4 ms·

> Germany has Europe's oldest universal health care insurance system, with origins dating back to Otto von Bismarck... I wasn't aware that a government-sponsor

by csense 14y ago

> Germany has Europe's oldest universal health care insurance system, with origins dating back to Otto von Bismarck... I wasn't aware that a government-sponsored healthcare system this old existed in the world, because it's always seemed to me that such programs are fundamentally unsustainable. So what I want to know is, how do they keep it sustainable? For example, if there's no longer a market where demand responds to price signals, how do they determine how much procedures cost? What keeps providers from increasing prices 5% every year, regardless of cost increases, until they're essentially looting taxpayers' money on a massive scale? If the government sets prices, how do you avoid damaging shortages or surpluses when it gets the pricing wrong? How about moral hazard -- the problem of people who waste healthcare resources by going to the doctor for every little sniffle, scrape and twinge since it's free? What keeps people in other countries who don't pay into the system from getting a burning desire to move to Germany when they find out they have something really expensive to treat like cancer or AIDS?

_delirium 14y ago
I'm not sure about Germany, but in Denmark it's just a service of the state. Doctors' salary, and hospitals' equipment needs, are assessed and negotiated the same way as with other sectors of the public-safety apparatus, such as the police department, fire department, and military. You'd like to keep your hospitals well-stocked, your fire engines maintained and modern, your air force state-of-the-art, etc., but without spending infinite money on any of those, so similar decision-making procedures are used for each. Some services are contracted out to the private sector on a competitive-bidding basis. For example, private companies run a number of the ambulance services, and also the Copenhagen bus system: the government draws up its requirements, solicits bids, and chooses a bidder, who then gets an N-year contract. In addition, there are medical-device manufacturers, both foreign and domestic, who sell on the same competitive-bidding basis. So far the bidding seems to be relatively clean, especially compared to, say, what happens with U.S. defense contractors. Moral hazard doesn't seem to be a large problem with hospital services (doctors aren't going to order an unnecessary surgery), and there is a strong culture against unnecessary prescription drugs. So about the worst that can happen is someone wastes their local physician's time 30 minutes at a time. Since small-time office visits aren't where most of the healthcare costs go (in either Denmark or the U.S.), it's a minor concern. As far as foreigners, that's a concern, and handled by the immigration system (you probably won't get a visa if that's the reason you're trying to enter). The main current concern is intra-EU system-shopping of that sort from Europeans, who don't need visas. There are attempts to standardize something around that (the EU "blue card" scheme is one), but it's one of those awkward areas that showcases the EU's quasi-integration. There is also a debate currently about whether Denmark should start charging tourists, since it's one of the few countries that provides completely free emergency care to anyone. Many see this as the right thing to do: if a visitor is injured in a mugging, for example, some people view charging them for the hospital visit as adding insult to injury, like sending them a bill for the police investigation would be. But there is also annoyance that other countries don't reciprocate, so a little bit of a sentiment of, "well if the bastards are going to charge me for getting mugged in NYC, let's charge them when they come here".
- sp332 14y ago
  The USA does not have a culture against prescription drugs. On the contrary, many patients are not satisfied unless the doctor gives them some pills. Antibiotics are often demanded even for viral infections, which probably lead directly to MRSA and other drug-resistant bacteria.
  - _delirium 14y ago
    That's true; I think there are definitely cultural factors that make such a system harder to implement in the US. An even bigger one is probably differing attitudes towards end-of-life "heroic measures". I had in mind more a culture among doctors, though: Danish doctors will simply not give you antibiotics no matter how much you beg, if they consider it unnecessary. That's also a norm among American doctors, increasingly emphasized in med school and by professional organizations, but it doesn't seem as strongly followed in practice. That may also be related to the American quasi-private system, which allows "doctor-shopping": if the first says no, you can always find another one who'll write the prescription (and some doctors even make a business out of a word-of-mouth reputation for being lax with prescriptions).
  - DanBC 14y ago
    And weirdly, non-compliance with medication is roughly similar in the US (very expensive meds) and the UK (cheap meds, and 80% of people who need a prescription don't pay anything). There's not much change if you look at the severity of need for meds either - many organ transplants fail because people don't comply with the meds.
- Shish2k 14y ago
  > the worst that can happen is someone wastes their local physician's time 30 minutes at a time I've also heard a theory that this isn't a bad thing: IIRC in Japan there's a culture of going to the GP for every tiny little thing, which means that they have a massive number of 5-minute visits - but potentially serious illnesses are spotted and cured before they become serious, which means that overall health costs are lower and results are better.
lysium 14y ago
I don't think that health care is a market. Sure, you can take your headache or buy a pill, but you cannot choose to have a life-saving procedure or not, less even compare prices (really). Further, if you spread the risk of getting ill across a whole nation, paying for health insurance gets cheaper for each individual. You cannot have that with a health care market. Anyways, your questions concerning sustainability are valid. There's a catalog about how much health care providers get from insurance companies for each procedure. I don't know who sets up that catalog or how it is negotiated, though. Recently, a (small) fee has been added which you have to pay once per quarter if you visit a doctor. Further, you have to pay a small amount (~$5) for each medication you buy (unless you need a lot of it). So, people don't visit the doctor and buy medication that easily (anymore). People who have not paid into the system are only treated for acutely life-threatening symptoms (and even then have to pay for themselves). To pay into the system, you usually need to have a job, so it's not something that you can just do once you see you have a costly illness.
SideburnsOfDoom 14y ago
> government-sponsored healthcare system ... always seemed to me that such programs are fundamentally unsustainable. What is it about them that seems unsustainable to you? Are you an economist or an accountant? Do you have a citation to back up this point of view? Here's a recent one against it: http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/the-12-trillion-health-care-tax http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&#...
DasIch 14y ago
> > Germany has Europe's oldest universal health care insurance system, with origins dating back to Otto von Bismarck... > I wasn't aware that a government-sponsored healthcare system this old existed in the world, because it's always seemed to me that such programs are fundamentally unsustainable. They are not fundamentally unsustainable but Germany's current social system is unsustainable and will eventually fail because the demography and economics have undergone massive changes since it has been designed. > So what I want to know is, how do they keep it sustainable For example, if there's no longer a market where demand responds to price signals, how do they determine how much procedures cost? We do have a market in which insurance and health care providers negotiate prices and as you can see not only does this work it works a lot better than the US market does. > What keeps providers from increasing prices 5% every year, regardless of cost increases, until they're essentially looting taxpayers' money on a massive scale? Health care providers can't set arbitrary prices and insurance providers are regulated. Also insurance is mandatory but not paid for from taxes unless you don't have any income. The mandatory social insurances, of which there are four, all get paid a certain amount relative to your income. > If the government sets prices, how do you avoid damaging shortages or surpluses when it gets the pricing wrong? See above. The government doesn't set the prices. > How about moral hazard -- the problem of people who waste healthcare resources by going to the doctor for every little sniffle, scrape and twinge since it's free? You want to detect serious stuff early to keep the costs down, so to a certain degree you want that to happen. Apart from that there is a small 10€ fee you have to pay once every quarter for each doctor you visit unless you were referred to him by another doctor. This keeps moral hazard down and especially prevents unnecessary visits to specialized doctors. > What keeps people in other countries who don't pay into the system from getting a burning desire to move to Germany when they find out they have something really expensive to treat like cancer or AIDS? Like moral hazard this is not such a big issue as one might think it is. Most people tend to be reluctant to make such big moves, especially if they don't speak the local language which applies even more so if the topic they would like to talk about is their health. Apart from that there aren't that many countries in the world with a health care system as catastrophic as the one in the US. More importantly though the people who do actually move to Germany for treatment tend to have lots of money and have no problem spending it on their health. So these patients are flown into the hospital using the dedicated helipad, on top of the luxury ward, in which they wait for overpriced procedures and get their overpriced medications.

