Healthcare refers to activities that are taken to diagnose, treat or to prevent any form of alteration from the normal functioning of the body parts and organs. Health practitioners in various health institutions are responsible for providing such activities to individuals. Nevertheless, healthcare shows greater diversity from country to country as well as among groups and individuals. These variations arise due to socio-economic factors in addition to the health policies that different countries have put in place. It should be noted that healthcare affects significantly the economy of any given country. In Germany for instance, the healthcare consumed approximately 11.3% of the country’s GDP in the past decade. Such massive spending does not go unrewarded. The country is now celebrating increased life expectancy and good health among its citizens. In that respect, this paper will compare the healthcare system between the U.S.A and Germany in relation to efficiency and equity. It will also provide recommendations on the reforms that U.S. needs to adopt in order for its healthcare system to win a global appeal.
Healthcare System in Germany
The healthcare system in Germany originated from the “mutual aid societies” which was launched in the 19 th century. Ideally, the system tends to focus more on the concept of social insurance in an attempt to reinforce social solidarity. According to this system, it is the mandate of the government to provide vast benefits to its citizens. Such benefits may include medical care, maternity benefits, and pensions during old age among others. The social insurance is characteristic of the German health system. It comprises of the sickness insurance funds, which provides sickness benefits to all members of the society irrespective of their occupations. These funds were not supposed to be used by insurance companies that were relying on premiums from the employees and employers to make profits.
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Healthcare System in the United States of America
Unlike in Germany, U.S.A. lacks a unified health insurance system. Being a capitalistic society, U.S.A. believes in the exchange of goods and services for money. The health care system has extensively adopted the system whereby patients have to pay prior to them being served. In the past few years, many insurance systems have cropped up, however, they seem to be too expensive for the citizens to afford. The health insurance is usually acquired through a private marketplace or from the government to targeted groups. Despite it being called health insurance, it appears to be more like illness insurance since it normally pays for medical care in case of sickness.
Comparison of the Health Care Systems
The German Healthcare System
The social insurance that is a chief feature of the German health system comprises of the sickness insurance funds, which provides sickness benefits to all members of the society irrespective of their occupations (Knox, 2009). In this regards, the government enforced laws that are directly linked with the medical insurance system. According to the law, all citizens are entitled to a health insurance. Notably, individuals earning $35,000 and below were supposed to join the sickness funds that was supposed to cater for their healthcare. The sickness funds were not private. This implies that the funds were not supposed to be used by insurance companies that were relying on premiums from employees and employers to make profits. On the other hand, individuals earning more than $35,000 had the option to join private health insurance. An estimated 74% of the German population is bound to enroll with the sickness fund (Knox, 2009).
Merits of the German Healthcare System
First, the premiums from individual health insurance arrive at based on the income an individual received but not the age or even the dependency ratio (Knox, 2009). They were collected via deductions from an individual’s salary. Secondly, the social insurance revolves around 500 localized sickness funds that are independent and self-regulating. The social insurance pays individual hospitals for the services they offer to their members as per the rates in which they agreed upon. It is the role of the regional groups of funds to negotiate with the relevant service providers on the cost of particular treatments. In most cases, the funds account for approximately 70% of the healthcare spending (Knox, 2009). Thirdly, the law requires that the sickness funds need to provide comprehensive benefits to the citizens of the country. Such benefits include hospital care, preventive services, home nursing care, physician ambulatory care as well as visits to health spas. This is done to ensure that cost sharing associated with the patient is as minimum as possible. There also exist funds such as the disability insurance. The aim of these funds is to supplement cash to individuals who are unemployed due to their health situations.
Demerits of the German Healthcare System
The healthcare system used in Germany has a couple of hurdles relating to the mode of payment. The fact that the system relies on a third party to facilitate the payment process implies that a client who is cost sensitive can easily sense that the process does not make sense in reducing the medical costs. Additionally, patients lack the incentive to set their demands and the medical practitioners will lack the impetus to limit their services. In other words, the environment would be unfavorable to allow competition that would result in a reduction in costs. The system appears to favor completion among the doctors to attract more patients. In addition, the ability of the system to regulate the cost of services chiefly depend on the bargaining power of the sickness funds.
The American Healthcare System
An estimated 85% of U.S.A. citizens are covered by health insurance plan. The insurance pays approximately 90% of the hospital care bill and up to 74% of the amount that is supposed to be paid to the doctors. As aforementioned, the health insurance is available from vast sources. First, there is the private health insurance. Private companies provide this type of insurance. Individuals who subscribe to this type of insurance cover usually pay the insurance company a monthly fee towards their insurance cover (Dorning, 2014). The company, on the other hand, will be obligated to pay the necessary costs in case their client gets ill. There are different insurance covers depending on the level of risk a client is willing to take. Notably, the more the expense the client is willing to pay in case of illness, the lesser the charges for the insurance.
Furthermore, some citizens may opt to pay for their own insurance; nevertheless, in most cases, the employers are responsible for paying the insurance cover for the employees (Dorning, 2014). Essentially, the insurance acts as an employment benefit to the employee’s salary. Secondly, there is the medical insurance. This type of insurance forms part of the U.S.A. budget. The insurance provides medical coverage for persons over the age of 65 (Dorning, 2014). In addition, young individuals with disabilities are the beneficiaries of this insurance. The aged people who might not be having an insurance cover owing to their financial situations are also provided with the Medicaid, which is sourced from the federal and state taxes. The advantage of the American healthcare system is the freedom of choice. In other words, doctors have the freedom to choose where they want to practice their medical skills whereas the patients have the freedom to pick the doctor whom they prefer to serve them (Dorning, 2014). Nevertheless, the system has its shortcoming too.
Recommendations and Conclusion
It happens that, the cost of accessing medical care in U.S.A. is one of the biggest bottlenecks among the citizens (Obamacare Facts, 2015). In this regards, the social insurance, which is an appealing feature in the German healthcare system, needs to be adopted in the U.S healthcare system. This is because the insurance coverage is offered via independent plans. In addition, it has a mandated approach, whereby the law makes certain conditions be a requirement that the insurance cover ought to fulfill. The institutional framework of the German system has made it possible to control the costs incurred during caring for the ill. This was made possible by associating medical costs to the income of the member of the sickness fund. Notably, the success chiefly depended on the growth of wages and salaries as well as the successful negotiations between the sickness funds and the medical practitioners. Such cost containment measures have made it possible to lower the salaries of the medical practitioners significantly. In conclusion, the adoption of the social insurance policy from the German system will see the medical costs being lowered significantly.
Dorning, J. (2014). The U.S. Health Care System: An International Perspective. DPE Research Department , Washington DC . Retrieved from http://dpeaflcio.org/programs-publications/issue-fact-sheets/the-u-s-health-care-system-an-international-perspective/
Knox, R. (2009). Most Patients Happy With German Health Care. NPR . Retrieved from http://www.npr.org/templates/story/story.php?storyId=91971406
Obamacare Facts. (2015). Health Care Facts: Why We Need Health Care Reform. Obamacare Alternative . Retrieved from http://obamacarefacts.com/healthcare-facts/