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How Germany's Universal Health-Care System Works - YouTube
Channel: CNBC
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Seventy percent of Americans
say the U.S.
[2]
health-care system is in a state of
crisis or that it has major
[5]
problems. That's why we're hearing a
lot about Medicare for all,
[9]
including some plans going as far
as banning private health insurance
[12]
companies altogether.
[14]
On page eight of the bill, it
says that we will no longer have
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private insurance as we know it.
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And that means that one hundred
and forty nine million Americans will
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no longer be able to
have their current insurance.
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That's in four years.
[32]
I don't think that's a bold idea.
[34]
I think it's a bad idea.
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Problem. Senator Sanders, with that damn
bill that you wrote and that
[40]
Senator Warren backs, is that it
doesn't trust the American people.
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I trust you to choose what
makes the most sense for you.
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Not my way or the highway.
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One country found a way to
provide universal health care coverage
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while maintaining a competitive insurance
market that offers citizens
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more choices: Germany. Here's
how they did it.
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In 2017, U.S.
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health care spending came
to around $10,200 U.S.
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dollars per capita in Germany.
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It was a little under $6,000.
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Overall, Germany spent about 11.2
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percent of its GDP on
health care, while the U.S.
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spent 17.1
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percent. Germany manages to cover
100 percent of its population.
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In the United States, about 8.8
[83]
percent of the
population remains uninsured.
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That comes to about 28 million
people with even more people
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underinsured. Despite spending less, Germany
has better or comparable
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health outcomes to
the United States.
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Studies show that in Germany, there
were fewer deaths that could have
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been prevented with proper
access to care.
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In 2013, there were 83 avoidable
deaths out of every 100,000 people
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in Germany, while the
United States had 112.
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Life expectancy in Germany is 2.5
[112]
years higher than the United States,
and the infant mortality rate is
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lower in Germany, with 3.3
[117]
deaths per 1,000 live births
as opposed to 5.8
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deaths in the United States.
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Additionally, the maternal mortality rate
in the United States is
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more than 2 times
higher than in Germany.
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So how does Germany manage to
have better health outcomes while
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spending nearly half as much
as the United States?
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Germany is a system that would
look familiar to Americans in that
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everybody buys health insurance from a
private company and then the
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doctors and the hospitals and the
labs are almost all private.
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That's T.R. Reid, author of the
book "The Healing of America."
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He traveled the world exploring different
health care systems and how
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well they worked.
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But it works better in
Germany for a couple reasons.
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One is everybody is covered.
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Everybody is required
to have insurance.
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Everybody's in the system.
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The insurance companies can't turn you
down because you had cancer
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last year or something, they
have to take you.
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They have to cover you.
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Everybody has access to the same
treatment and all the doctors.
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You can go to any doctor without
any limits set by the insurance
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company.
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In Germany, health insurance is
mandatory for all citizens and
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permanent residents.
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There are two different systems that
residents can turn to for
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insurance. SHI, which stands for
statutory health insurance and PHI
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or private health insurance.
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German citizens are eligible for PHI if
they make more than a roughly
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60,000 U.S.
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dollars per year or if
they are self-employed .
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Citizens making under that threshold
must pay into S.H.I.
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S.H.I is made up of a network
of competing, not for profit private
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health insurance funds known
as sickness funds.
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In S.H.I., dependents are covered free
of charge and monthly costs
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are capped around 840
euro per month.
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Even though S.H.I sickness funds
are not government agencies, many
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Germans think of them as part of
a public system because of heavy
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regulation. Keith Tanner helps expats
navigate the German health care
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system and he considers SHI
sickness funds quasi -public
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organizations.
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Basically, they have to
do what they're told.
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They they are told by the government
in what range they can charge.
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They they're told what health procedures
they can fund and they are
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told by the government who they
can accept as clients so they're
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really just carrying out orders.
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They're basically charities.
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They don't exist to make a
profit for investors like American health
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insurance companies. They're there
to keep people healthy.
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That's what they're there for.
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They follow all sorts of
rules that American insurance companies
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wouldn't dream of.
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This system is funded through
compulsory contributions based on a
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percentage of citizens' salaries with
employers sharing the costs.
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There are also built
in safety nets.
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The government will pay into S.H.I.
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on behalf of the
long term unemployed.
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Despite being non-profit organizations,
sickness funds compete for
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customers by offering specific
coverage and perks.
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This competition has changed over the
years as the system has allowed
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citizens more choice.
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As of 2019, there are about
100 statutory health insurance companies,
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but there used to be many more.
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When Germany's system was first
established in the late 1800s,
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sickness funds were linked
to a person's profession.
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It used to be that people were
assigned to a specific sickness fund
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based on their
occupation or region.
