Last fall, Sam, an American woman who lives in Berlin, began to experience stomach pain while eating and drinking. She visited her general practitioner, who wrote her a prescription.
The problem hadn't gone away several days later, so the doctor referred her to a specialist for a gastroscopy. Her issue wasn’t deemed an emergency, though, so she had to wait about two weeks for an appointment.
“But man, was I impressed with the exam itself!” she later told me in an email. “Went to the hospital, filled out a few papers, was knocked out for a bit while they looked in my stomach, and was home again a few hours later. Everything was very efficient.”
The best part: Sam paid exactly nothing for the experience.
Instead, the bill was paid by the Barmer GEK sickness fund, one of about 160 such nonprofit insurance collectives in the country. Every German resident must belong to a sickness fund, and in turn the funds must insure all comers.
They’re also mandated to cover a standard set of benefits, which includes most procedures and medications. Workers pay half the cost of their sickness fund insurance, and employers pay the rest. The German government foots the bill for the unemployed and for children. There are also limits on out-of-pocket expenses, so it’s rare for a German to go into debt because of medical bills.
It should, since this is very similar to the health-insurance regime that Americans are now living under, now that the Affordable Care Act is four years old and a few days past its first enrollment deadline.
All Americans are now required to have health insurance or to pay a fine, and insurers cannot deny coverage to anyone, regardless of pre-existing conditions. Obamacare has also created subsidies for those who can’t afford to buy health insurance and has implemented limits on out-of-pocket costs.
There are, of course, a few key differences. Co-pays in the German system are minuscule, about 10 euros per visit. Even those for hospital stays are laughably small by American standards: Sam payed 40 euro for a three-day stay for a minor operation a few years ago. Included in that price was the cost of renting the TV remote.
And nearly five million Americans fall into what’s called the “Medicaid gap” in states that aren’t expanding the government health insurance program for the poor. These individuals make too much to qualify for the state’s existing Medicaid program (typically just a few thousand dollars a year for childless adults), yet too little to qualify for the federal government’s subsidies to buy health insurance on the new exchanges, so they will remain uninsured. In Germany, employees' premiums are a percentage of their incomes, so low-wage workers simply pay rock-bottom insurance rates.
The sickness funds are Germany's version of a “public” health insurance system, and it covers nearly everyone. But a small segment (13 percent) of the population, generally the very wealthy, can opt-out and instead go with the private Krankenversicherung, which follows rules more similar the pre-Obamacare U.S. individual insurance market.
But those differences aside, it’s fair to say the U.S. is moving in the direction of systems like Germany’s—multi-payer, compulsory, employer-based, highly regulated, and fee-for-service.
You can think of this setup as the Goldilocks option among all of the possible ways governments can insure health. It's not as radical as single-payer models like the U.K.’s, where the government covers everyone. And it's also not as brutal as the less-regulated version of the insurance market we had before the ACA.
“I think you’re moving more in the direction of international standards,” Dirk Göpffarth, head of risk adjustment at the German Federal Social Insurance Office, told me. “The U.S. was always the odd one out with not regulating healthcare until everyone goes into Medicare.”
Germany actually pioneered this type of insurance—it all started when Otto von Bismarck signed his Health Insurance Bill of 1883 into law. (It’s still known as the “Bismarck model” because of his legacy, and other parts of Europe and Asia have adopted it over the years.)
But that’s not to say that the Bismarck model is without its problems. In fact, Germany shares many healthcare woes with the U.S., and it’s tried some intriguing solutions that Americans might look to, as well.
So, with our healthcare system looking decidedly more German, here’s what we have to look forward to.
All things considered, it’s good to be a sick German. There are no network limitations, so people can see any doctor they want. There are no deductibles, so Germans have no fear of spending hundreds before their insurance ever kicks in.
There’s also no money that changes hands during a medical appointment. Patients show their insurance card at the doctor’s office, and the doctors' association pays the doctor using money from the sickness funds. "You don’t have to sit at home and sort through invoices or wonder if you overlooked fine print,” Sophia Schlette, a public health expert and a former senior advisor at Berlin’s National Statutory Health Insurance Physicians Association, told me. That insurance card, by the way, is good for hospital visits anywhere in Europe.
Germany is in the middle of the pack among developed countries when it comes to healthcare spending per capita, according to a report released by the Commonwealth Fund last fall.
But of all of the countries studied, Germans were the most likely to be able to get a same-day or next-day appointment and to hear back from a doctor quickly if they had a question. They rarely use emergency rooms, and they can access doctors after-hours with ease.
And Germany manages to put its health-care dollars to relatively good use: For each $100 it spends on healthcare, it extends life by about four months, according to a recent analysis in the American Journal of Public Health. In the U.S., one of the worst-performing nations in the ranking, each $100 spent on healthcare resulted in only a couple of extra weeks of longevity.
Then, of course, there are the drawbacks. Since there are no provider networks in Germany, doctors don’t know what other providers patients have seen, so there are few ways to limit repeat procedures. In fact, Germany is facing quantity-control issues similar to America’s, but the U.S. is more of a vanguard in attempting to limit waste. The ACA created Accountable Care Organizations, voluntary groups of doctors and nurses that can share in the savings if they manage to treat Medicare patients more efficiently.
The German government is similarly trying to push more people into “family physician” programs, in which just one doctor would serve as a gatekeeper. But that’s an idea the Germans borrowed from the American HMO model of the 1980s.