Germany Weighs Difficult Healthcare Cuts

Germany has long been famous for its modern, efficient and generous healthcare – a system that has served as a model for other countries. But with staggering costs and soaring federal deficit spending, the government introduced legislation on Wednesday that would drastically cut back the services covered by the country's public health funds.

"Better quality, more efficiency and more transparency is the philosophy of our new bill," German Social Minister Ulla Schmidt told parliament, saying a massive overhaul of public health care was required in order to ensure that every German – regardless how old or how much they have in their wallet – continued to have access to Germany's national healthcare system. "Security and affordability are the two pillars of our healthcare reform," she said.

Lower payments, fewer services

Schmidt said the government's 400-page reform package would reduce the overhead of public health care funds by billions of euros each year while at the same time reducing the healthcare premium payment to 13 percent of a person's gross income.

Among the key changes the legislation contains is the elimination of the government's so-called "sick pay." Currently, after one week of illness, Germany's public health funds cover an employee's wages for up to six weeks. Under the new law, people would be required to take out separate policies to cover illness-related wage losses.

Family planning programs, including pregnancy and motherhood benefits, would also be transferred out of the healthcare system and instead be covered by the federal budget – a transfer that would be financed by a previously announced, three-phase €1 euro increase in taxes on each pack of cigarettes sold in Germany. The bill would also require a co-payment of €15 each time a patient visited a specialist without a referral from his or her family doctor.

The government also wants to establish a "Center for Quality in Medicine," which would determine which medical procedures and medications should be covered by public health funds. It would establish treatment guidelines aimed at streamlining the handling of patients and, the government hopes, rein in costs.

Patients would also have to dig deeper in their pockets for expensive fertility-related treatments like artificial insemination and sterilization procedures, which would also be dropped by health plans.

Balanced, but bitter pills

Speaking on German public radio Wednesday morning, the Social Democrat's parliamentary spokesman on health issues, Klaus Kirchner, said the package included "a few bitter pills" to swallow, but also said it was "well-balanced."

Even if passed by the Bundestag, most of the elements in Schmidt's bill require approval from the Bundesrat, Germany's upper legislative chamber, where the opposition Christian Democrats hold a solid majority. They have also proposed their own reform plan – one that, in some areas at least, calls for even deeper cuts.

Christian Democratic Union (CDU) leader Angela Merkel's plan would require patients to pay 10 percent of the health costs they incur each year, or up to a total of 2 percent of their annual wages. It would also require patients to take out private insurance policies for dentures. Merkel said her proposal, like Schmidt's, would reduce premiums to 13 percent. But the federal government, controlled by a coalition of Social Democrats and Greens, has rejected Merkel's proposal, saying it was equivalent to dismantling the country's social system.

The CDU chairwoman's counterproposal has also driven a wedge between Christian Democrats. Horst Seehofer, the Christian Democratic Union's spokesman on healthcare issues has refused to support his own party's proposal and is not expected to speak in the Bundestag on Wednesday.

Critics of the government's reform bill say it won't go far enough. Jürgen Donges, the former head of the government's prestigious panel of economic advisors, told the Berliner Zeitung newspaper: "Wishful thinking is being glorified as reality." Donges said the government had failed to prove its claims that the reforms would actually save the promised €8.5 billion. "Nobody can deliver" serious estimates of the savings effects reform would have on the public health funds, he warned. Instead, Donges said Germans needed to take more personal responsibility for cutting costs in the health care system. "If a patient can see and feel what a visit to the doctor actually costs, then he'll behave a lot more reasonably," he said.

But both the Social Democrats and the Christian Democrats have pledged to work together in the coming weeks to forge a common position that would survive a Bundestag vote.

"The people have the right to expect from us that we're capable of compromise," said Franz Müntefereing, the Social Democrats' parliamentary leader.