by csense 14y ago

_delirium 14y ago

I'm not sure about Germany, but in Denmark it's just a service of the state. Doctors' salary, and hospitals' equipment needs, are assessed and negotiated the same way as with other sectors of the public-safety apparatus, such as the police department, fire department, and military. You'd like to keep your hospitals well-stocked, your fire engines maintained and modern, your air force state-of-the-art, etc., but without spending infinite money on any of those, so similar decision-making procedures are used for each. Some services are contracted out to the private sector on a competitive-bidding basis. For example, private companies run a number of the ambulance services, and also the Copenhagen bus system: the government draws up its requirements, solicits bids, and chooses a bidder, who then gets an N-year contract. In addition, there are medical-device manufacturers, both foreign and domestic, who sell on the same competitive-bidding basis. So far the bidding seems to be relatively clean, especially compared to, say, what happens with U.S. defense contractors. Moral hazard doesn't seem to be a large problem with hospital services (doctors aren't going to order an unnecessary surgery), and there is a strong culture against unnecessary prescription drugs. So about the worst that can happen is someone wastes their local physician's time 30 minutes at a time. Since small-time office visits aren't where most of the healthcare costs go (in either Denmark or the U.S.), it's a minor concern. As far as foreigners, that's a concern, and handled by the immigration system (you probably won't get a visa if that's the reason you're trying to enter). The main current concern is intra-EU system-shopping of that sort from Europeans, who don't need visas. There are attempts to standardize something around that (the EU "blue card" scheme is one), but it's one of those awkward areas that showcases the EU's quasi-integration. There is also a debate currently about whether Denmark should start charging tourists, since it's one of the few countries that provides completely free emergency care to anyone. Many see this as the right thing to do: if a visitor is injured in a mugging, for example, some people view charging them for the hospital visit as adding insult to injury, like sending them a bill for the police investigation would be. But there is also annoyance that other countries don't reciprocate, so a little bit of a sentiment of, "well if the bastards are going to charge me for getting mugged in NYC, let's charge them when they come here".

