The German health care system: a model for hospital reform in the United States?

Abstract

Experience in Germany illustrates that the United States could potentially achieve universal access, comprehensive and high-quality services, and value for the money expended with what is often referred to as a "quasi-private and quasi-public" health care system. The German hospital system is analyzed from a number of perspectives, and it is concluded that this approach has some advantages over a single-payer, monolithic-type national health insurance model. This is primarily because of its pluralistic prepayment system and because the commencement of reimbursement negotiations are without direct governmental intervention. The adoption of the German design in the United States, it is concluded, would result in a sharp change in policy direction from a conceptually procompetitive, market-driven hospital environment to a highly federally regulated, state-administered one. The implementation of the German approach in this country would also require a shift from managed care plans and other third party payers having to micromanage the use of health care services for individual patients to tightly centralized national and state fiscal controls (e.g., institutional global capital and operating budgets) targeted at providers.