It’s been called the ‘thorniest challenge’ or the ‘central test’ facing the new German government: the reform of Germany’s ailing health system. This means not just financing the multi-billion euro system but ensuring that the monthly premiums – to be paid by workers and employers alike – remain at a level low enough to encourage job creation and thus solve the other great problem of the ‘grand coalition’ government of SPD and CDU/CSU: massive unemployment. Social solidarity and equitability should not be lost sight of either. Is the grand coalition about to cut the Gordian knot?
Pharmacy sign in Germany
Chief of the CDU/CSU parliamentary faction Volker Kauder let the cat out of the bag in an interview with the weekly news magazine “stern”: it will neither be a ‘citizen’s insurance’ nor a ‘per capita premium’, both roughly meaning a flat-rate insurance fee instead of a fixed percentage of the gross salary or income. Kauder’s plan proposes to raise the income tax by a few percentage points, mainly to cover the insurance costs of children and minors. The plan also envisages the creation of a ‘health fund’ into which both insurance fees as well as the extra taxes will flow. As a last step, a certain fixed amount – per month and per patient – will be paid from this fund to the various public and private Krankenkassen or insuring companies.
The ‘health solidarity tax’ on behalf of the children could be 8 percent of the payable income tax, or three percent of the total income, as the case may be. Since children’s health problems and their treatment alone cost the health insurers between 14 and 16 billion euros every year, it is to be hoped that taking the children out of the insurance premium will lead to the premium being lowered by around 1.5 percent - to the jubilation of employers and workers alike. On the other hand, since income tax raises are more likely to affect those with a higher income, social equitability is also guaranteed.
Kauder revealed that the future ‘health fund’ could pay anything between 150 to 170 euros per patient to the health insurers – after which it would be their business both to cut costs and to retain old members or attract new members by not reducing or even increasing the number and nature of the medical services and facilities that they are prepared to pay for – which is just another name for healthy competition.
Especially the junior doctors in the various hospitals and clinics in Germany being up in arms for more pay and better working conditions – strikes are going on in Ulm, Tübingen and Freiburg in southern Germany right now – Kauder promised that they’d be paid for their innumerable overtime hours.
Considering the fact that the republic was discussing the ‘per capita premium’ suggested by the CDU and the ‘citizen’s insurance’ suggested by the SPD till the other day, it does look as if the grand coalition means business – on the health front. Not that they have a choice: the health insurers are expecting a financing shortfall to the tune of 2.2 billion euros in 2007. Without the much expected reform, this deficit will reach a record 15 billion euros in 2008.
Rising costs of the health system combined with the staggering costs of unemployment –and the curious logic by which higher health insurance fees inevitably lead to less employment and higher unemployment means that there are fewer people to pay health insurance fees –do not make for a tenable situation, whether for the government or for the country. And human health is such a precious thing that even good news can cause nightmares. As Federal Health Minister Ulla Schmidt (SPD) happened to remark in the context:
“We are about to experience a breakthrough in cancer treatment. That’s going to cost money!”