Bismarck’s Health Insurance Act of 1883 established the first social health insurance system in the world. The German statutory health insurance system was built on the defining principles of solidarity and self-governance, and these principles have remained at the core of its continuous development for 135 years. A gradual expansion of population and benefits coverage has led to what is, in 2017, universal health coverage with a generous benefits package.
Selfgovernance was initially applied mainly to the payers (the sickness funds) but was extended in 1913 to cover relations between sickness funds and doctors, which in turn led to the right for insured individuals to freely choose their healthcare providers. In 1993, the freedom to choose one’s sickness fund was formally introduced, and reforms that encourage competition and a strengthened market orientation have gradually gained importance in the past 25 years; these reforms were designed and implemented to protect the principles of solidarity and self-governance.
In 2004, self-governance was strengthened through the establishment of the Federal Joint Committee, a major payer–provider structure given the task of defining uniform rules for access to and distribution of health care, benefits coverage, coordination of care across sectors, quality, and efficiency. Under the oversight of the Federal Joint Committee, payer and provider associations have ensured good access to high-quality health care without substantial shortages or waiting times.
Self-governance has, however, led to an oversupply of pharmaceutical products, an excess in the number of inpatient cases and hospital stays, and problems with delivering continuity of care across sectoral boundaries. The German health insurance system is not as cost-effective as in some of Germany’s neighbouring countries, which, given present expenditure levels, indicates a need to improve efficiency and value for patients.
Introduction
The German statutory health insurance system is recognised 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.1,2 The Bismarck model is often compared with the Beveridge health system, which underlies a tax-financed national health service, and with health systems that are based on market principles.3,4 This highly stylised differentiation persists even though health systems worldwide have evolved by incorporating elements of each of the three models to meet new challenges, such as an ageing population, new diagnostic and therapeutic technologies, and doubts about quality and costeffectiveness, and to accommodate the advent of new instruments, such as health-technology assessment and diagnosis-related groups.
The G20 summit hosted by Germany in July, 2017, and the approaching 135th anniversary of the German statutory health insurance in 2018 provide impetus for taking stock of Germany’s health insurance system and its development, trends, performance, and opportunities for change. In this Series paper, we describe how the German health insurance system expanded both the population coverage and the benefits package while keeping costsharing low, and we explain how the characteristics of the German statutory health insurance were modified to achieve this.
We review developments since 1993, with empirical analysis of data to assess the performance. We look at the statutory health insurance system through the prism of its 135 year history, recognising its remarkable resilience: it survived, with key principles intact, different forms of government (an empire, republics, and dictatorships), two world wars, hyperinflation, and the division and subsequent reunification of Germany.
We describe the delegated regulation of the health insurance system through self-governance, both within and between associations of providers and payers. Selfgovernance is particularly difficult to appreciate because, on the one hand, payers and providers are jointly mandated to ensure equal access to and provision of health services, contain costs, and maintain quality; on the other hand, the same actors are increasingly facing a regulated environment in which they compete for patients and insured individuals (figure 1). Finally, we highlight the specificities of the statutory health insurance’s service provision structure and its separation into two large sectors, one for ambulatory care and one for inpatient care—a side-effect of self-governance that is increasingly seen as the root of problems with care coordination and continuity, although this separation is also seen as an asset in terms of access.
