Introduction
The German social welfare system was introduced between 1883 and 1889 by Chancellor Bismarck in an attempt to maintain his authoritative rule by outmaneuvering the rising social democratic movement. This system, which has survived several political eras—the Kaiserreich, the Weimar Republic, and National Socialism—was created to insure general life risks. State legislation on health insurance was passed in 1883, on state accident insurance in 1884, and on old-age and pension insurance in 1889. In 1927, this system was supplemented by legislation on unemployment insurance (including job-creating measures). Subsequent to the increasing number of senior citizens, a fifth pillar of welfare, the nursing insuring act, was enacted in 1994. Currently, more than 90% of the 82 million inhabitants of Germany are covered by the state-provided social welfare system in regard to sickness, accidents at the workplace, occupational disease, disability, unemployment, nursing needs, and motherhood.9
Objectives of German Social Welfare
The principles of state-provided social welfare are listed as follows:
Compulsory membership. All adults with incomes below a certain level (3.375 € per month in 2002) must join. Family members (children, spouses) without income are covered as well. Professionals and people with incomes above this level may opt for the social insurance system or obtain private insurance.
Solidarity. Payment depends on one’s income; services of social welfare depend on one’s needs. Everyone receives the same services, independent of premium, health risks, gender, or age. Public pension plans and unemployment insurance are related to former income level and the length of time insured.
Principally, health insurance is financed through the members. Nevertheless, insurance fees are divided (e.g., between employers and employees, between pensioners and the state pension insurance). Low-income groups like students pay a fixed fee. With the exception of state accident insurance, which is paid solely by the employers, each person pays around half of the premium. Because the level of the premium is related to income, the basis of the social welfare system is determined by the sum of all wages. The state subsidizes some of the insurance plans.
Social welfare insurance plans are self-governing public corporations under federal supervision. Their boards are composed of elected delegates equally representing employers and employees. Numerous organizations back up the insurance plans. However, all are controlled by state health legislation. Unemployment insurance has only one supporting organization, the federal labor office.
The tasks of different insurance plans partially overlap, which can lead to conflicts with respect to responsibility for measures. Who pays is determined by who has the financial risk in case the measure fails. State pension or unemployment insurance is responsible for vocational rehabilitation; state pension or health insurance is responsible for “medical” (functional) rehabilitation. Apart from this, health insurance covers medical treatment. This “division of responsibility” has strings attached. Vocational training, for example, cannot be started during medical treatment or medical rehabilitation, even though this would be advantageous from the patient’s point of view. Therefore, comprehensive care relies on the voluntary cooperation of health professionals beyond the limits of administration.
Community welfare completes the system of social welfare. It is founded on the principle of communal welfare, which existed long before Bismarck. Under this plan, persons who are not able to make their own living, who are unemployed (for more than 1 year, currently), and who are not covered by health insurance can ask for income support or welfare. Social welfare is financed primarily by community taxes. The number of people on welfare is determined mainly by employment opportunities. In the past 20 years this number has grown threefold.
Private Insurance Plans
Individuals with incomes above a certain limit can obtain private insurance. Private insurance plans charge according to the covered services. Age, gender, health risks, and chronic illnesses influence the level of premium an individual is charged. Private insurers can reject applicants if the insurance risk is assessed as being too high. About 10% of the population had private health insurance in 2003.9 Persons with epilepsy who cannot insure themselves in the state health insurance system (e.g., self-employed persons, lawyers, and physicians) may have difficulty finding private health insurance. If they are accepted by a private company, they often have to pay high risk premiums or the insurance plan does not include epilepsy as a covered condition. For persons with epilepsy, private accident insurance plans and disability insurance are especially difficult to obtain. Among 236 privately insured patients with epilepsy, none was able to obtain disability insurance.10
State Health Care
State Health Insurance: Budget Organization and Development
Originally, state health insurance was established to guarantee medical care and help avoid loss of income due to sickness. Since 1970, members of the state health insurance system generally receive sickness benefits for 6 weeks. In 2003, more than 72 million inhabitants were insured by state health
insurance.9 Of these, about 30% were covered as noncontributing family members, and 22% were pensioners paying minimal contribution. During the past 20 years, the income from premiums has increased at a far slower rate than the expenditure. Although the average membership rate changed from 8.4% to 14% of salary, expenditure increases continuously, especially expenditure on hospital treatment, which increases every year between 1% and 3%.2,9 Hospital expenditure accounts for one third of all health care expenditures.
insurance.9 Of these, about 30% were covered as noncontributing family members, and 22% were pensioners paying minimal contribution. During the past 20 years, the income from premiums has increased at a far slower rate than the expenditure. Although the average membership rate changed from 8.4% to 14% of salary, expenditure increases continuously, especially expenditure on hospital treatment, which increases every year between 1% and 3%.2,9 Hospital expenditure accounts for one third of all health care expenditures.