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Now Germans can choose where they enroll
and they can change funds on
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a yearly basis.
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As a result, sickness funds begin
marketing themselves in order to
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retain customers and
attract new ones.
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This also led to the funds
merging so they could become more
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competitive. Some of the sickness funds
offer perks that might seem
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similar to credit card rewards.
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You still can get a bonus for going
to the gym and a bonus having a
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checkup. This is in
the public system.
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And if you get a certain number
of bonus points, then you get a
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voucher. But kind of trivial stuff like
200 euros a year or something
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like that. 200 euros a year.
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Nothing which is particularly relevant
to the person who's paying
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their 840 a month.
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As of 2017, roughly 87 percent
of Germans receive their primary
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coverage through S.H.I.
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and 11 percent of
the population through P.H.I.
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The remaining population, such as
soldiers, police officers and
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refugees receive health insurance
through specific government
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programs. All individuals
insured through P.H.I.
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pay a risk related premium with
separate premiums for each dependent.
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These risk based premiums mean that
costs will increase as the
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insured gets older. As a
result, the government regulates P.H.I.
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so people don't become overburdened
by premiums as they age.
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The biggest issue with private health insurance
if you opt out of a
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public system is affordability
in old age.
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If you don't impose these financial
constraints on insurers, then the
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government will be lumbered about a whole
lot of old people who reach
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85, 90, 95.
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It's gonna be totally able to
pay for their health insurance, so
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it'll all fall back
on the government.
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Once someone switches to P.H.I.,
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they can not switch back to S.H.I.
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in the future. But Tanner says
there are ways around that.
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If you're a freelancer in the private
system, you just can't get a
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job paying less than the threshold.
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Any employee earning under about 5000
euro a month is required to
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have public.
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If they own more than
that, they can opt out.
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So if you are a freelancer, you
want to go back into the public
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system for some reason.
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Then you'll get a part time job with
a friend, pays you 500 a month
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for a few months, and then
you react in the public system.
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So there are ways to do it. The
only reason you probably want to do
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that, though, is if you have
lots of children, because children can
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be covered free in the public system,
in the private system, have to
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pay separately for each child.
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Germans can also buy supplemental
private insurance while staying in
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S.H.I.. For example, many Germans
buy supplemental dental insurance.
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The public system pays like for
major dental work, about half the
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cost and then you get supplementary to
take it up to 80, 90 percent
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of the cost.
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Germany's system is not perfect.
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With so many different insurance
companies, there's a lot of
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bureaucracy that contributes
to costs.
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One of the financial things thinking
it's a big system administered
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by more than 100 organizations is
called krankenkassen, each of those
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has a head office and a president
and vice president and a financial
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officer, a whole lot
of unnecessary bureaucracy.
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This may be one of the reasons that
the German system is not as cost
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effective as other
European countries.
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More than 30 percent of both
Germans and Americans felt bureaucracy
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was a major issue
in their country's system.
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Wait times can also be an
issue for people in S.H.I.
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Thirty seven percent of Germans cite wait
times as one of the biggest
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problems within their system, while 22
percent of Americans feel the
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same.
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Generally I think people are quite
happy with the public system.
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It works reasonably well.
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The major issue in big cities
— I'm in Berlin, Munich, Düsseldorf,
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Hamburg. It can take quite a while
to get an appointment with a
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specialist. It is the case that
the doctors prefer private patients
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because they own up to three times
more if they see a private
[554]
patient.
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So what can the United States
learn from the German system?
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Germany has managed to balance
cost controls and universal coverage
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while also maintaining competition.
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And Germans generally
like their system.
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In one survey, not a single German
said they had to wait more than
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four months for an elective surgery,
while four percent of Americans
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said that they had to wait that
long for the same kinds of
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procedures. And only 7 percent of
Germans said they experienced a
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barrier to care because of cost in
the past year compared to 33
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percent of Americans.
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Those citizens really like it.
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They like the fact
that everybody is covered.
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They like the fact that
the costs are totally predictable.
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You know what it's going to cost
you and how much your insurance
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company is going to pay you before
you walk in, unlike the United
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States. They think it's normal that
the insurance company pays every
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claim. They can't believe that insurance
company might deny a claim.
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And they think it's normal that
they get to choose the doctor.
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They don't understand America, where
the insurance company says we
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won't cover a doctor Jones.
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You have to go
to Dr. Smith instead.
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So the main thing I learned in going
around the world is you have to
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make the commitment to provide
health care for everybody.
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That's the destination.
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It turns out there are many
different routes to that destination.
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I found, you know, the Canadian
model, the French model, the British
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model, the German model.
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They all get to this goal
in different ways and different models.
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So I don't care what the model is.
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I think it's important that you
make the commitment to cover
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everybody. And this is something
the world's richest country has
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never done.
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