German and Swedish Healthcare Policies - Differences and Commonality - Research Paper Example

Social Policies in This Field in Two or More Countries That Is Germany and Sweden Table of Contents Introduction 2 Key Characteristics of Healthcare Policies in the Context of Germany and Sweden 2 Germany 2 Sweden 4 Comparative Healthcare Policy from Convergence/Functionalist and Path Dependency/Institutionalist Perspectives 6 Convergence/Functionalist Perspective 6 Path Dependency/Institutionalist Perspective 9 Conclusion 11 References 13 Bibliography 15 Introduction Healthcare has been a prominent and highly controversial issue. However, in the last few decades, it has become a major area of concern almost in all the developed nations of the world. The factors such as ageing population, explosion of new medical technologies and constantly increasing expectations along with demands of public have elevated the issue of health care to the top of the political agenda. The constant pressure on political leaders to duly meet the rising demands of public for extended service with the focus on constraining healthcare costs and managing scarce societal resources has significantly taken pace in recent years (Blank & Burau, 2007.). The purpose of this essay is to conduct comparative analysis of the German and Swedish healthcare policy from the Convergence/Functionalist and Path Dependency/Institutionalist perspectives. Key Characteristics of Healthcare Policies in the Context of Germany and Sweden Germany The social insurance system in Germany was first initiated in the year 1883 on a national level. The governing principles of this scheme rest on three fundamental aspects including solidarity, subsidiarity and corporatism. Solidarity in Germany implies that the government bears the responsibility for providing universal access to those citizens who are unable to avail private health insurance plan. Accordingly, every individual in the society contributes with the intention of helping these people reflecting the idea of social partnerships. On the other hand, subsidiarity reflects a decentralised system wherein policy is enforced by the trivial political and administrative divisions in the society. The doctrine of subsidiary is widely recognised by all political parties and is filmy imbibed in the Basic Law of 1949 of the German constitution. In relation to the social policy field of health care, subsidiary implies that the government is exclusively accountable for incorporating and enforcing legislative measures as well as instituting the corporatist bargaining process. The third dimension of social insurance system of Germany involves corporatism. Accordingly, corporatism is viewed as the democratically nominated representatives of employers and employees of the governing boards of sickness funds and occupies an important place both at national and regional decision-making divisions (Clarke & Bidgood, 2013; Marmor, 2005). The healthcare system in Germany in recent times has witnessed series of controversial changes that have been implemented for bringing about improvements in the competition specifically in the healthcare sector and minimising the escalating costs associated with the same. Although the reform process initiated is largely been unsure to realise those goals but it is projected that despite the financial problem associated with the German healthcare, there are certain aspects pertaining to the German healthcare system that are reckoned to perform well. Accordingly, it has been apparently observed that all citizens in Germany including long-term residents are required to have mandatory health insurance. In this regard, insurance for those people earning less that €49,500, is provided under the public statutory health insurance scheme (SHI), which is also known as Gesetzliche Krankenversicherung (GKV) in Germany. SHI functions across 150 sickness funds (SFs) and the German citizens are insured on a per family basis (Busse & Wasem, 2013; Thomson & Reed, 2011). On the other hand, any citizen earning €49, 500 annually or more are provided with an option to purchase private health insurance plan. However, an individual who has chosen private insurance plan cannot avail the SHI scheme. Since, health insurance is obligatory in Germany, both statutory health insurance funds as well as private health insurance corporations are obliged to receive any applicant. Moreover, SHI scheme in Germany covers approximately 85 per cent of the total population, while private health insurance covers nearly 10 per cent of the population. The remaining portion of the total population including policemen, soldiers and others are covered by special regimes. Traditionally, cost saving provisions were levied by SHI that were replaced by co-payment plan for the office visits in the year 2004. SHI schemes are funded by mandatory contributions that are imposed as a percentage of total wages up to an upper limit. In this regard, earning amounting to €44,550 annually is exempted from making contributions. Moreover, out-of-pocket spending has also been noted to increase while major spending is identified to consume by pharmaceuticals, nursing homes and medical aids. The