A national healthcare system is established by a country to facilitate three main goals. There are maintain the health levels of the people, offering treatment to the sick, and offering a cushion to protect the citizens from the detrimental effect of the high medical bill. The national healthcare plans can be categorized into four basic systems that include; the Beveridge model, Bismarck model, National Health insurance mode, and out-of-pocket model.
In the Beveridge model, the health care is an offer and financed by the government through taxes just like other social services. Such a system requires that majority of healthcare facilities be state-owned. These systems have low costs for every individual in the society (Fincham, 2009). The government is the single payer has control on what the doctors can do and how much they charge or their service. The system is applied in countries such as Great Britain, Spain, New Zealand, and Hong Kong. The system in Cuba has total government control.
The Bismarck system makes use of an insurance system that is financed through collaborative efforts of employers who make payroll deduction for their employees. This differs from other national systems in that the insurance companies are obliged to cover everyone and do not make a profit. Healthcare facilities tend to be private. The countries that have adopted this system include Germany, France, Belgium, Netherlands, Japan, Switzerland (Fincham, 2009).
The National Health Insurance Model combines the characteristics of both Beveridge and Bismarck. The system is comprised of many private providers, but payments are from a government-backed insurance plan which in turn has members contribute to. With a single payer, they have bargaining power and can get better deals such as the purchase of pharmaceutical products. Under this program, costs are also controlled by being specific on the type of services that can be covered or main the patients wait before they can access the treatment. This is common in Canada, South Korea and Taiwan (Fincham, 2009).
In the out of pocket model there is no government involvement nor is there any insurance scheme. Every individual caters to their medical costs. This implies that the rich will be in a position to access healthcare services unlike the poor in the society.
America’s model is a unique one as it’s integrated properties borrowed from the all the above four described model. Veterans are treated using the Beveridge model, seniors over the age of 65 years covered under a system similar to National Health Insurance Model, some working population are covered under a system that resembles Bismarck Model, while about 15% of the population have not health insurance and have to cater for their healthcare costs (Fincham, 2009). The system in the US has different classes of people, all of which are covered differently. The US health care system is provided under the Patient Protection and Affordable Care Act. This has been famously coined as Obamacare. This paper will analyse this healthcare system against the one adopted in Germany.
America’s Healthcare System:
The Patient Protection and Affordable Care Act
This health system was introduced into the country through a bill in 2010. It was set to commence with full implementation of on January 1, 2014. At that time, the health care system meant that individual and employers had to take responsibility, the state health insurance exchange kicked on, Medicaid was expanded, and there was also an introduction of individual and small-employer subsidies. The act that established the Affordable Act made nine categories of the national healthcare system. These include; quality, affordable healthcare for all citizens, the role of public programs, enhancing the quality and efficiency of healthcare, prevention of chronic diseases, health care workforce, transparency and program integrity, better access to innovative medical therapies, community living assistance, and revenue provision.
To achieve quality affordable Health Care for all American saw the system make reforms in the health insurance via shared responsibility. These reforms helped to eliminate discrimination that existed through policies such as pre-existing conditions. The system also introduced tax credits for individuals and family.
Health Insurance coverage reforms
The new system introduced reforms and rules that helped in the governance of the health insurance industry, expand the market for the health insurance purchase and made coverage for the citizens and legal citizens a right. The system came to offer a reprieve for the individuals and families who did not have access to affordable employer health coverage. The Affordable Care Act reframed the financial relationship between the citizens and the healthcare system thereby dealt with the health insurance crisis that had grown between families, communities and the health-care system.
The Affordable Care Act sought to reach almost universal coverage and with shared responsibility. The health care system also set standards for the insurers to follow when providing products for both individual and small-group markets. Some of the requirements include a ban against rescissions, a prohibition of exclusion of age under their parent’s plans, and coverage of clinical preventive benefits (Rosenbaum, 2011). The health care system required made it illegal to practice pricing and coverage discrimination against adults.
Under this health care system, the insurance standards were expanded and placed a federal minimum where the state insurance is required to implement and enforce these provision. The states were not mandated to implement the federal insurance regulations but rather would apply them on a voluntary basis. This meant that the nature and type of insurance held by most people would not change. It rather helped people who were not insured become eligible for the Medicaid system so long as their states choose to expand.
The health system offered high competitive rate in the market. This has been by offering a good range of products that individuals can purchase. Even without subsidies, the prices were made almost similar to those of group coverage.
Germany’s Health care system
The healthcare system in Germany is known to trace its origins to the mutual aid societies from early 19th century. The system is said to be one of the social benefits based on the concept of social insurance which is embedded in the social solidarity principles. The principle holds the notion that the government is obliged to offer a wide range of social services to its citizens which include medical service, old age pension, and insurance against insurance, disability payments, maternity allowance, and other necessary forms of social welfare. The system of health care was established in 1871 by the Chancellor, Otto Von Bismarck who noted the threat being posed by the working class movement. To curb this, he expanded the sickness benefit societies that were already in existence to ensure that all workers in low waged jobs were fully covered. This was later formalized as a law in 1883 leading to the establishment of the first social insurance program sponsored from the national level.
