HLTH 6510 Week 9 US and Germany Comparison Example

Same Design Questions, Different Answers: The U.S. and German Health Systems Compared on Seven Matched Dimensions

Student Name

Walden University

HLTH 6510: Essentials of the U.S. Healthcare Delivery System and Population Health

Instructor Name

Month Day, Year

Same Design Questions, Different Answers: The U.S. and German Health Systems Compared on Seven Matched Dimensions

Why Germany, and How the Comparison Is Matched

Germany makes a useful comparison with the United States because both rely heavily on employment-linked insurance and multiple insurers rather than a single government payer, yet they reach very different results. Both are often described as insurance-based systems, so the comparison isolates design choices rather than comparing a market system with a national health service. This paper sets the two systems against each other on seven design questions, answered in the same order for each: who is covered and how, where the money comes from, how risk is pooled, what benefits are covered, what patients pay, how providers are paid and who governs the system. The U.S. answers draw on the system as a whole, illustrated by the course's composite region; the German answers draw mainly on a review of German statutory health insurance by Busse et al. (2017).

1. Who Is Covered and How

United States. Coverage depends on a person's circumstances: employment for most working-age adults, age 65 or disability for Medicare, low income for Medicaid and individual purchase, often subsidized, for others. Some people fall between these pathways and remain uninsured.

Germany. Coverage is mandatory. Close to nine in ten residents are covered by statutory health insurance through sickness funds, and most of the rest, mainly higher earners who opt out, civil servants and the self-employed, hold substitutive private insurance (Busse et al., 2017). Being uninsured is rare.

2. Where the Money Comes From

United States. Employer and employee premiums, federal and state taxes for Medicare and Medicaid, tax subsidies for employer coverage and substantial out-of-pocket spending (Shi & Singh, 2019).

Germany. Statutory insurance is financed mainly by contributions set as a share of wages up to a ceiling, shared between employers and employees, with a smaller federal tax subsidy (Busse et al., 2017). Contributions depend on income, not on health or age.

3. How Risk Is Pooled

United States. Risk is pooled in many separate pools: each employer's plan, each insurer's book of business, Medicare and each state's Medicaid program. Pools differ in their health risk, and people move between them as their circumstances change.

Germany. Contributions flow into a central fund, which pays each sickness fund an amount adjusted for the age, sex and diagnoses of its enrollees; a fund covering sicker people therefore gets more per member (Busse et al., 2017). Sickness funds compete for members, but not by selecting healthier ones.

4. What Benefits Are Covered

United States. Benefits vary by payer and plan. Most individual and small-group plans must cover essential health benefits, but large employer plans, Medicare and Medicaid each have their own benefit rules.

Germany. A uniform, broad benefit package applies to all statutory insurance members, defined largely through the system's joint self-governance bodies (Busse et al., 2017). Sickness funds may add limited extras but cannot cut the core package.

5. What Patients Pay

United States. Cost sharing is often substantial and varies by plan: deductibles of several thousand dollars are common in employer plans, while Medicaid limits charges sharply. The worker traced in week eight owed $180 for a routine visit.

Germany. Cost sharing is modest, with small fixed copayments for items such as hospital days and prescriptions and an annual cap on total copayments tied to income, lower for people with chronic illness (Busse et al., 2017).

6. How Providers Are Paid

United States. Methods vary by payer: negotiated fee schedules in commercial plans, Medicare's fee schedule for physicians, built on relative values that estimate physician work (Hsiao et al., 1988), diagnosis-based payments for hospitals, capitation in Medicaid managed care and special rates for community health centers.

Germany. Ambulatory physicians in statutory insurance are paid through a uniform fee schedule negotiated collectively, and hospitals are paid mainly through a national diagnosis-related group system (Busse et al., 2017). Prices are set collectively rather than negotiated plan by plan.

7. Who Governs the System

United States. Governance is divided among federal agencies, fifty state governments, private insurers and employers, each setting rules for its own part of the system.

Germany. The federal government sets the legal framework, while corporatist self-governance bodies representing sickness funds and providers make many detailed decisions on benefits, fees and quality within it (Busse et al., 2017).

What Each System Costs and Produces

The two systems produce different results. Germany spends a markedly smaller share of national income on health care than the United States, covers nearly everyone and holds patient cost sharing to low capped amounts. The United States spends more per person than any other high-income country while leaving millions uninsured and many insured people facing high deductibles. Germany faces its own problems, including a sharp divide between ambulatory and hospital sectors, more hospital beds and admissions than many peers and complaints about waits for some specialists (Busse et al., 2017). The comparison does not show that one system is better on every measure. It shows how specific design choices, especially the mandate, income-based contributions and collective price setting, lead to universal coverage at lower cost.

It also shows what would have to change for a U.S. region like the course's composite one to look more like Germany: not only coverage rules, but how prices are set and how risk is pooled across insurers. Expanding coverage alone, without those other changes, would leave the U.S. answers to questions three, five and six largely as they are.

What the Matched Answers Show

Matched this way, the differences appear as different answers to the same questions. Both countries use multiple insurers and employment-linked contributions. Germany adds a mandate, income-based contributions, a central pool with risk adjustment, a uniform benefit package, low capped cost sharing and collective price setting. The United States leaves each of those questions to separate payers and markets. The German choices produce near-universal coverage and limited patient costs; the U.S. choices produce variety, gaps and high out-of-pocket costs for some. A comparison that described each country separately would have obscured the most useful finding: the two systems are built from similar parts assembled under different rules.

References

Busse, R., Blümel, M., Knieps, F., & Bärnighausen, T. (2017). Statutory health insurance in Germany: A health system shaped by 135 years of solidarity, self-governance, and competition. The Lancet, 390(10097), 882-897. https://doi.org/10.1016/S0140-6736(17)31280-1

Hsiao, W. C., Braun, P., Yntema, D., & Becker, E. R. (1988). Estimating physicians' work for a resource-based relative-value scale. New England Journal of Medicine, 319(13), 835-841. https://doi.org/10.1056/NEJM198809293191305

Shi, L., & Singh, D. A. (2019). Delivering health care in America: A systems approach (7th ed.). Jones & Bartlett Learning.