A Long Farewell to the Bismarck System: Incremental Change in the German Health Insurance System

German Policy Studies › Vol. 5 Nbr. 1, January 2009

Author: Gerlinger, Thomas

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Summary

Germany's health insurance system represents the archetype of the healthcare arrangement generally known as the "Bismarck model". Core elements of this model are the management of healthcare by self-governing corporatist bodies and the funding primarily by income-related contributions, not by taxes. The German health care system has been in a dynamic transformation process since the early 1990s. We currently have a situation where elements of different systems exist side by side. In this contribution we argue that this transformation has already robbed the core elements of the Bismarck system of a great deal of their importance, and that it must be expected that their significance will continue to decline as the reform process progresses.

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Extract

A Long Farewell to the Bismarck System: Incremental Change in the German Health Insurance System

1 Introduction

Germany's health insurance system represents the archetype of the health-care arrangement generally known as the "Bismarck model". In the decades following its establishment in 1883 it served as the model for numerous other states setting up and designing their own health systems. Nations in continental western and central Europe were first to follow the German example, later joined by countries in Asia and Latin America. Since the collapse of the communist bloc, elements of the German-style health insurance system have come to play an important role in many central and eastern European states. In international comparative research the Bismarck model is identified today as one of three or four classic types of health system (e.g. Wendt 2008). For all the differences of detail, health insurance systems are characterized by the following shared core elements:

- Healthcare is managed by self-governing corporatist bodies, where a distinction must be drawn between self-government of the sickness funds by their members and employers and self-government of healthcare services in the sense of the state delegating to sickness funds and service providers (corporatist partners) the authority to flesh out the details of a broad policy framework (collective negotiations and collective agreements play a central role here).

- Healthcare is funded primarily by income-related contributions, not by taxes.

The health systems of the OECD countries have been in a dynamic transformation process since the early 1990s, and Germany is no exception. Change in the German health system has proceeded at a pace and to an extent that would have been almost inconceivable just a few years ago. We currently have a situation where elements of different systems exist side by side. In this contribution we argue that this transformation has already robbed the core elements of the Bismarck system of a great deal of their importance, and that it must be expected that their significance will continue to decline as the reform process progresses.probably to a point where they will be only a marginal factor in a health system that is fundamentally shaped by other structural elements. Further, we argue that the underlying paradigm shift for system transformation was accomplished in the fir...

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