Fraser Forum

Merkel should stand her ground and protect German health care

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As German Chancellor Angela Merkel’s conservatives face tough negotiations with the Social Democratic Party (SPD) to maintain what has been termed the “grand coalition,” the future of Germany’s health-care system hangs in the balance.

In particular, the SPD advocates for Germany to shift from its current dual public/private health-care system to “one insurance system for all”—presumably similar to Canada’s single-payer system.

This, of course, must be based purely on ideology since the data reveal that Germany has one of the best health-care systems in the world, outperforming Canada’s single-payer system on several important health-care indicators.

For example, in 2015, Germany had significantly more physicians (4.1 per thousand population) than Canada (2.7), three times as many acute-care beds (6.1 vs 2.0 per thousand population) and more than three times as many MRI machines (30.5 vs 9.5 per million population).

In terms of clinical performance and quality, Germany’s system is roughly similar to Canada’s—better on some indicators (30 day in-hospital stroke mortality and obstetric trauma during childbirth), slightly worse on others (30 day in-hospital AMI mortality and five-year breast cancer survival) and comparable on many (five-year cervical and colorectal cancer survival).

Importantly, Germans do not face anything like the long wait times Canadians endure.

For example, in 2016, a survey by the Commonwealth Fund revealed that 30 per cent of patients in Canada waited two months or more for an appointment with a specialist compared with just 3 per cent in Germany. For the next part of the waiting journey, 18 per cent of Canadians reported waiting more than four months or more for elective surgery. No respondents in Germany reported waiting that long.

Germany’s additional health-care resources and shorter wait times compared to Canada appear evermore impressive when you consider the fact that, after adjusting for relevant demographic factors, the two countries spend almost exactly the same proportion of their national income on health care.

In 2015, Germany spent 11.2 per cent of its GDP on health care—slightly more than Canada, which spent 10.3 per cent. However, after adjusting the numbers to account for Canada’s younger population, Germany (at 10.0 per cent of GDP, age-adjusted) actually spends less on health care than Canada (10.6 per cent, age-adjusted) as a share of its economy.

In short, Germany enjoys far more medical resources, comparable quality, markedly shorter wait times and slightly lower spending (given the age of its population). So how does Germany do it?

Simple; by doing the very things the SPD (and Canada) seem to oppose. Although it maintains a strong commitment to universal access for its citizens, Germany not only allows individuals to purchase private insurance (by opting out of the public insurance system, which itself is comprised of several competing not-for-profit insurers), but it also embraces the private system as an important partner.

In fact, although 30 per cent of all hospital beds are in private for-profit hospitals, 99 per cent of all beds in Germany are accessible by patients with public insurance (although their choice of physician may be restricted to the doctor on duty). Germans have also long understood that hospitals must be incentivized to treat patients, and fund them on the basis of activity (thereby granting hospitals a great deal of autonomy) rather than the global budgets that are usually the hallmark of single-payer systems such as Canada’s (although there have recently been some notable changes in certain provinces).

Like all countries, Germany faces challenges within its health-care system. And an aging population and movement away from copayments (which help temper demand) in recent years will likely put increasing strain on financial resources (not to mention the unknown impact of migrants). However, the answer is not to abandon policies that have enabled a robust and competitive universal health-care system that delivers timely quality care to patients at about the same cost as single-payer systems.

Political calculus aside, Chancellor Merkel must stand her ground and protect Germany’s health-care system—not because of any subjective ideological notion, but because it’s what’s good for all patients in Germany.


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