The split of Germany after WWWII into East and West Germany saw the Eastern part adopt the socialist form of government promoted by the Soviet Union while West German upheld its system that even included the healthcare delivery system. Upon merging in 1990, East Germany was made to adopt the laws that had been set by West Germany. This implied that the healthcare system would continue being used.
In Germany, the law requires that all individual have health insurance. People earning over $35,000 are required to have membership in one of the sickness funds. The sickness funds referee to private not-for-profit insurance companies that are involved in the collection of the insurance premiums from the employees and employers. Citizens with earnings beyond this have the option of joining a private health insurance. 75% of the population are enrolled under the sickness fund while 14% are voluntary members despite their income earnings being higher. The remainder 10% is covered by the private insurance with 2% being covered by police officers insurance, student insurance, and public assistance. Statistics indicate that 1 of every 10 Germans enrolled the sickness fund insurance have a private supplementary insurance that caters for co-payments and other amenities.
The premiums for the individuals are based on income level and not age or number of dependents. The method of collecting these premiums include payroll tax deduction. The social insurance component of the healthcare system has over 500 local sickness funds which are independent and self-regulating. They make payments to providers directly for the services offered to their member are negotiated rates with individual healthcare facilities.
The law requires that the payment funds offer a comprehensive set of benefits. The stipulated services to be covered include physician ambulatory care offered by providers in private settings, home nursing care, different preventive services and even services from health spas (Ridic, Gleason, & Ridic, 2012). There is minimized patient cost sharing. Those people who are unemployed as a result of illness are covered under the disability insurance that offers extra cash payments. The healthcare system is comprised of both public and private hospitals with half the beds being in public hospitals.
Comparison of the healthcare systems in USA and Germany
The first element of comparison for the two health care systems will be based on the choices allowed within the health system. In this, the systems used in the USA and Germany the only match is allowing their users the choice of providers and the consumer choice of health plans. In choices, both the systems in USA and Germany have more than one health plan. In the US, providers are offered the choice of turning down consumers of giving fees above the fees covered by the plan. This is legal in Germany, but it rarely happens (Elllis, Chen, & Luscombe, 2014). In the USA, the employers have a choice on determining on who to sponsor as they hire an employee and therefore have a critical role to play in the process of redistribution of expenses amongst the young, old, healthy and the sick.
In the breadth of coverage, the system in Germany covers 100% of the population in the country as compared to 83% covered under the system in the USA. The health expenditure per capita in Germany is approximately $4,218 as compared to $8233 in the USA (Elllis, Chen, & Luscombe, 2014). The spending on health care against the GDP is at 11.5% in Germany unlike the case in the USA where it stands at 17.9%. The public healthcare expenditure at Germany is 77% compared to 56% in the USA, while the spending on primary health insurance is at 58% in Germany and 34% in the USA (Elllis, Chen, & Luscombe, 2014). Under the two health care system, there is a provision that provided specialized insurance for selected populations such as veterans, families from low-income areas, the seniors, and children, and persons with disability under the system in USA and police, students, and low-income categories in Germany. It is also a common practice under the two systems to have a prevalence of secondary insurance.
The other component of comparison between the two systems in on revenue generation and its redistribution. In term of revenue generation, the system used in Germany uses proportional and progressive taxes as the primary source of revenue. This is unlike the USA where the employers act as the primary sponsors with revenue for the premiums being deducted from each worker. The premiums in the two healthcare systems are contributed by both the employer and employee (Elllis, Chen, & Luscombe, 2014). The difference in effecting this is that in Germany this is shared equally between the employer and employee as compared to the USA where the employer is at liberty of choosing the portion of the premium contributed by the employee. While the system in Germany operates even by imposing a progressive tax, in the USA this is not done, but rather the system allows health insurance contributions to be exempt from taxes.
Regarding revenue redistribution, since the two systems have multiple competing health plans, they both have mechanisms to provide risk adjustment leading to a redistribution of money from the plans enrolling predominantly healthy members to plans that cover more risk or high-cost members. The system in Germany is explicit in this where age, gender, and diagnoses are the main factors considered in the carrying out the adjustments. The adjustment under the USA system is not very explicit but uses individual and small group markets as a basis for doing this (Elllis, Chen, & Luscombe, 2014).
Another comparative element of the two systems will be the healthcare cost control. In the USA, the control of costs is based on the demand-side cost sharing as opposed to the system in Germany that mostly uses the supply side to carry out cost sharing. In both systems, there is the use of bundled payment for the care in health care facilities where the payments are tied to diagnosis-related groups.