In 1993, a law was passed to keep the increase in expenditures equal to that of the income premium. Expenditure has decreased as a result, but not enough. Therefore, numerous laws have been passed to control expenditures. This process is ongoing. Financial barriers between hospital treatment and primary care are partially torn down through “integrative care” such as disease management plans and managed care programs. Administration has blown up to a great extent, not to the advantage of patent care. Insurance plans independent from employment and wages are in discussion. As a result, the idea of the welfare state is being questioned, with some suggesting that state health insurance should be limited to standard treatment, and optional treatment should be paid for privately. Already, since about 8 years, an increasing amount of health care services has to be paid by the patients themselves in addition to the reimbursements of the insurance.
Health Services
Germany has a high density of medical care services, albeit one that is unevenly distributed between urban and rural areas. In 2003, there was one physician for every 370 inhabitants and one hospital bed for every 150 inhabitants, which is a decrease of about 20% within the last 15 years. Of about 300,000 physicians, 41% worked in hospitals, 3% in rehabilitation units, 42% in solo practice, and 13% in scientific institutions, administration, and federal health services (institutions that control epidemics with measures such as vaccinations and hygiene). When a patient decides to be treated, he or she has free choice among doctors in private practice (general practitioners and specialists, e.g., neurologists) who are contractors of health insurance plans. Often the proximity of a practice or the waiting period rather than the quality of treatment is decisive in determining a patient’s choice. Doctors in own practice may refer patients to hospitals or to outpatient treatment units at hospitals. The ratio between doctors in hospitals and nonmedical staff members (e.g., nurses, technical staff members, midwives, social workers, psychologists, pharmacists) was 1:7.5 in 2003.9
The basic idea of the German health system is that the doctor provides treatment and advice. Newly, therapeutic psychologists in solo practice are included in the treatment service and refunded by the insurance plans comparable to physicians. Despite this rather physician-centered approach, nonmedical health-related services outside the hospitals have expanded greatly during the past 100 years. Such services include advice centers established by churches and welfare associations and health-related services developed outside the state health systems. These services as a rule are either free of charge for the clients (e.g., advice centers of churches or of the state) or clients can use the service at their own expense (e.g., physiotherapy or psychotherapy in solo practice). Reimbursement by the state health insurance for nonmedical health-related services is possible, as an exception, and often requires bureaucratic procedures.1 Thus, comprehensive care is affected sometimes by a lack of funding but more often by a lack of communication and competition for patients.
Primary Care
Primary care in Germany does not have as clear a structure as it does in other countries, such as the United Kingdom. There are general practitioners and pediatricians in solo practice,
specialists or consultants (such as neurologists and internists) in solo practice, and specialists in hospital outpatient clinics. The latter depend on permits given by health insurance and physicians organizations. Apart from university clinics, these are only given in exceptional cases. Outpatient clinics may offer comprehensive care because professionals other than doctors, who are employed in the affiliated hospital, may be called on for their services (e.g., neuropsychologists or social workers). However, these additional services are not always refunded by the patient’s insurance. There are no clear rules with respect to treatment of specific diseases. Thus, a general practitioner, an internist, or a neurologist might treat a person with epilepsy.
specialists or consultants (such as neurologists and internists) in solo practice, and specialists in hospital outpatient clinics. The latter depend on permits given by health insurance and physicians organizations. Apart from university clinics, these are only given in exceptional cases. Outpatient clinics may offer comprehensive care because professionals other than doctors, who are employed in the affiliated hospital, may be called on for their services (e.g., neuropsychologists or social workers). However, these additional services are not always refunded by the patient’s insurance. There are no clear rules with respect to treatment of specific diseases. Thus, a general practitioner, an internist, or a neurologist might treat a person with epilepsy.
The structure of primary care is negotiated by doctors’ organizations and health insurance providers. Arrangements include the guarantee of medical care in a certain region, guarantee of 24-hour availability, and a basic set of covered services. Physicians prescribe medications, confirm a patient’s inability to work, and refer patients to specialists or hospitals. Medical treatment in regard to necessity, implementation, and correct calculation is scrutinized. Economic efficiency is evaluated by the doctors’ organizations and health insurance providers, as is compensation. Services of physicians are calculated by evaluating every service. Because of the current law that establishes the formula that costs may not increase more than basic wages, physicians working harder get less for their services than before.1
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