No we are not like Germany under 65. We are more like German's system for those who opt out of the base plan which accounts for about 20% of the population from what I understand.


For those that do not opt out there is a shared risk pool based on region. This shared risk pool means that your insurance company is not in the risk management business as much as the administrative business.


In addition to the risk pool difference we don't use taxation.

 

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Yes, we are LIKE Germany for most people under 65 who are working. It is clear you really don't know how their insurance works. Currently Germans pay about 15% of their paycheck for health insurance, split between the worker and the employer. That's almost exactly equal to what an American worker and his employer pay in social security and medicare taxes. Obviously Germans get the better deal. Most Americans also also pay health insurance premiums ranging from 2 to 10% in pay in addition to the payroll taxes. So what we have here is a private health insurance plan that is funded by payroll withholding, that pays doctors and hospitals directly on a fee for service basis (classic Bismarck model) and is very similar to American style employer based medical insurance. The German's differ in three fundamental ways:

1. First and foremost, the German insurance are NONPROFIT entities; they exist to pay people's medical bills, not to pay dividends to shareholders. Thus they dont have the same incentive that the U.S. insurance industry has to limit the people they cover to to deny claims. In fact the German insurance plans are required to accept all applicants and pay ANY claims submitted by a recognized doctor or hospital. They don't have to pad their premiums to pay for a claims0review bureaucracy or to allow for profit. The result is a sickness fund that has about 1/3 of the administrative expenses that are normal in American health insurance. This makes the German insurance system much cheaper.
2. While insurance is purchased and paid for through payroll deductions, Germans dont lose their coverage when they lose their jobs. Government unemployment benefits automatically cover the insurance premium so the worker as the same insurance coverage while he looks fora new job now matter how long it takes to find ones.
3. Unlike American workers who are restricted to limited selection of insurance plans offered by their employers, Germans can sign up with any sickness fund in the country and can change to a different plan almost anytime they want. They are all required to offer the mandated package of benefits from cradle to nursing home, but there is fierce competition among these nonprofit companies.

Though the sickness funds cover almost all Germans, but not everybody. The richest families are excused from the mandated insurance on the theory they don't need help getting health care. Those who don't join a sickness fund can buy a private coverage from a profit making insurance firm. About 7% of the population chooses this option. Some private hospitals even cater to this segment, offering more luxurious facilities and famous doctors.

To get control of costs, the German Health Ministry has authorized the sickness funds to use a system known as "global budgeting". In essence, this means that the health system agrees to spend a certain amount of money each year and stops paying for care when that budget is reached. Global budgeting is fairly common in health care systems with strong central controls like Britain's National Health Services and the U.S. Department of Veterans Affairs have used it for years. For example the insurance system pays a certain doctor for him/her to see about 700 patients per quarter. Although there are some mechanisms to get around the limit, this means essentially that he/she wont get paid for treating the 701st patient who walks in the door. Often doctors will go on vacation, or do other treatments and services that are not covered by teh basic health insurance plan and receive payments directly from the patients and does not count against the systems global budget.

If you are paying hundreds of times more than someone else, you suffer from a lack of bargaining power. EMTLA isnt driving up your price 700%.


Pricing in healthcare is all screwed up. Some providers offer a sizable discount for cash transactions. My dad was in the hospital many years ago without insurance and was presented with a 5 figure bill, went down to the payment office offered them less than 10% and the hospital agreed. Seems like a really stupid way to run a business.

So Snarf you claim that Germany is like the US then go onto to add to the list of reasons why they are not.


I am not sure you get the idea of how debates are meant to go.


The biggest difference is still the shared risk pools which you don't even mention. Whether they are for profit or not the act of sharing risk pools completely changes the nature of the industry. It is also the reason why your #1 point works. Even if you are nonprofit you have to manage risk in the US system which is a massive factor in the price of the plan. By pooling risk it changes the cost structure significantly.


This act of sharing risk is a major thing that defines a single payer system and the German system has it for a large percentage of their population.

 

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It isn't a direct comparison, it is Bismark model of which there are variations. For those in the U.S. working under 65 use a variation of the Bismark model, just as Germany as a whole uses a variation of the Bismark model. I don't mention shared risk because the texts I have read do not even mention it, so I am not sure how much of a factor it is, if it even exists as you claim at all.

Think of it this way. Imagine selling insurance to someone where you take on all the costs or you sell it to them and throw them into a large risk pool where you pay for their services out of this pool of money. The economic incentives at work in the two scenarios are vastly different. The insurance company in this scenario becomes more of an administrative company who makes sure the bills get paid. It is really not comparable to a US insurance company.


The US can move much closer to this model if they have shared risk pools and fund the plans through a tax model.

 

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Sounds like the National Flood Insurance Program.

I understand what you are talking about with shared risks, but I believe you looking at things from an insurance company with a profit based perspective. I believe there is a reason that shared risks is not mentioned at all in these books I have read such a The Healing of America: A Global Quest For Better, Cheaper, and Fairer Health Care or some of the medical commentaries in the university database I have briefly glanced through. If you can link something or that talks about German sickness funds and shared risks then that would be something, but I have not found anything in the last 10 minutes and have to give up to drive to work.

This single rule effectively pools most of the risk of the fund. They also have rules with regard to the basis of discrimination which either disallow the taking into account other risk factors or attempt to build them into other factors.


IMO the US should just make this a more complete equalization.


The key to all of this is the idea that the fund or the insurance company should be in a position of trying to sell their service to everyone.

 

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