Germany has a universal multi-payer health care system. It is financed through a combination of statutory health insurance (Gesetzliche Krankenversicherung) and private health insurance (Private Krankenversicherung). Germany pioneered social health insurance in 1883. The first law covered certain groups of workers and raised national coverage to about 5–10 percent of the population. In 2010 the health sector’s turnover was about US$369 billion (€287 billion), equal to 11.6 percent of gross domestic product (GDP) and about US$4,500 (€3,510) per capita. According to the World Health Organization, the system was 77% government-funded and 23% privately funded in 2004. Total health spending in 2001 was 10.8 percent of GDP. Germany’s health outcomes are generally high. In 2004 male life expectancy was 78 years, ranking 30th worldwide. Physician density reached 4.5 per 1,000 inhabitants in 2021, up from 4.4 in 2019. Infant mortality was 4.7 per 1,000 live births. The Euro Health Consumer Index ranked Germany seventh in 2015, describing it as one of the most consumer-oriented healthcare systems in Europe, with patients able to access almost any type of care without major restrictions.
History
1883 Germany has the world's oldest national social health insurance system, with origins dating back to Otto von Bismarck's social legislation, which included the Health Insurance Bill of 1883, Accident Insurance Bill of 1884, and Old Age and Disability Insurance Bill of 1889. Bismarck stressed the importance of three key principles: solidarity (the government is responsible for ensuring access by those who need it), subsidiarity (policies are implemented with the smallest political and administrative influence), and corporatism (the government representative bodies in health care professions set out procedures they deem feasible). Mandatory health insurance originally applied only to low-income workers and certain government employees, but has gradually expanded to cover the great majority of the population.
1883–1970
Unemployment insurance was introduced in 1927. In 1932, the Berlin treaty (1926) expired and Germany's modern healthcare system started shortly afterwards. In 1956, Laws on Statutory health insurance (SHI) for pensioners come into effect. New laws came in effect in 1972 to help finance and manage hospitals. In 1974 SHI covered students, artists, farmers and disabled living shelters. Between 1977 and 1983 several cost laws were enacted. Long-term care insurance (Pflegeversicherung) was introduced in 1995.
1976–2000 Since 1976, the government has convened an annual commission, composed of representatives of business, labor, physicians, hospitals, and insurance and pharmaceutical industries. The commission takes into account government policies and makes recommendations to regional associations with respect to overall expenditure targets. Historically, the level of provider reimbursement for specific services is determined through negotiations between regional physicians' associations and sickness funds. In 1986, expenditure caps were implemented and were tied to the age of the local population as well as the overall wage increases. Copayments were introduced in the 1980s in an attempt to prevent overutilization and control costs.
21st century As of 2007, providers have been reimbursed on a fee-for-service basis; the amount to be reimbursed for each service is determined retrospectively to ensure that spending targets are not exceeded. Capitated care, such as that provided by U.S. health maintenance organizations, has been considered as a cost-containment mechanism, but since it would require consent of regional medical associations, it has not materialized. The average length of hospital stay in Germany has decreased in recent years from 14 days to 9 days, still considerably longer than average stays in the U.S. (5 to 6 days). The difference is partly driven by the fact that hospital reimbursement is chiefly a function of the number of hospital days, as opposed to procedures or the patient's diagnosis. Drug costs have increased substantially, rising nearly 60% from 1991 through 2005. Despite attempts to contain costs, overall health care expenditures rose to 10.7% of GDP in 2005, comparable to other western European nations, but substantially less than that spent in the U.S. (nearly 16% of GDP). The system is decentralized with private practice physicians providing ambulatory care, and independent, mostly non-profit hospitals providing the majority of inpatient care. Approximately 92% of the population are covered by a statutory health insurance (SHI) plan, which provides a standardized level of coverage through public sickness funds (Gesetzliche Krankenkassen). Standard insurance is funded by a combination of employee contributions, employer contributions and government subsidies on a scale determined by income level. Higher-income workers can choose to opt-out of the statutory plan in favor of private insurance (Private Krankenversicherung). Digitalisation has become an increasingly important part of outpatient healthcare in Germany, including video consultations and electronic prescriptions. Since 1 January 2024, electronic prescriptions have been mandatory for prescription medicines covered by statutory health insurance, and they can also be issued following video consultations. Commercial telemedicine platforms operating in Germany, such as TeleClinic and DoktorABC, provide remote access to medical consultations and prescription-related services. Electronic prescriptions can be redeemed at a pharmacy chosen by the patient, including online pharmacies.
Regulation
Since 2004 the Federal Joint Committee (Gemeinsamer Bundesausschuss) has overseen regulation of the German health care system. It is a public body that issues binding rules under health reform laws and makes routine coverage decisions. The committee has 13 voting members: representatives of insurers, hospitals, physicians, dentists, and three independent members. Five patient representatives take part in an advisory role but do not vote. It is governed by the Fifth Book of the German Social Code (Fünftes Sozialgesetzbuch). One of its main tasks is to decide which treatments and services statutory health insurance must cover. Decisions are based on whether care is necessary, cost-effective, sufficient, and appropriate.
Health insurance
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