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The last international health care system we covered – Singapore – got a great response from all of you. This week. We head back to Europe. Specifically, we're going to Germany. Their universal health care system is based on the principles of Bismark, which say that the state should provide only for those unable to provide for themselves. It's a private insurance system, and it's the topic of this week's Healthcare Triage.

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[beginning of German National Anthem]

The last international healthcare system we covered -- Singapore -- got a great response from all of you. This week we head back to Europe. Specifically, we're going to Germany. 

Their universal healthcare system is based on the principles of Bismarck, which say that the state should provide only for those unable to provide for themselves. It's a private insurance system. And it's the topic of this week's Healthcare Triage. 

Health insurance is mandatory in Germany. Everyone has to get it. Before 2009, some of the richest people in Germany could choose not to buy insurance, but that's no longer the case.

Insurance is sold only by non-profit private companies. There are more than 130 of them, and they are also known as "sickness funds." 

There's statutory health insurance or SHI or voluntary private health insurance or PHI. PHI covers some of the benefits that SHI doesn't, but most are minor. It also gets you access to some better amenities, and covers some co-pays for others services. 86% of Germans are covered by SHI, and 11% by PHI.

As with other universal systems, the insurance is pretty comprehensive. Coverage includes preventive services, hospitalizations, out-patient visits, prescription drugs, mental health, dental care, eye care, rehab, hospice care, physical therapy, even sick leave is covered.

Long-term care is covered by a different insurance, but that's mandatory, too. There are limits to this, though, and some people buy supplemental private long-term care insurance.

Any employed citizens and pensioners who make less than 52,200 euros a year, and their dependents, are covered by SHI. Anyone who makes more than that, or who is self-employed, can choose to get the SHI or buy PHI. About three quarters of people choose the SHI path.

There used to be no co-pays for SHI, but some were added in 2004. They were about 10 euros for a doctor's visit. But in 2013, most of those were removed again. There are still co-pays, 5 to 10 euros for prescriptions, but lots of drugs are still free, 10 euros a day for hospitalizations, and 5 to 10 euros for medical aids. Deductibles can vary by plan.

There's no cost sharing at all for kids. And a cap on out-of-pocket payments to 2% of household income. That number is 1% if you have a chronic illness. Out-of-pocket spending accounts for just over 13% of all health care spending in Germany, making it slightly less than Canada, comparable to the US, but much more than France.

About 72% of health care spending is public spending, and just over 57% comes from SHI. Employees or pensioners pay an 8.2% tax on the wages up to 47,250 euros. Wages above that are exempt from the tax. Employers contribute an additional 7.3% tax. The contributions are all put together and then spread out amongst the non-profit SHI funds.

If a fund runs low on money, it can charge the members a bit extra. In 2011, 13 of the 156 funds did so to the tune of about 100 to 180 euros a year. 

PHI are considered private health spending. There were 42 of them in 2011. Slightly more than half of them are for-profit. The other slightly less than half are non-profit. The premiums are risk-based entry into the program, meaning that older and sicker people pay more.

Employers make contributions to PHI as they do for SHI, but the employee contribution is higher. PHI is still tightly regulated by the government to protect consumers, though. Laws also encourage competition between the funds.

Doctors belong to regional associations which negotiate contracts with the various sickness funds. Out-patient docs work in private practice, for the most part, with 60% in solo practices, 25% in dual practices, and the rest in group practices.

Mid-level practitioners, like physician assistants, are also employed in most offices. About half of the physicians in SHI programs are family docs, and about half are specialists. Patients can choose any primary care physician, specialist, or hospital that they like. 

There's no real gate-keeping mandate, meaning that people can go to see specialists without first getting the permission of their primary care doctor. Although some funds do offer them, and offer incentives for using those gate-keeping functions, a relatively small number of people do though.

Most docs work in a fee-for-service way based on negotiated rates. There are pre-set maximum numbers a patient for practice, as well as reimbursement points per patient. This means that there are limits on the number of patients and the number of treatments for which a doc can be paid each year. If a doctor goes over, they may not be paid.

About half of all hospital beds are in non-profit public hospitals. An additional third are in private non-profit hands. The rest are for-profit, and that percentage has been growing.

Most hospitals salary doctors, who don't also work in out-patient setting. The federal joint committee decides what to cover and how to define quality. The institute for applied quality improvement and research in health care is responsible for quality assurance. Hospitals are mandated to report on 27 indicators, so that they can be publicly compared.

The country tries to control cost in a number of ways. There are a number of voluntary insurance schemes to do better disease management. Germany uses reference pricing with respect to drugs to try to get citizens to choose cheaper options.

Basically that means that the insurance will pay the amount of a cheapest drug in a class, and if patients want a more expensive one, they have to pay the difference themselves. A lot of research goes into deciding which drugs are most cost-effective.

Finally, regional budgets are used to hold down spending. For instance, if a doctor goes over what's expected for prescriptions for their patients, they are held financially liable.

In 2011, Germany spent $4495 per capita on health care, or about 11.3% of GDP. That puts it on par with France. It's expensive, except for the US which is insane at $8508 per capita and 17.7% of GDP.

But unlike some other countries, Germans have great access. More than three-quarters of Germans are able to get same-day or next-day appointments with their doctor, putting them at or near the top of the developed world. 

Quality is generally good. Life expectancy at birth is 81 years, making them 24th in the world. That's behind Singapore at 84, Canada at 82.5, and France at 82.3, but ahead of the UK at 81 and the US at 79.8. In infant mortality, it beats most if not all of those countries.

Germany has an above-average number of physicians and nurses. They have a below-average number of CT and MRI scanners. Their preventable mortality rates are well below OECD average. A 2012 study found that Germany outperforms the United States and sometimes the UK in preventing debt. It loses to France, though.

Downsides? Because doctors are spread out so much, there can be gaps in knowledge in what patients have or what's been done. Surprisingly for Germans, it's somewhat inefficient. The pfeiffer service model encourages more care, which some think goes too far. And some doctors hate the system which can penalize them for doing too much.

Germans worry that differences in position salaries may lead to a primary care shortage in the future. Self-employed people also pay a lot for care since they're responsible both for the employer and employee contribution. 

Finally, some claim that systems that employ tiers of coverage, specifically the SHI and the PHI, often lead the wealthy doing much better than the not-wealthy. But it's worth noting that the vast majority of people chose the SHI option. 

What keeps the public and the private option so close in terms of quality cost and benefits? Likely it's the German government, and there's a lot to be said for it.