Problems Cited in Germany Health Reforms

Germany's Statutory Health Insurance (SHI) Modernisation Act, introduced in January 2004 in the wake of the country's wider economic and welfare reform drive, remains the focus of criticism from all sides of debate.

Although the reforms have been subsequently scaled down in several important areas, initial indications show they have at least had the desired effect of marginally reducing healthcare costs. In early 2004, patient visits to doctors working under the statutory health insurance system fell by 4.6%, and to date reforms are expected to cut annual healthcare expenditure by roughly EUR2.5bn.

However, controversial measures such as the new regime's inclusion of the homeless and long-term inpatients within the requirement to provide out-of-pocket payments of 2% of annual income (or 1% for the chronically ill) have been fiercely opposed. In this case, the government responded with further laws ordering low-cost loans to be made available to finance co-payments in such cases, and reinstating some non-prescription drugs into the SHI benefits package.

Despite significant progress, such as the establishment of a monitoring body along the lines of the UK's National Institute for Clinical Excellence and improved gatekeeping procedures for sick funds, profound reform nevertheless remains threatened by political divisions.

Germany's main political parties are now split over whether to endorse "citizen insurance" for the entire population or a flat-rate insurance subsidy system, with a co-payment of EUR169 currently among the more likely eventual options. However, given Germany's troubled political context, it appears that health reforms are likely to remain dogged by compromises that deliver less than the full measure of benefit.