university hospitals and municipalities that are primarily own by the state have imperative roles to play in delivering health care services that account almost half of the hospital beds (Busse & Wasem, 2013; Thomson & Reed, 2011). Sweden The Swedish healthcare system has experienced significant transformations in the preceding two decades and has accorded considerable interest due to several reasons. The healthcare system in Sweden is recognised as highly decentralised and heterogeneous spreading across 20 county councils. The healthcare coverage in Sweden is universal. All the citizens in Sweden are qualified to publically funded healthcare. Moreover, undocumented immigrants who are under the age of 18 are also entitled to avail the same right to publically funded healthcare akin children who are the permanent citizens. However, undocumented adults are eligible to avail non-subsidized care. The publically funded health system encompass public health and preventive services, primary healthcare, inpatient and outpatient hospital care, dental care for both children as well as adults, inpatient and outpatient prescription drugs, rehabilitation services, mental health care, disability support services, long-term and nursing home care and support services. The Health Care Act regulates the choices made by public or private primary care providers. The national authority is responsible for determining the benefit package for prescription drugs and dental care. At the same time, the decentralised levels by local authorities are also responsible in determining all other services (Saltman & et. al., 2007). Cost sharing plan subsists for the most of the publically funded services. Patients are required to pay US$16–31 for their every visit to primary care doctor, while for visiting to specialists to receive emergency care, they are required to pay US$31–47. The patients who are entitled to receive subsidised outpatient pharmaceuticals are require to bear the entire cost to the extent of US$ 140 per annum, while the cost extending this is subsidised at variable rates grounded on expenditure of level of out-of-pocket. The citizens are required to contribute US$140 as out-of-pocket spending for the publically funded care annually for the health care services, while US$279 for outpatient pharmaceuticals. Children are not required to contribute towards cost sharing for health services. Additionally, public funding related to health care is derived from central and local taxation. County councils as along with municipalities are entitled to charge proportional income taxes to citizens. The central government of the country delivers funding for prescription drug subsidies. Apart from this, the central government in the form of grants provides monetary support to county councils and municipalities. During the year 2009, approximately 4 per cent of the total population of the country was covered under the scheme of supplementary voluntary health insurance. Correspondingly, 80 per cent of the citizens under VHI scheme were covered by their employers. In Sweden, the three level of government including central government, county councils and municipalities can be identified to actively participate in health care. The central government is responsible for determining the objectives and regulations related to health system, while the local government is liable for determining the delivery of services according to the priorities and conditions. The most of the hospitals in Sweden are owned by county councils. The doctors employed in these hospitals are paid fixed salary (Thomson & Reed, 2011; Busse & Riesberg, 2004). Comparative Healthcare Policy from Convergence/Functionalist and Path Dependency/Institutionalist Perspectives Convergence/Functionalist Perspective Considering the development in German and Swedish health care from a comparative perspective, it can be ascertained that the healthcare system in both the countries have become similar over the previous two decades. In this regard, convergence can be seen in the German and Swedish healthcare system wherein both the countries have significantly engaged in reinforcing the role of private providers. Notably, ‘the third way’, a political philosophy propounded by Anthony Giddens can be used to establish clear convergence existing between the two healthcare system. In this regard, convergence can also been seen in the area of capital investment where increasing public-private partnerships (third way) can be observed to be extremely important towards the procurement of healthcare in both the countries (Chapman & Gunter, 2008.). Moreover, clear convergence can also be seen between the two healthcare system of Germany and Sweden where it can be ascertained that greater importance is placed on the choice of patient in order to ensure efficient mobilising of the health care resources. Nonetheless, it can be argued that the initiative towards reinforcing the principle of choice is striking at different governmental levels. Notably, the government in Germany has raised the level of patient choice primarily in terms of sickness funds, while the government in Sweden has raised the freedom of patients’ choice to primary