Health system at the limit: Who will save health care in Germany?

In a current analysis of the financing of the German healthcare system, health economist Prof. Dr. Thomas Kolb examines the challenges and necessary reforms of statutory health insurance (GKV). According to Kolb, statutory health insurance spending for 2024 will amount to around 327 billion euros, with a third of this spending going to inpatient care. Another third is spent on outpatient medical services and prescribed medicines. Total health expenditure, including private health insurance (PKV) and personal contributions, is around 500 billion euros annually, which corresponds to 13% of gross domestic product. Kolb also discussed the need to keep an eye on social security contributions in order not to burden future wage costs.

As part of his remarks, Kolb recommended, among other things, the integration of private health insurance into the statutory health insurance and the inclusion of other types of income in the assessment basis for health insurance contributions. A partial change in the free co-insurance of family members should also be considered. A proposed primary care physician system could contribute to better patient management and more transparency in the system. Higher co-payments were viewed as a means of creating transparency, but the introduction of a patient receipt failed due to a lack of interest on the part of the insured. Kolb was also critical of excessive bureaucratic documentation requirements.

Health system financing and spending

The financing structure of the GKV shows that in 2022 around 53% of health expenditure went to statutory health insurance. The social insurance providers covered over two thirds of the expenses, while private health insurance only accounted for 7.7%. The GKV itself recorded expenditure of almost 289 billion euros in 2022, with the largest service expenditure being in the areas of hospital treatment (32.1%), pharmaceutical supply (17.8%) and outpatient medical treatment (16.8%). The GKV is financed by equal contributions from insured persons and employers, with a general contribution rate of 14.6% of gross employment income and an average additional contribution of 1.7% in 2024.

In addition, there has been a federal subsidy for statutory health insurance since 2004, which was set at 14.5 billion euros per year in 2017. Additional payments for GKV services amount to 10% of the costs, ranging from a minimum of 5 euros to a maximum of 10 euros per service. In 2022, 276,000 insured people were exempt from additional payments, including 4.38 million chronically ill people. While private health insurance (PKV) is based on individual risk factors, its premiums increase with age, regardless of income level. Political controversies surrounding the GKV and PKV primarily revolve around subjective justice deficits, while proposals for citizens' insurance to remedy these injustices are being discussed.