Insights for the United States from the Healthcare System in Germany
The various lesson can be drawn from the analysis of two healthcare systems. It can be observed that there is a need for a solidarity based relationship regarding employer and employee to carry out the financing as opposed to getting the funding solely from the general taxes. This has succeeded very well in the serving health protection and promoting industrial relations in Germany by reducing the discontent among employers (Altenstetter, 2003).
It is important to note that enacting a universal healthcare covering every one comes at a cost. About public spending on health care, Germany is ranked second amongst the OECD countries, after the USA, but its expenditure differs from the one in the US as it spends 3% less of the GDP than the USA (Altenstetter, 2003). Through the mandated coverage and employer & employee contributions, in Germany, more purchases are made for the comprehensive medical services as compared to the US.
If the United States was to adopt a universal healthcare systems, there is need to accept the conditions are prerequisites for it succeeds. This implies dramatic power changes which seem not to augur well with citizens and majority of the stakeholders. The health care system in the USA suffers from the reliance on employer goodwill as this often leads to a higher deductible, co-payments, and benefit exclusion for the employees (Altenstetter, 2003).
Implication of the United States Healthcare System
The Affordable Care Act (2010) has been considered as a great change in the healthcare system in the US since the introduction of the Medicaid and Medicare. Under this act, the health system has been focused on three major goals; increase the coverage of the people insured, improving the quality of care, and reduction in the cost of healthcare. Health insurance is the financial means of paying for the healthcare. Access to health represents the process of receiving the medical care itself. Under this new system, the people insured increase to more than 20 million people. As a result of Medicaid expansion, there has been an increase in over 13 million people. However the middle class and the working class have claimed not receiving sufficient support from the system, more so those workers making earnings of over 400% above the national poverty level (Manchikanti, Helm, Benyamin, & Hirsch, 2017). They have claimed the health benefits being offered by the employers have continued to diminish.
Under the current healthcare system in the United States, access to health has been said to be uneven. Members of the Medicaid program have had to face narrow networks. Those getting exchanges or under the employer benefits have faced high out-of-pocket costs.
The current healthcare system has been criticized by cost containment. President Obama defended it stated that it had provided significant effects on cost containment. He claimed that costs would probably be higher had the system not been introduced. In costs reduction discussion, the following are not considered; effects of a recession, increased out-of-pocket costs, increased drug prices and reduced coverage by insurers.
The final impact of the health care system in the US is based on the efforts to improve quality. In a bid to improve quality, there has been an increase in some agencies, boards, commissions, and other government entities. Practice management and compliance costs have been noted to increase. Independent practices that do not have the means of managing new regulatory demands have reduced. The focus on preventive services in the management of chronic diseases have not very successful as only 3% of the health care expenditures have been used to manage these costs (Manchikanti, Helm, Benyamin, & Hirsch, 2017).
The Future of Obamacare Healthcare System
The future of this health care system is uncertain, especially the current administration. It barely survived a re-appeal effort that sought to overturn it. In the vote the, system survived by a single vote. For now, Obamacare continues to be the healthcare system for the country. The Republican in the Congress has shelved their plans to repeal the health reform law. Its future seems to be in the hands of the white house and the current president’s approach (Chotiner, 2017)
The Department of Health and Human Services have been making changes for the enrollment season. Some of the changes that Trumps administration have affected include; shortening open enrollment period with the sign-up period running from 1st November to 15th December. There has been a drastic reduction in advertising budget from $100 million last year to $10 million. This has been argued by effectiveness and performance. Funding for enrollment assistance has also been reduced with a decrease in budget for the navigators by 41%. The federal exchange has been taken offline siting high maintenance cost due to outages that occur during the sign-up period. The current administration has created a lot of uncertainty in the cost-sharing subsidies. The government has not yet made any announcement whether it will continue supporting the program that had effects of reducing deductible and premiums payable by the low-income members.
The attempt to repeal the healthcare system is an indicator that the administration would like to create a change in the healthcare system in the country. It will be no surprise that another move will sooner or later make to introduce reforms in the health sector. Until them, the American citizens will continue to operate under the Obama care health system as outlined in the Affordable Care Act (2010).
Altenstetter, C. (2003). Insights from Health Care in Germany. American Journal of Public Health, 38-44.
Chotiner, I. (2017). The Future of Obamacare.
Elllis, R., Chen, T., & Luscombe, C. (2014). Comparison of Health Insurance in Developed countries. Encylopedia of Health Economics.
Fincham, J. (2009). The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care. American Journal of Pharmaceutical Education, 127.
Manchikanti, L., Helm, L. S., Benyamin, R., & Hirsch, J. (2017). A Critical Analysis of Obamacare: Affordable Care or Insurance for Many and Coverage for Few? Pain Physician.
Ridic, G., Gleason, S., & Ridic, O. (2012). Comparison of Health Care Systems in the United States, Germany and Canada. Materia Socio-Medica, 112-120.
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