The Federal Republic of Germany is composed of sixteen states, the so-called Bundesländer or Länder. Germany has one of the highest population densities within the European Union. The proportion of physicians in the population is around 3.4 per 1,000 inhabitants. Germany has one of the best and quality based health care services in world. It has the highly decentralized and self-governing system run by different players. German statutory health system is recognized as one of the prototypes of modern health system configurations. Since its introduction in 1883 by the German Chancellor Otto von Bismarck, the guiding principle of the German health system has been solidarity among the insured. Solidarity manifests itself both on the income side and the provision side of statutory health insurance: all insured persons, irrespective of health risk, contribute a percentage of their income, and these contributions entitle the individuals to benefits according to health needs— irrespective of their socioeconomic situation, ability to pay, or geographical location. In this pooled-risk system, people with high income support people with low income, young people support elderly people, healthy people support people who are sick, and people without children support people with children. Currently services offered by the statutory health insurance include promotion of health, prevention of disease, early diagnosis of disease, treatment of disease, and right for funeral benefits. The key elements of this social insurance system are (I) nonprofit sickness funds that insure about 90% of the population and (2) regional associations of physicians (Kassenarztliche Vereinigung) that provide patient care for fees negotiated with the sickness funds.(Simon 2016)
The German health care system is divided into three main areas: outpatient care, inpatient care (the hospital sector), and rehabilitation facilities.
In Germany, outpatient care is mainly provided by self-employed doctors, dentists, psychotherapists and other health care professionals in their own practices. Most doctors and dentists have a “Kassenzulassung” (statutory health insurance accreditation), enabling them to treat anyone with statutory health insurance.
Most hospitals in Germany treat all patients regardless of whether they have statutory or private health insurance. Large hospitals usually have public backing, in other words they are financed by the state or municipality. Charity-run or church-run hospitals are operated by organizations like the Red Cross or religious groups. There are also many privately-run hospitals, some of which will only see patients who are privately insured. These hospitals are typically smaller and more likely to be specialized.
Rehabilitation facilities provide treatments that help people to regain independence and improve their performance after getting over a serious illness and recovering from intensive therapy. These treatments include physiotherapy, psychological care and help learning how to use medical aids and appliances. This is often done immediately after a hospital stay, for instance following surgery. There are also rehabilitation facilities for people with mental illnesses and addictions.
Healthcare Organizations in Germany
While talking about the healthcare organizations, The Federal Ministry of Health (Bundesministerium für Gesundheit – BMG) is responsible for policy-making at the federal level. It is their task to develop laws and draw up administrative guidelines that establish the framework of the self-governing activities within the health care system.
Federal Ministry of Health (“Bundesministerium für Gesundheit”, BMG):- The BMG is primarily a regulatory and supervisory authority. It does not employ curative care doctors nor does it own hospitals. The spheres of activities are (i) health (ii) prevention, and (iii) long-term care. The safeguarding and further development of the SHI is a core task. In addition, the BMG is responsible for international and European health policy.
State Ministries of Health :- The Ministries of Health in the 16 Federal States are primarily concerned with the provision of health care, especially hospital planning; they manage disease registries and are active in prevention and management of infection outbreaks. All state ministries are members of the “Gesundheitsministerkonferenz der Länder” (Conference of Health Ministers, a forum for addressing technical and political issues).
Public Health Service (“Öffentlicher Gesundheitsdienst”, ÖGD):- The ÖGD refers to the German public health services, including the so called “Gesundheitsämter” (public health departments). The “Gesundheitsamt” is a local public health service. Each department is directed by a so-called public health officer. Public health departments are responsible for hygiene, monitoring of institutions (hospitals, retirement homes, kindergartens, schools, campsites etc.) They provide various kinds of counseling services (social, pregnancy, dietary, etc.) and monitor narcotic use.
When it comes to matters concerning statutory health insurance, the Federal Joint Committee is the highest decision-making body within the self-governing health care system. It includes members representing doctors, dentists, psychotherapists, the statutory insurers, hospitals and patients. As the central entity of federal-level self-governance, the Federal Joint Committee makes decisions concerning which medical services will be covered by the statutory insurers and what form that coverage will take. Statutory health insurance (gesetzliche Krankenversicherung, GKV) is based on the principle of solidarity, so people who earn more money pay more than those who earn less, and healthy and ill people pay the same amount. In this way, if people get ill, the costs of their medical care and loss of earnings are shared by everyone with that insurance. The health insurance premium is the same across all statutory insurers – 14.6% of your gross income, but only up to a certain income level (Beitragsbemessungsgrenze). The employer and insured employee share the costs equally, paying 7.3% each. Insurers may charge extra fees if their insurance premiums and other funding sources are not enough to cover their costs.
In Germany, there are currently (2011) around 2000 hospitals. These hospitals are held in roughly equal proportion by public entities, independent not-for-profit organizations and for-profit companies. Publicly owned hospitals are owned by municipalities, states or the federal government. The federal government only operates military hospitals, the states primarily own the university hospitals and mental health institutions. The municipalities are frequently the owner of the local general hospital in order to ensure the provision of health care in their districts. Independent not-for-profit hospitals are generally owned by charitable organizations including churches. The for-profit hospitals in Germany are largely comprised of hospital chains, with Asklepios, Sana, Helios und Rhoen being the dominate chains.
The funding for the hospitals is derived from two sources: the reimbursement of the operating costs and the investment costs. The operating costs have to be recouped mainly through lump-sum reimbursements per case (DRG), which in many cases is no longer particularly lucrative. As a result, some hospitals generate more profit from their ancillary operations than the treatment of patients. Public funding for investments is in principle available to any hospital which is included in the official hospital plan. (Obermann, Müller, Müller, Schmidt, Glazinski-2015 p:-240)
As in the case of hospitals, rehabilitation clinics can be operated by governmental, not-for-profit or for-profit organizations. For-profit companies dominate this sector. About 56 percent of the roughly 1 240 rehabilitation clinics are held by private owners, 26% by independent charitable organizations and 18 percent by public entities. In contrast to hospitals, rehabilitation clinics do not typically receive public grants and are therefore particularly exposed to competitive pressures. In order to save costs, the responsible payer generally prefers the rehabilitative care to be prescribed on an outpatient basis in the primary sector. Nonetheless, given the aging population, the long-term prospects for rehabilitation clinics are favorable. At present, rehabilitation clinics are increasingly providing the post-operative care following the hospital discharge. This is a result of the introduction of the diagnosis related groups and the incentive of the hospitals to discharge their patients as soon as possible. (Obermann, Müller, Müller, Schmidt, Glazinski-2015 p:-240)