatient day for hospital and rehabilitation stays (for the first 28 days per year), and EUR5.00 to EUR10.00 for prescribed medical devices. Sickness funds offer selectable tariffs with a range of deductibles and no-claims bonuses. Preventive services do not count toward the deductible. SHI-contracted physicians are not allowed to charge above the fee schedule for services in the SHI benefit catalogue. However, a list of “individual health services” outside the comprehensive range of SHI coverage may be offered to patients paying out of pocket.

“Safety nets: Children under 18 years of age are exempt from cost-sharing. For adults, there is an annual cap on cost-sharing equal to 2 percent of household income; part of a household’s income is excluded from this calculation for additional family members. About 0.3 million of those insured under SHI exceeded the 2 percent cap in 2014 and were exempted from further cost-sharing. The cap is lowered to 1 percent of annual gross income for qualifying chronically ill people; to qualify, those people have to demonstrate that they attended recommended counseling or screening procedures prior to becoming ill. Nearly 6.3 million people, or around 9 percent of all the SHI-insured, benefited from this regulation in 2014.¹⁰ Unemployed people contribute to SHI in proportion to their unemployment entitlements. For the long-term unemployed, government contributes on their behalf.”

Source: Commonwealth Fund. International Health System Profiles: Germany. Last accessed Sept. 30, 2019.

“According to OECD data, out-of-pocket (OOP) expenditures are lower in Germany (12.3% of total health expenditure) than in most other EU countries in 2018 (OECD, 2020d). According to data from the Federal Statistical Office, OOP expenditure as a share of total expenditure increased from 12.7% to 13.6% between 2000 and 2018. In terms of sectors, the largest category of OOP expenditure in 2018 was associated with inpatient long-term care (€ 14.5 billion), followed by pharmaceuticals (€ 10.4 billion), medical aids (€ 7.2 billion), dental care (€ 6.6 billion) and ambulatory long-term care (€ 5.5 billion). Overall, there has been a shift from co-payments for goods (especially pharmaceuticals and medical aids/devices) to those for long-term care services (inpatient and ambulatory) over the last few years. In 2018 almost one third (28%) of OOP expenditure was related to long-term care provided in inpatient facilities as long-term care insurance usually covers only part of the costs (see Section 5.8 Long-term care).

“Co-payments made by those insured under SHI amounted to € 4.1 billion in 2018, which was only 8% of all OOP payments. Just over half of SHI co-payments (54%) were attributable to pharmaceutical prescriptions and medical aids/devices. Other relevant co-payment amounts were for treatment by allied health professionals (23%) and hospital treatment (17%). Since co-payments for physician and dentist visits in ambulatory care were abolished in 2012, there are no SHI co-payments for these services. The relative importance of cost-sharing (user charges) versus direct payments made by people insured under SHI for health goods and services outside the benefits basket is not known because the SHI only collects data on co-payments.

“Germany shows moderate OOP spending and relatively low user charges. According to data from the EU Statistics on Income and Living Conditions (EU-SILC) for 2014, less than 4% of the population reported an unmet need for medical care, mental care or prescription medicines due to financial reasons, which indicates good financial protection. However, because of high cost-sharing for dental care, unmet need for dental care was higher, at 10.5% (Eurostat, 2020a).”

Source: Blümel M, Spranger A, Achstetter K, Maresso A, Busse R. Germany: Health system review. Health Systems in Transition, 2020; 22(6): pp.i–273.

“Despite co-payments accounting for only a relatively small share (i.e. approximately 1%) of total health expenditure, or 2% of all SHI expenditure (including co-payments), public debate has focused more on co-payments than on other types of out-of-pocket spending. This is likely due to the fact that co-payments, and corresponding exemption mechanisms, have a long tradition in the German health care system, particularly for pharmaceuticals, where cost-sharing was introduced in 1923 and has existed ever since (Gericke et al., 2009). Decisions about the level of user charges and protection mechanisms are defined in §§61 and 62 SGB V. In the Health Care Reform Act (1989), cost-sharing was advocated for two purposes: to raise revenue – by reducing expenditure for dental care, physiotherapy and transportation and making patients liable for pharmaceutical costs above reference prices – and to reward “responsible behaviour” and good preventive practice (e.g. dental treatment) with lower co-payments (for more details about the development of user charges between 1989 and 2004 see Busse & Blümel (2014)).

“In 2004 co-payments and other out-of-pocket payments increased substantially for SHI insured patients since the bulk of expected savings through the SHI Modernization Act (4% of current expenditures) was to be achieved by shifting costs to patients via increased co-payments or the exclusion of benefits (for example eye glasses, transport to ambulatory care and over-the-counter medications). Since 2004 the user charge for prescription pharmaceuticals and emergency or inpatient transportation has been 10% of the price with a minimum co-payment of € 5 and a maximum of € 10 per product. User charges for health care services provided by non-physicians, e.g. physiotherapy or home care, amount to 10% of the cost plus € 10 per prescription. Until the end of 2012 co-payments of € 10 per quarter also applied to the first contact at a physician’s (not necessarily a GP) or dentist’s office and when other physicians were seen without referral during the same quarter. This “practice fee” (Praxisgebühr) aimed at reducing the number of unnecessary physician visits in ambulatory care. However, studies found that the fee had not significantly reduced utilization since 2005 compared to the level before 2004, although the bureaucratic effort was enormous, as was resistance among the population and medical professionals, leading to its abolition in 2012.

“Exemptions from co-payments are granted either to specific population sub-groups, to the poor or to people with substantial health care needs. Population sub-groups which have usually been exempt from user charges are children under 18 (except for dentures, orthodontic treatment and transportation) and women requiring maternity care. Furthermore, an SHI-insured person is eligible for exemption from user charges once more than 2% of their annual income has been spent on co-payments, or 1% of annual income for patients with severe chronic conditions. About 0.4% of all SHI insured people exceeded the 2% cap and 7.9% exceeded the 1% cap in 2018 exempting them from further co-payments (Bundesministerium für Gesundheit (BMG), 2020k). The exemption rules do not apply to benefits that are not covered by the SHI package, or to price differentials for reference-priced pharmaceuticals (see Section 5.6 Pharmaceutical care). Besides the SHI exemption mechanism, relief from income tax is granted for “extraordinary” out-of-pocket health care spending above a “reasonable” percentage of the annual household income (1% to 7%).”

Source: Blümel M, Spranger A, Achstetter K, Maresso A, Busse R. Germany: Health system review. Health Systems in Transition, 2020; 22(6): pp.i–273.

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Page last updated Jan. 25, 2023 by Doug McVay, Editor.