and secondary care service providers. Besides, convergence can be seen in terms of services. In this regard, statutory health insurance (SHI) in Germany and the publicly financed health system in Sweden can be identified to cover similar health care services (Thomson & et. al., 2013; Thomson & Reed, 2011). The fair convergence can also be viewed in terms of the remuneration pattern wherein both Germany and Sweden have modernised their hospital funding with the introduction of Diagnosis Related Groups (DRGs) based system. The two DRGs system operational in Germany and Sweden are grounded on the idea that payment based on this system is more effectual than the other form of remuneration system. However, differences in health care financing can be seen in two healthcare systems of Germany and Sweden. Public funding for healthcare in Sweden is primarily made by central and local taxation, while in Germany SHI scheme is funded by obligatory contributions imposed as a percentage of gross wages. Besides, private health insurance accounts 0.2 per cent of the total health expenditure, while in Germany, the same accounts for 9.3 per cent. It can be argued that convergence pattern in Germany and Sweden is based on different set of motivations. In Germany, healthcare policy reform has been designed in the milieu of cost-containment, while healthcare reforms in Sweden has placed less prominence on this aspect (Thomson, & et. al., 2013; Thomson & Reed, 2011).Besides, projections have been made that the GDP growth in the coming decades will experience decline. According to Organisation for Economic Co-operation and Development (OECD) projections 2005–2050, spending in health and long-term-care public considerably increased almost from 7% to between 10% as a cost containment scenario, while 13% as a cost pressure scenario of GDP is projected. Correspondingly, it can be stated that these pressure will contribute towards reinforcing convergence of healthcare system of both Germany and Sweden (Figueras & et.al., 2008). According to the projections made for the EU25 prior to January 2007, it can be revealed that there will be a sharp increase in the elderly population doubling the old old-age dependency ratios. The fertility rate is anticipated to remain below natural replacement rates, while life expectancy is projected to rise almost by six years. Moreover, it is projected that immigration will not necessarily be able to address the problem of intergenerational transfers from the young to the old, mainly due to the decline experienced in the labour force, which, in the EU15, for instance, may be as high as 14% by the year 2050. As a result, some convergence can be projected in the healthcare system of Germany and Sweden (Economic Policy Committee and the European Commission, 2006). Path Dependency/Institutionalist Perspective The founding path of health care reform in the context of Germany can be related with the goal of promoting competition in terms of health insurance and healthcare delivery. The reform was expected to increase the efficiency and to improve the quality by means of incentives for better coordination of healthcare (Gütersloh, 2006). Historically, the German healthcare system was founded in the late 19th century. The earliest health insurance in Germany was developed in the medieval times with the intention of implanting solidarity. Besides, industrialisation which causes massive migration of labour from the countryside to the urban areas who were relatively suffering from inefficient health care also contributed towards introducing effective healthcare reforms in Germany. During the year 1881, Chancellor Bismarck initiated the social security system. Bismarck established the statutory health fund in the year 1883, which was subsequently followed by the foundation of ‘Accident Fund’ in 1885 and ‘Pension fund’ in 1891 (Obermann & et. al., 2013). Until the year 1885, 11 per cent of the total population was covered under 18000 sickness fund, while the average number of members contributing to this fund was less than 300. Subsequently, in the year 1892, country’s first broad regulations amid the healthcare providers and health funds were founded. Health funds were responsible to determine whom to contract under the statutory health insurance physicians. During the year 1896, the Prussian medical payment was evolved and since then, coverage continuously expanded to major portion of population. During the year 1900, Hermann Hartmann established “Hartmann-Bund”, as a medical self-help group, which served as the cornerstone for present health care system in Germany. Thus, from the historical analysis using the path dependence theoretical framework, it can be specified that today’s German healthcare system is the outcome of the combination of founding path primarily the Bismarkian, industrialisation, competition and the initiative of Hermann Hartmann (Obermann & et. al., 2013). On the other hand, the present structure of the Swedish health care system is the outcome of its long history. During the seventeenth century, urban areas in Sweden engaged physicians to deliver publically funded care. During this time, a majority of Swedish people lived in