How the state employee insurance works

Health policy

Thomas Gerlinger

Prof. Dr. Dr. Thomas Gerlinger is professor at AG 1: Health Systems, Health Policy and Health Sociology at the Faculty of Health Sciences at Bielefeld University

Wolfram Burkhardt

Prof. Dr. Wolfram Burkhardt is a professor at the University of Applied Sciences in Frankfurt am Main in the field of social work and health

Some of the characteristics that are particularly characteristic of the German health system can be traced back to social policy in the German Empire. Self-administration and corporatism are also rooted in long-ago decisions, such as the monopoly of the associations of statutory health insurance physicians and the fragmented structures in health care.
Premature birth home of the Kaiserin Augusta-Victoria Hospital in Berlin in September 1925 (& copy Bundesarchiv, Bild 102-14105)

Health systems have grown historically

The peculiarities of one's own country can be seen particularly well if one looks at how other countries solve the corresponding tasks. This is especially true for the health sector. The health systems of the European and non-European industrialized countries sometimes differ greatly from one another, although ultimately the same tasks of health care are at stake everywhere.

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Health systems in other European countries


The reason for the differences is the strong historical character of the interaction between the various professional groups and institutions, the distribution of tasks and the financing of the health system in the individual countries. Health systems are not designed by experts on the drawing board, but develop in long-term and nationally different historical-political processes.

Using the example of the German health care system, it can be observed how permanent such influences are and how tenacious some decades-old structures are, even though they have long ceased to be considered contemporary solutions.

In the following, some salient features of the German health system are described in their historical context. Above all, they relate to control and decision-making as well as fundamental organizational issues in medical care. Knowledge of these peculiarities is essential for understanding many current problems and political disputes in German health policy.

Bismarck's social security

As part of the social legislation initiated by Reich Chancellor Otto von Bismarck, statutory health insurance was established in 1883. One of the most important characteristics of the German health system is linked to this founding act: the financing of medical care for the majority of the population through social insurance.

One criterion that is often used in international comparisons of health systems is the predominant mode of financing:
  • In state-funded health systems, the funds are raised primarily through general taxes. Examples of tax-financed health systems are Great Britain, Sweden, Denmark, Ireland, Greece, Spain, Italy.
  • In social security systems - because of their historical origin, they are sometimes referred to internationally as "Bismarckian systems" - health services are financed through insurance contributions from citizens to state-regulated and supervised insurance systems. Examples besides Germany are France, Austria, the Netherlands, Belgium, Luxembourg and Japan.
  • "In systems oriented towards the market economy, the financial protection of the risk of illness takes place to a considerable extent through private insurance companies. The most important example of this type is the USA."
The financing of the statutory health insurance is currently at the center of the health policy debate in Germany. The key words here are: "Citizens' insurance", "Flat-rate health or per capita premiums" or "Funded coverage". However, none of the reform proposals currently being discussed is about a system change in the direction of a predominantly tax-financed or market-based system.

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Related learning tour:

"Basic principles of statutory health insurance"

Statutory health insurance in Germany, its historical development and the basic principles that are effective today are presented in the learning tour "Basic principles of statutory health insurance". To the learning tour

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Related learning tour:

Overview of the health fund


Statutory health insurance plays a dominant role in the German health system: around 90 percent of the population have statutory health insurance and almost 60 percent of total health expenditure is borne by the statutory health insurance.

The functional principles of the statutory health insurance as well as the relationships between statutory health insurance and service providers - doctors, hospitals, pharmacies, etc. - therefore exert a significant influence on the German health care system and its most important actors.