sp332 14y ago
The USA does not have a culture against prescription drugs. On the contrary, many patients are not satisfied unless the doctor gives them some pills. Antibiotics are often demanded even for viral infections, which probably lead directly to MRSA and other drug-resistant bacteria.
- _delirium 14y ago
  That's true; I think there are definitely cultural factors that make such a system harder to implement in the US. An even bigger one is probably differing attitudes towards end-of-life "heroic measures". I had in mind more a culture among doctors, though: Danish doctors will simply not give you antibiotics no matter how much you beg, if they consider it unnecessary. That's also a norm among American doctors, increasingly emphasized in med school and by professional organizations, but it doesn't seem as strongly followed in practice. That may also be related to the American quasi-private system, which allows "doctor-shopping": if the first says no, you can always find another one who'll write the prescription (and some doctors even make a business out of a word-of-mouth reputation for being lax with prescriptions).
- DanBC 14y ago
  And weirdly, non-compliance with medication is roughly similar in the US (very expensive meds) and the UK (cheap meds, and 80% of people who need a prescription don't pay anything). There's not much change if you look at the severity of need for meds either - many organ transplants fail because people don't comply with the meds.
Shish2k 14y ago
> the worst that can happen is someone wastes their local physician's time 30 minutes at a time I've also heard a theory that this isn't a bad thing: IIRC in Japan there's a culture of going to the GP for every tiny little thing, which means that they have a massive number of 5-minute visits - but potentially serious illnesses are spotted and cured before they become serious, which means that overall health costs are lower and results are better.

lysium 14y ago

I don't think that health care is a market. Sure, you can take your headache or buy a pill, but you cannot choose to have a life-saving procedure or not, less even compare prices (really). Further, if you spread the risk of getting ill across a whole nation, paying for health insurance gets cheaper for each individual. You cannot have that with a health care market. Anyways, your questions concerning sustainability are valid. There's a catalog about how much health care providers get from insurance companies for each procedure. I don't know who sets up that catalog or how it is negotiated, though. Recently, a (small) fee has been added which you have to pay once per quarter if you visit a doctor. Further, you have to pay a small amount (~$5) for each medication you buy (unless you need a lot of it). So, people don't visit the doctor and buy medication that easily (anymore). People who have not paid into the system are only treated for acutely life-threatening symptoms (and even then have to pay for themselves). To pay into the system, you usually need to have a job, so it's not something that you can just do once you see you have a costly illness.

SideburnsOfDoom 14y ago

> government-sponsored healthcare system ... always seemed to me that such programs are fundamentally unsustainable. What is it about them that seems unsustainable to you? Are you an economist or an accountant? Do you have a citation to back up this point of view? Here's a recent one against it: http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/the-12-trillion-health-care-tax http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&#...

DasIch 14y ago

> > Germany has Europe's oldest universal health care insurance system, with origins dating back to Otto von Bismarck... > I wasn't aware that a government-sponsored healthcare system this old existed in the world, because it's always seemed to me that such programs are fundamentally unsustainable. They are not fundamentally unsustainable but Germany's current social system is unsustainable and will eventually fail because the demography and economics have undergone massive changes since it has been designed. > So what I want to know is, how do they keep it sustainable For example, if there's no longer a market where demand responds to price signals, how do they determine how much procedures cost? We do have a market in which insurance and health care providers negotiate prices and as you can see not only does this work it works a lot better than the US market does. > What keeps providers from increasing prices 5% every year, regardless of cost increases, until they're essentially looting taxpayers' money on a massive scale? Health care providers can't set arbitrary prices and insurance providers are regulated. Also insurance is mandatory but not paid for from taxes unless you don't have any income. The mandatory social insurances, of which there are four, all get paid a certain amount relative to your income. > If the government sets prices, how do you avoid damaging shortages or surpluses when it gets the pricing wrong? See above. The government doesn't set the prices. > How about moral hazard -- the problem of people who waste healthcare resources by going to the doctor for every little sniffle, scrape and twinge since it's free? You want to detect serious stuff early to keep the costs down, so to a certain degree you want that to happen. Apart from that there is a small 10€ fee you have to pay once every quarter for each doctor you visit unless you were referred to him by another doctor. This keeps moral hazard down and especially prevents unnecessary visits to specialized doctors. > What keeps people in other countries who don't pay into the system from getting a burning desire to move to Germany when they find out they have something really expensive to treat like cancer or AIDS? Like moral hazard this is not such a big issue as one might think it is. Most people tend to be reluctant to make such big moves, especially if they don't speak the local language which applies even more so if the topic they would like to talk about is their health. Apart from that there aren't that many countries in the world with a health care system as catastrophic as the one in the US. More importantly though the people who do actually move to Germany for treatment tend to have lots of money and have no problem spending it on their health. So these patients are flown into the hospital using the dedicated helipad, on top of the luxury ward, in which they wait for overpriced procedures and get their overpriced medications.