the rural areas. In order to meet the healthcare requirement of the rural populaces, the central government employed physicians for the establishment of basic medical care. The first hospital in Sweden was founded in the year 1752. By the end of the year 1765, numerous hospitals were established. Nonetheless, most of the hospitals were small in size and in number and as a result, the physicians provided healthcare services outside the hospital. During the year 1862, the foundation of county councils marked the commencement of structural development of today’s healthcare system in Sweden. Responsibilities from central government were gradually shifted to county councils. With the enactment of Hospital Act 1928, the county council legally became accountable for delivering inpatient healthcare to the citizens. In the year 1946, National Health Insurance Act was passed in which initiative towards universal coverage for physician prescription drugs, consultations and sickness compensation taken. During the year 1970, county councils were also made responsible for offering outpatient services in public hospitals as the part of “seven-crown reform.” Thus, from the historical analysis using the path dependence theoretical framework, it can be specified that today’s Swedish healthcare system is the product of the combination of founding path primarily the seven-crown reform, National Health Insurance Act 1946 and Hospital Act 1928 (Glenngård & et.al., 2005; Wright, 2004). Apart from the above stated factors, it can be affirmed that continuous medical innovation and utilisation of new technologies will impose significant impact on the health care public spending over the selected time period. Besides, increasing expectations of the customers, rising cost pressures, gaining momentum of ageing population and projected decline in the GDP are perceived to impose considerable impact on the healthcare policies of both Germany and Sweden (Economic Policy Committee and the European Commission, 2006). Conclusion Healthcare can be viewed to be one of the most controversial issues. Certain important factors such as ageing population, rapid explosion of population and constant advancement in the healthcare technologies have significantly attracted the attention of policy makers. In the present era, political leaders are much in pressure to meet the growing healthcare demands of the public. The comparative analysis of German and Swedish healthcare policy revealed certain interesting findings. Accordingly, convergence in German and Swedish healthcare system was apparent in several areas of healthcare system. The convergence was observed in terms of growing trend towards the involvement of private healthcare providers. The convergence was also seen in the healthcare funding with growing importance on public-private partnerships. From the historical analysis using the path dependence theoretical framework, it was ascertained that today’s Swedish healthcare system is the product of the combination of founding path primarily the seven-crown reform, National Health Insurance Act 1946 and Hospital Act 1928. On the other hand, in the context of German healthcare system, the founding path for the present structure was identified to rest on the Bismarkian, industrialisation, competition and the initiative of Hermann Hartmann. References Busse, R. & Riesberg, A., 2004. Health Care Systems in Transition. World Health Organization, pp. 1-227. Busse, R. & Wasem, J., 2013. The German Health Care System –Organization, Financing, Reforms, Challenges. European Observatory on Health System and Policies, pp. 1-31. Blank, R. & Burau, V., 2007. Comparative Health Policy, Palgrave. Clarke, E. & Bidgood, E., 2013. Healthcare Systems: Germany. Civitas, pp. 1-16. Chapman, C. Gunter, H., 2008. Radical Reforms: Perspectives on an Era of Educational Change. Routledge. Economic Policy Committee and the European Commission, 2006. European Economy. Special Report. Figueras, J. & et. al., 2008. Health Systems, Health and Wealth: Assessing the Case for Investing In Health Systems. Background Document. Gütersloh, B. S., 2006. Health Care Reform in Germany: Not the Big Bang. Health Policy Monitor, pp. 1-9. Glenngård, A. H., & et.al., 2005. Health Systems in Transition. World Health Organization, pp. 1-127. Marmor, T., 2005. Comparative Perspectives and Policy Learning in the World of Health Care. Journal of Comparative Policy Analysis, Vol. 7, No. 4, pp. 331-448. Obermann, K. & et. al., 2013. The German Health Care System. Der Ratgeberverlag, pp. 1-265. Saltman, R. B. & et. al., 2007. Decentralization in Health Care. European Observatory on Health Systems and Policies Series, pp. 1-293. Thomson, S. & Reed, S. J., 2011. International Profiles of Health Care Systems, 2011. The Commonwealth Fund, pp. 1-118. Thomson, S. & et. al., 2013. International Profiles of Health Care Systems, 2013. The Commonwealth Fund, pp. 6-129. Wright, B. D., 2004. Universal Access to Healthcare: Lessons from Sweden for the United States. The University of North Carolina, pp. 1-14. Bibliography Astolfi, R. & et. al., 2012. A Comparative Analysis of Health Forecasting Methods. OECD Health Working Papers, No. 59. Read More