The basic principles of the health care system

The health care system in Germany is based on four basic principles:

• Compulsory insurance: Everyone must have statutory health insurance ("gesetzliche Krankenversicherung" – GKV) provided that their gross earnings are under a fixed limit ("Versicherungspflichtgrenze"). Anyone who earns more than that can choose to have private insurance ("private Krankenversicherung" – PKV).
• Funding through insurance premiums: Health care is financed mostly from the premiums paid by insured employees and their employers. Tax revenue surpluses also contribute. To give you an idea of what this means: State-funded health care systems like those in Great Britain or Sweden draw on tax revenue. In market-oriented systems such as that in the United States, many people have to carry the costs of treatment and loss of earnings due to illness themselves, or have to get private health insurance.
• Principle of solidarity: In the German health care system, statutory health insurance members jointly carry the individual risks of the costs of medical care in the event of illness. Everyone covered by statutory insurance has an equal right to medical care and continued payment of wages when ill – regardless of their income and premium level. The premiums are based on income. This means that the rich can help the poor, and the healthy can help the ill. However, these premiums are only calculated based on a percentage scale up to a certain income level ("Beitragsbemessungsgrenze"). Anyone earning more than this amount pays the same maximum premium.
• Principle of self-governance: While the German state sets the conditions for medical care, the further organization and financing of individual medical services is the responsibility of the self-governing bodies within the health care system. These are made up of members representing doctors and dentists, psychotherapists, hospitals, insurers and the insured people. The Federal Joint Committee ("Gemeinsamer Bundesausschuss" or G-BA – please also see below: “Structure and institutions of the health care system”) is the highest entity of self-governance within the statutory health insurance system.

A bit of history: The five branches of social welfare

The beginnings of the German health care system can be traced back to the Middle Ages, when craftsmen were members of guilds. The guilds provided an early form of health insurance based on the principle of solidarity: All guild members paid into a fund which was then used to help individual members if they had financial difficulties, for instance because of an illness. There were also insurance funds organized for factory workers as early as the beginning of the industrial revolution. These different forms of social insurance were then standardized through Otto von Bismarck’s social policies in the late nineteenth century. Health insurance was introduced first, in 1883. Its primary goal was to provide insurance in the event of illness, mainly for workers involved in both industrial and non-industrial production.

Anyone who was insured was granted the right to free medical treatment and medicine, as well as sickness benefits and a funeral allowance. At that time, about 10 percent of the population had health insurance – compared to nearly 100 percent in Germany now.

The introduction of health insurance in 1883 was closely followed by the introduction of statutory accident insurance (1884) and pension funds (1889). Unemployment insurance was introduced in 1927.

Accident insurance covers things like medical services needed for work-related accidents or illnesses, and includes payments in the event of work-related disability or death. Accident insurance is also compulsory for employees, but it is funded solely by employers.

Statutory pension funds are funded in equal parts by employees and employers. These funds are used to pay retirement pensions, disability pensions and rehabilitation costs for employees.

Long-term care insurance – the fifth branch of the social insurance system – was not introduced until 1995. It covers part of the costs for nursing care and assistance if these services are needed.

The legal basis of these five branches can be found in the German Social Code ("Sozialgesetzbücher").

Structure and institutions of the health care system

The Federal Ministry of Health ("Bundesministerium für Gesundheit" – BMG) is responsible for policy-making at the federal level. Its tasks include developing laws and drawing up administrative guidelines for the self-governing activities within the health care system. The Ministry of Health directs a number of institutions and agencies responsible for dealing with higher-level issues of public health, such as the Federal Institute for Drugs and Medical Devices ("Bundesinstitut für Arzneimittel und Medizinprodukte" – BfArM) and the Paul Ehrlich Institute (PEI). The Federal Institute for Drugs and Medical Devices makes decisions concerning the approval of pharmaceuticals. The Paul Ehrlich Institute is responsible for approving vaccines.

When it comes to matters concerning statutory health insurance, the Federal Joint Committee (G-BA) is the highest decision-making body within the self-governing health care system. It includes members representing doctors, dentists, psychotherapists, the statutory insurers, hospitals and patients. As the central entity of federal-level self-governance, the Federal Joint Committee makes decisions concerning which medical services will be covered by the statutory insurers and what form that coverage will take.

The Federal Joint Committee is also responsible for health care quality assurance. It is supported in this role by – among others – the Institute for Quality and Efficiency in Health Care ("Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen" – IQWiG), the publisher of this website. The Institute assesses the benefits and risks associated with treatments and diagnostic procedures. It does so by analyzing the available scientific data on selected topics. The results are then to be taken into consideration when making decisions concerning health care. It is possible to ask questions about medical research on the IQWiG platform "ThemenCheck Medizin" (available in German).

Important health care providers, institutions and associations include the following:

