1993 German Health Reforms: Initiatives Tighten Cost Controls : Statement of Janet L. Shikles, Assistant Comptroller General, Human Resources Division, Before the Committee on Finance, United States Senate (Google eBook)

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The Office, 1993 - Government insurance - 12 pages
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Page 5 - The German Health Care Structure Reform Act of 1993 is considered the most significant system reform in the past 50 years. The act temporarily linked growth in existing global budgets for office-based physicians and hospitals to the revenue growth of the sickness funds. The act also extended global budgets to the pharmaceutical and dental care sectors and temporarily linked them to the revenue growth of the sickness funds. Finally, it enacted a series of structural reforms to be implemented while...
Page 3 - ... compliance was lacking. Impetus for 1993 Reforms Public pressure to stabilize contribution rates as well as an awareness that structural change was needed to reduce excess utilization and rigidities in the system forced the adoption of the 1993 reforms. Health care observers in Germany identify ance. Most of the rest are civil servants and public employees who participate in a special plan that covers 50 to 80 percent of their health care costs and is often augmented to 100-percent coverage by...
Page 3 - The 1993 contribution rate has averaged 13.4 percent of wages up to a statutory income ceiling, shared equally between employer and employee, with substantial variations from fund to fund. Under this system, premiums reflect the income of the worker and all workers in the same fund pay at the same contribution rate regardless of health status, age, or family size. German citizens are free to choose their own physician for ambulatory care. Nonemergency hospital care requires referral by an office-based...
Page 4 - EARLIER COST-CONTAINMENT EFFORTS ESTABLISHED FRAMEWORK FOR 1993 REFORMS The German health care system has evolved since its inception to meet changing demographic and economic circumstances as well as shifts in political power. Since the mid-1970s, health care reform concentrated on stabilizing contribution rates by linking increases in expenditures in some health care sectors to the revenue growth of the sickness funds; that is, basing increases on changes in the gross wages and salaries of the...
Page 4 - German budget controls reduced real spending by as much as 17 percent between 1977 and 1987, compared with what would have been spent without the budget controls.
Page 8 - The pharmaceutical industry will have to cover additional overruns up to a further DM 280 through lowered drug prices. The sickness funds will be responsible for overruns greater than DM 560 million. Physicians who exceed these standards by specified percentages may be penalized. Beginning in 1994, the physician associations and sickness funds will negotiate regional prescription drug budgets on the basis of prescription cost standards. These measures are expected to produce acceptable pharmaceutical...
Page 2 - ... sections of this testimony provide an overview of the German health care system, discuss problems leading up to the 1993 reforms, and present some early results of these changes.4 OVERVIEW; SICKNESS FUNDS PROVIDE COVERAGE FOR MOST GERMANS Germany's health care system provides nearly universal insurance coverage for a comprehensive range of health services and has a better record than the United States in constraining the growth of health care costs. Since 1980, Germany has been able to stabilize...
Page 11 - ... to monitor provider fees and service utilization, enhance Germany's ability to respond to changing health market conditions. But, the country still faces many cost pressures from an aging population, expanding demands for high-technology care, and consumer demands for high-quality care and choice. The United States should carefully monitor Germany's past experience and current reforms using global budgets, physician fee schedules, and constraints on resource growth as they unfold over the next...

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