Among our healthcare “system” choices are four major models. In my last blog we looked in depth at the Beveridge National Health Service Model.
Of the remaining three: the Bismarck Model, the National Health Insurance Model, and the Out-of-Pocket Model (1)(2), this week the discussion will focus on the second of the four models: the Bismarck Model.
The Bismarck Model: social health insurance model
Examples: Germany, Belgium, Japan, Switzerland
Relevance to the U.S.: similar to employer-based healthcare plans and some aspects of Medicaid;
Germany has a universal multi-payer healthcare system paid for by a combination of statutory health insurance officially called “sickness funds” and private health insurance, colloquially also called “private sickness funds.” (3)
This is the world’s oldest national social health insurance system, with origins dating back to Otto von Bismarck’s social legislation in the 19th century. The healthcare system is regulated by the Federal Joint Committee, a public health organization authorized to make binding regulations growing out of health reform bills passed by lawmakers, along with routine decisions regarding healthcare in Germany. The National Mandate is that health insurance is compulsory for the whole population.
Providers (the FIRST PARTY) are paid via capitation
There are three mandatory health benefits, which are co-financed by employer and employee. There are health insurance, accident insurance, and long-term care insurance. Germany has a universal multi-payer system (THIRD-PARTY PAYORS) with two main types of health insurance: statutory health insurance “sickness funds” and private sickness funds.
“Private insurance companies, which are required to be non-profit, exist for self-employed citizens and those who wish to receive elective services not covered by ‘sickness funds.’ This financial implementation makes the Bismarck model a multi-payer system.”
- Individuals do not need to worry about being uninsured or going broke from expensive health care bills.
- Compared to the US, the administrative costs of this model are much lower.
- There is little waiting time to receive primary care services.
- The focus on low costs and efficient care means there are less health care services available for citizens living in rural areas.
- Mandatory employment taxes are high in order to keep health care affordable.
- There are longer waiting times for patients to receive elective secondary and tertiary services. (4)
Next time I will discuss the National Health Insurance Model.
Keep an eye out for my soon to be published book: Earthquake: How America’s Ever-changing Healthcare System Victimizes Americans
(1) Chung, Mimi, “HEALTH CARE REFORM: LEARNING FROM OTHER MAJOR HEALTH CARE SYSTEMS,” 2 Dec. 2017, Princeton Public health Review, pphr.princeton.edu/2017/12/02/unhealthy-health-care-a-cursory-overview-of-major-health-care-systems
(2) Weisbart, ED MD, CPE, FAAFP, Chair, MO Chapter of Physicians for a National Health Program
(3) Bump, Jesse B., “The long road to universal health coverage. A century of lessons for development strategy,” PATH, 19 Oct 2010, http://brasil.campusvirtualsp.org/sites/default/files/DIM-The-Long-Road-to-UHC.pdf
(4) “International Health Care Systems Part 3: The Bismarck Model,” MSO, Science and Medicine Made Simple, 5 Aug. 2017, morningsignout.com/international-health-care-systems-part-3-the-bismarck-model/