Taking a Look at the German Prescription

Article excerpt

Summary: As Hillary Rodham Clinton devises a health care "reformation" her task force is looking to the systems of other nations for ideas. Of particular interest is Germany, where universal, efficient care is provided at relatively low cost. But Germany's answers might not be adaptable here.

It is a hugely ambitious task -- and judging by the day-to-day account of Hillary Rodham Clinton's activities, one that's getting more ambitious by the hour. Mrs. Clinton wants not just to plug the holes in the American health care system and provide insurance for the millions who don't have it. She wants a complete restructuring (or |reformation;' to borrow from her "politics of meaning" vocabulary) of the way patients, doctors and insurance companies interact, so that Medicare and Medicaid, federal health insurance, worker's compensation, mental health care, dental care and long-term care will all eventually be folded into one system.

At the same time, she wants to contain the costs of health care -- if not immediately, then in the long run. Skeptics doubt that such a cure-all is possible, or indeed desirable, but Mrs. Clinton and her closed-door task force are forging ahead -- and they have been looking to other countries with national health care systems for clues.

Among those countries is Germany, which has found a way to provide wide and comprehensive health care while avoiding the kind of "socialized medicine" found in Britain or Sweden, where centralized, government-run systems are marked by long lines and painfully slow service. Germany has preserved its private insurance industry, and, as in the American system, most people are insured through their employers. At the same time, however, the system is heavily regulated, something that clearly appeals to the Clinton administration, since government is given the role of referee between provider and clients.

The German system also provides much of what Americans demand: free choice of personal physician and access to well-equipped hospitals. What's more, it manages to do so for everybody in the country, at considerably lower cost than in the United States, where 14 percent of the gross national product was spent on health care last year. In contrast, the Germans spent 8 percent. This translates into $2,566 per person in the United States, compared with $1,287 in Germany. Yet, despite the higher cost in the US., 35 million people do not have health insurance, according to estimates by the Clinton administration.

Another aspect of the German system that appeals to Clinton is its egalitarian approach. According to Uwe E. Reinhardt, an economics professor at Princeton University, the philosophy underlying the German health care system is one of solidarity, with rich and poor sharing the same system and nobody being allowed to fall through the cracks. The goal is to provide care for everybody, irrespective of income or social status, at a price the country can afford.

The origins of the German system date back to Otto von Bismarck, the first German chancellor, who more than a century ago set up a system of social provision to promote political stability and to serve as a bulwark against socialism. Together with pensions and accident and unemployment insurance, statutory health insurance today is one of the four pillars of the German social security system. It consists of about 1,300 Krankenkassen, or sickness funds, which are like insurance companies -- self-financing and self-governing but publicly regulated. The funds are set up along regional, company or professional lines.

Almost 90 percent of the population is covered by statutory health insurance and pays what is in effect a payroll tax to the Krankenkasse -- a percentage of wages varying from 8 to 16 percent, of which the employer pays half. The remainder of the population -- civil servants, the wealthy and the self-employed -- is outside this system. They typically have their own insurance system; for civil servants, the government reimburses about 60 percent of medical expenses and the individual covers the rest through private insurance. …