German Health System Overview
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Health System Expenditures
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Out-Of-Pocket Expenditure As Percentage Of Current Health Expenditure (2019): 12.82%
Source: Global Health Observatory. Out-of-pocket expenditure as percentage of current health expenditure (CHE) (%). Geneva: World Health Organization. Last accessed July 26, 2022.
Out-Of-Pocket Expenditure Per Capita In US$ (2019): $697.2
Source: Global Health Observatory. Out-of-pocket expenditure (OOP) per capita in US$. Geneva: World Health Organization. Last accessed July 26, 2022.
Household out-of-pocket payment in current US$ per capita (2019): $691
Source: Global Health Expenditure Database. Health expenditure series. Geneva: World Health Organization. Last accessed August 31, 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.
“A large part of health care expenditure in Germany is derived from the SHI [Statutory Health Insurance] system (see Table 3.2). Contributions to the 105 sickness funds constitute the major system of financing health care. The sickness funds are responsible for collecting contributions, which they transfer to a central reallocation pool known as the Gesundheitsfonds, which is responsible for pooling and reallocating the revenues according to a risk-adjustment mechanism (see Section 3.3.3 Pooling and allocation of funds).
“General tax revenue is also used for various purposes in the health care system. All tax-based budgets, at federal as well as state level, are determined by legislatures acting on proposals from their governments. In addition, the Hospital Financing Act stipulates that investment costs should be paid from state taxes as well as by owners of public, private not-for-profit and private for-profit hospitals, if listed in the state’s hospital requirement plan. Therefore, states receive tax money for investments in their hospitals (see Section 3.7.1 Paying for health services).
“Taxes as a source of health care financing have decreased throughout the last decade, falling from 10.8% of total health expenditure in 1996 to 4.2% in 2018. The most substantial decrease has been observed in spending on long-term care (about 50%), reflecting the unburdening of municipal budgets after the introduction of statutory long-term care insurance (see Section 5.8 Long-term care). Nevertheless, other spending on investments has decreased as well. Altogether, general government and statutory public sources accounted for 73.5% of current expenditure on health. Private sources accounted for a total 26.5% of total current expenditure: this includes direct out-of-pocket payments made by private households (13.6%). Private insurers financed 8.7%, which includes expenditures for substitutive/comprehensive health insurance, complementary health insurance and long-term care insurance.
“It should be noted that the largest tax-financed item – the subsidies for SHI – is not declared as such in the fiscal statistics. Sickness funds receive a fixed amount from the federal budget for several benefits relevant to family policies: maternity benefits, sick-pay for parents caring for sick children, in-vitro fertilization, sterilization for contraceptive purposes, and prescription-only contraception up to the age of 21 and legal abortions. The federal government transfers its subsidy to the central reallocation pool (see Section 3.3.3 Pooling and allocation of funds). In 2012 the federal subsidy was € 14 billion. In order to consolidate the federal budget, the subsidy was temporarily reduced to € 10.5 billion in 2013 and € 11.5 billion in 2015. In 2016 it was again at € 14 billion and from 2017 it has been set at € 14.5 billion annually (Bundesministerium für Gesundheit (BMG), 2020j). Although these funds come from general taxation, these sums are coded as “statutory health insurance” in health expenditure statistics.* Figure 3.4 shows the main financial flows between the population, purchasers and health care providers in the German health care system in 2018 – including public health services and long-term care (except the purchasers and providers mentioned in the footnote).”
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.
“About 87% of the population receive their primary coverage through statutory health insurance, and 11% of the population are insured through substitutive private health insurance. The rest of the population (eg, soldiers, police officers, and refugees) receive health insurance through specific governmental schemes. Statutory health insurance is mainly financed through a contribution of 14·6% of wage-related income, which is divided equally between the employee and the employer. These contributions are collected in the Central Reallocation Pool (Gesundheitsfonds) and are supplemented with a relatively modest tax subsidy of €14·5 billion (about 7% of the pooled money). The pooled funds are reallocated to the sickness funds according to a morbidity-based risk-adjustment scheme.58,61 Each sickness fund charges an additional contribution fee directly to its members to cover total expenditure; at present, these additional contributions spread around a mean of 1·1% of wage and vary between 0·3% and 1·8%.”
Source: Busse, R., Blümel, M., Knieps, F., & Bärnighausen, T. (2017). Statutory health insurance in Germany: a health system shaped by 135 years of solidarity, self-governance, and competition. The Lancet, 390, 882-897.
“The bulk of health care spending is publicly funded: 84.6 % of total health expenditure (including mandatory substitutive PHI [Private Health Insurance]) was public in 2019. In the EU, this share was only higher in Luxembourg (85.0 %) and Sweden (84.9 %). Extra public funding was approved in 2020 and 2021 to support the health sector during the COVID-19 pandemic (Box 2).”
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.
“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. From the web, last accessed Sept. 30, 2019.
“Health care in Germany is predominantly publicly financed. In 2014, public spending accounted for 77% of total spending on health, OOP [Out Of Pocket] payments for 13.2% and VHI [Voluntary Health Insurance] for 8.9% (WHO, 2016).”
Source: Stefan Greß. “Germany.” In Voluntary health insurance in Europe: Country experience [Internet]. Sagan A, Thomson S, editors. Copenhagen (Denmark): European Observatory on Health Systems and Policies; 2016. Observatory Studies Series, No. 42.
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Page last updated Jan. 25, 2023 by Doug McVay, Editor.