Say Anything Blog

Recently liberals such as Senator Kent Conrad have been praising health care systems in places like Germany as a model to emulate here in America.  Conrad, specifically, has said that Germany’s model keeps prices low while not being a government-controlled system.  Here’s his own words:

Let me just conclude for my progressive friends who believe that the only answer to getting costs under control and having universal coverage is by a government-run program. I urge my colleagues to read the book by T.R. Reid, “The Healing of America.”

I had the chance to read it this weekend. He looks at the health-care systems around the world. And what he found is in many countries they have universal coverage. They contain costs effectively. They have high-quality outcomes, in fact higher than ours. They’re not government-run systems in Germany, in Japan, in Switzerland, in France, in Belgium — all of them contain costs, have universal coverage, have very high quality care and yet are not government-run systems.

Unfortunately for Conrad, Germany’s system is actually government-run.  It consists of several government-managed health insurers.  It also doesn’t contain costs.  Germans are taxed nearly 15% of their gross income for health insurance.  And it’s hardly stable.  Right now Germany’s system is in serious financial trouble that will either require a hike in premiums or a hike in taxes (there are already protests in the streets of Germany over cuts in hospital budgets), though either way it’s going to mean another pound of flesh from German citizens.

Germany’s health-care system was brought to life in 1883 by Otto von Bismarck and became the model for virtually every such state-directed national insurance plan since. Alas, the German system is starting to come apart at the financial seams. Germany’s system relies on a handful of state-supported health insurers. This week they informed the government that the system was on the brink of a financial shortfall equal to nearly $11 billion.

Pointedly, the insurers made clear that cutbacks alone won’t solve the problem. They said the government would have to consider raising premiums on the insured or, you guessed it, raise taxes. Currently, German workers pay a fixed-rate premium into the insurance scheme; that rate is now set at 14.9% of gross pay.

Once again, we see that the problem with out of control health care costs is not caused by a lack of access to health care but rather a lack of choice in the health care markets.  In Germany there is no choice when it comes to health care except among a handful of insurers all backed by the government.  And you are required to have coverage.  Instead of being a market-driven system where the insured are the customers and are responsible for negotiating their own coverage plans and paying their own premiums they have a system where by they are required to participate in what is, in fact, a government managed system of health care.

They could fix their problem with health care much as we could fix ours: Less government, more individual choice and responsibility.

Update: Here’s an interesting fact.  According to figures from the Obama administration itself the percentage of income Americans pay for health care is only about 9%:

On average, middle class families with private health insurance spend $4,400 a year on health insurance premiums, deductibles, and copayments, or 9% of their household income.

Per the article above, Germans are paying nearly 15% of their gross income for health insurance. That’s income before other taxes.

Americans are already paying less than the Germans, and the Germans are on the cusp of having to pay more.