• Health insurers: Statutory health insurers are required to provide health insurance and ensure that they receive medical care is received. This is done through contracts with many different institutions and organizations, including the associations of statutory insurance physicians and dentists, as well as physician, hospital and pharmacy associations. The National Association of Statutory Health Insurance Funds ("GKV-Spitzenverband") is the federal-level association of all statutory insurers. Its activities are governed by law and it represents the interests of the different insurers. Private health insurers offer their members full, partial or add-on coverage. They are represented by the Association of Private Insurers ("PKV-Verband").
• Associations of statutory insurance physicians and dentists: All doctors and psychological (non-medical) psychotherapists who bill services to statutory insurers belong to associations of statutory insurance physicians ("Kassenärztliche Vereinigungen" – KV), while dentists are represented by the associations of statutory insurance dentists ("Kassenzahnärztliche Vereinigungen" – KZV). The corresponding federal-level bodies are the Federal Association of Statutory Insurance Physicians ("Kassenärztliche Bundesvereinigung" - KBV) and the Federal Association of Statutory Insurance Dentists ("Kassenzahnärztliche Bundesvereinigung" - KZBV). The scope of these associations’ activities is defined by law.
• Hospital federation: The German Hospital Federation ("Deutsche Krankenhausgesellschaft" – DKG) represents the central and regional associations of the various bodies running the hospitals, such as cities and municipalities, religious organizations, not-for-profit associations and other private sponsors.
• Physician, dentist, psychotherapist and pharmacist chambers: At the individual federal state (Bundesland) level, all doctors, dentists, psychotherapists and pharmacists must be members of their respective state chamber. These chambers are responsible for things like supervising the professional obligations of the members and ensuring compliance with the Radiation Protection Ordinance. They also oversee the professional certification and the medical board examinations, and assess and resolve malpractice claims. The state chambers also have corresponding chambers at the federal level.
• Public Health Service ("Öffentlicher Gesundheitsdienst" – ÖGD): The Public Health Service has the responsibility of protecting people from health risks. Regional health departments regulate hygiene in communal buildings, protection against infections, and generally promote good health. They also offer counseling and help, for instance for people with psychosocial problems.
• Pharmacy associations: Pharmacies are responsible for supplying medication, as well as providing information and advice about the medication. To secure the availability of the medicines, the pharmacy associations sign agreements with the National Association of Statutory Health Insurance Funds ("GKV-Spitzenverband") and the insurers.
• Other health care professionals: Last but not least, there are many different health care professionals who aren't doctors, including physiotherapists, speech therapists, nurses and midwives. If they provide services that are covered by statutory health insurers, their respective associations also sign agreements with the Central Federal Association of Health Insurance Funds ("GKV-Spitzenverband") and the insurers.
• Patient organizations and self-help groups: Many people have come together to form patient organizations and self-help groups that provide patients with support and advice. In addition, various patient organizations represent the interests of patients when it comes to issues related to health care policy.

Outpatient care

In Germany, outpatient care (ambulante Versorgung) is mainly provided by self-employed doctors, dentists, psychotherapists and other health care professionals in their own practices. Most doctors and dentists have a “Kassenzulassung” (statutory health insurance accreditation), enabling them to treat anyone with statutory health insurance.

When people are ill or have other health problems, they usually go to see their family doctor (Hausarzt) first. In Germany, general practitioners, internists and pediatricians are considered to be family doctors. These doctors can refer you to the right kind of specialist – like a skin specialist (dermatologist) or women's health specialist (gynecologist) – for particular medical problems. It is also possible to go straight to specialists without a referral.

As well as being members of their respective statutory insurance physicians' or dentists' association, family doctors, specialists and dentists also have their own organizations representing their own particular professional interests.

Besides the individual practices, there are many joint practices and medical care centers in Germany with two or more doctors or other health care professionals working together. Larger joint practices can often offer services that are usually only available in hospitals, like special diagnostic examinations or day surgery. Because of this, these practices are sometimes referred to as "Praxiskliniken" ("practice hospitals").

Outpatient care also includes medical care received in the hospital or at a psychiatric institution which does not involve an overnight stay.

Inpatient care

Most hospitals in Germany treat all patients, regardless of whether they have statutory or private health insurance. Large hospitals usually have public backing, in other words they are financed by the state or municipality. Charity-run or church-run hospitals are operated by organizations like the Red Cross or religious groups. There are also many privately-run hospitals, some of which will only treat patients who are privately insured. These hospitals are typically smaller and more likely to be specialized.

If you have to stay overnight in a hospital for treatment, it is referred to as “inpatient treatment” (stationäre Behandlung). Additional fees are charged for accommodation and meals that are not covered by statutory insurers. These fees are stipulated in a “contract” between the patient and the hospital before the treatment is carried out.

In addition to inpatient treatment in hospitals, there is also inpatient medical rehabilitation. Rehabilitation facilities provide treatments that help people to regain independence and improve their fitness after getting over a serious illness and recovering from intensive treatment. These treatments include physiotherapy, psychological care and help learning how to use medical aids and appliances. This is often done immediately after a hospital stay, for instance following surgery. There are also rehabilitation facilities for people with mental illnesses and addictions.

Sources

• Bundesministerium für Gesundheit (BMG). Migration und Gesundheit. 2018.
• Bundesministerium für Gesundheit (BMG). Ratgeber Krankenversicherung. August 2017.
• Bundesministerium für Gesundheit (BMG). Schaubild "Das Gesundheitssystem" - der Staat setzt den Rahmen. August 2015.
• Bundeszentrale für politische Bildung (bpb). Dossier Gesundheitspolitik. Das Gesundheitswesen in Deutschland. Ein Überblick. March 01, 2012.
• Busse R, Blümel M, Ognyanova D. Das deutsche Gesundheitssystem: Akteure, Daten, Analysen. Berlin: Medizinisch Wissenschaftliche Verlagsgesellschaft; 2013.
• Klemperer D. Sozialmedizin – Public Health – Gesundheitswissenschaften. Bern: Huber; 2014.
• Obermann K, Müller P, Müller HH, Schmidt B, Glazinski B. The German Health Care System. A concise overview. 2013.

• IQWiG health information is written with the aim of helping people understand the advantages and disadvantages of the main treatment options and health care services.

  Because IQWiG is a German institute, some of the information provided here is specific to the German health care system. The suitability of any of the described options in an individual case can be determined by talking to a doctor. informedhealth.org can provide support for talks with doctors and other medical professionals, but cannot replace them. We do not offer individual consultations.

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