Medical Care That is Of, For, and By the People
The German system of health insurance is fascinating. Health insurance is mandatory. As in the United States, employers play a prominent role in funding health care. Eighty-eight percent of Germans get their health insurance through statutory health insurance funds which are self-governed. Self-government is exercised on an nonsalaried basis by elected representatives of the insured and of the employers. These funds are financed by 15% of the salary of each employee with half coming from the worker and half from the employer. The people pay the bill and they run the insurance company. The insurance premium is 15% of salary whether the employee makes 30,000 a year or 60,000 a year. Germans can choose from 105 statutory health funds, and they have their choice of doctors and hospitals. Small co-payments apply to inpatient services and drugs, and statutory health insurance (SHI) funds offer a range of deductibles. Germans earning over $68,000 can choose private health insurance instead. There are no government subsidies for private insurance.
The American system is of, for and by large insurance companies. The reason is so simple. I recently heard a health care attorney speak on the topic. She said, “the fiduciary responsibility of large American health insurance companies is not to consumers; it is to the stockholders.” During the pandemic, when the rest of the healthcare system was financially strapped, the large insurance companies were making huge profits. They fulfill their fiduciary duty to stockholders exceedingly well. That is why there is no patient-centered care in the United States. This is why healthcare consumes almost 18% of gross domestic product in the United States and 12% in Germany. Our system is not designed to produce better health at lower costs. It does not serve patients well. It serves stockholders exceedingly well.
Our current system will not change. It will not get better. We have tried stockholder medicine and it does not work. The core German model with insurance run by employees and employers is very promising. If we start talking about changing our system, the big insurance companies will use their money, power, and influence in congress to scream that the “sky is falling, and the radical left wants socialized medicine.” We can have medicine of, for, and by the people, but it won’t just happen. You must fight for it. Moving to something like the German system should not be a political issue. It is a human issue.
This is fascinating. Thank you for putting it out there. I think if more ppl knew what health care was like in other countries, perhaps there'd be more of a push to improve it here in the US.
We need disruptive innovation, preferably from a privately held for-profit B Corporation, outcomes-accountable nonprofit, or pioneering public sector enterprise bringing lessons learned from an adjacent social-benefit sector. I am concerned that our democratic system has been compromised by lobbying dollars, etc., so the will of the people is unlikely to prevail unless the people vote for disruptive healthcare breakthroughs, best practices, and benchmarks with cold hard cash. Kudos to you, Bill, for making the issues more transparent for those who don't yet have your vantage point.