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Friday 25th May 2018

German healthcare faces crisis

5th July 2006

Germany’s healthcare system looks set to face the same financial pressures as the UK with an estimated 1.2bn euros (£0.83bn) shortfall for the first quarter of 2006.

Federal health minister Ulla Schmidt, has warned that the deficit will continue to grow, with some estimates that it could reach 7bn euros, out of a total budget of 145bn euros by the end of the year. 

To redress the balance, the health ministry has said that health insurance contributions may have to rise to plug the financial gap, prompting increasing calls for long awaited healthcare reforms. 

Rising unemployment due to the recession, combined with an ageing population means there are less people paying into the system, while expenditure on healthcare has risen. All employed Germans pay compulsory health insurance under the current system, with the amount depending on earnings. 

Public health insurers paid out an additional 4.8% in the first quarter of 2006, but revenues were up by only 0.2%. In 2005 the sector saw a profit of 1.8bn euros. The government plans to pump 4.2bn euros into the health system this year to cover the losses.

Despite these moves, the government is under growing pressure to reform the system - Germany has one of the most expensive public health systems in the world, but many consider it as one of the least efficient. 

The number of doctors and dentists per million people is high and the system is also rife with corruption. The drug industry is also under fire, with Germany having too many drugs available and some at four times the cost of other EU countries. Salary increases will also contribute to the rising costs.

The ruling coalition has agreed on the need to reform the system, but neither of the two parties has been able to reach an agreement on how to go about it, but have pledged not to restrict access to treatment.

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