Recent Health Care Reforms in Germany: An End to Permanent Crisis Management?

In considering the problem of a ‘cost explosion’ in Germany’s statutory health system, and the main reasons responsible for this phenomenon (demographic change, medical technological progress, and the wrong incentives to the actors involved), the authors argue that orthodox cost containment measures have enjoyed very limited success. They contend that social insurance against sickness must not only embrace the health insurance market, but also requires income redistribution in favour of the insured who must meet high risk premiums from a relatively low income. This would necessitate a radical re-structuring of the regulatory framework because the redistribution should be implemented in a way which is as efficient as possible and compatible with an emerging healthcare market within the European Union (EU). It requires a universal, obligatory minimum level of health insurance, with voluntary opt-outs from the higher full coverage system. This should be supplemented by tax-transfer payments which are economically viable.