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The evolution of some health indicators: The case of Germany

Developed countries are experiencing great gains in life expectancy along the past years owing this to improvements in living conditions, public health interventions and evolution in medical care.

In this brief comment I will focus on the particular case of Germany.

It is common in EU countries to have jointly financed health care systems. In fact, the Social Health Insurance was first established by the German politician Otto von Bismarck.[1]



In graph 1 we can observe an increase of the total expenditure on health per capita since the 70s and although this raise is more significant in Germany, it is also common to the EU12 and EU15 countries. 



In graph 2 during the period 1989-1990 (there was no data available about 1991) we can perceive a fall in the total expenditure on health (as a % of GDP) that may be due to historical reasons (the reunification of Germany may have led to allocation of funds from health to the catch-up process from Eastern to Western Germany). Still nowadays, the costs of reunification consume four percent of Germany’s gross domestic product annually.[1] 


Despite the Euro crisis, health spending has, in fact, been increasing approximately 2% from 2000 to 2010. The only exception happened between 2003 and 2004, where this indicator reached a negative value.



Germany’s health system is financed through a Publicly-Financed Scheme (SHI) (statutory health-insurance) but also by Private health insurance (PHI). The public sector is the main source of health funding in Germany.

In the graphic 4 and 5 it is noticeable a sharp increase in the public expenditure on health as a percentage of total expenditure after 1992. Nevertheless, after 1996 the weight of the public expenditure on the total expenditure (on health) has been close to 76%, which represents a decline in comparison to the previous 4 years. The introduction of the social long-term insurance provoked an increase in health expenditure leading to the high growth rates between 1994 and 1996. The modest increases in health-care spending in 1997 and 1998, are due to the benefit cuts passed in 1996 and 1997.[1]

 Since the 1990s, German health care policy has been varying. From a political perspective, the SPD and Greens favoured the citizen’s insurance, while the CDU/CSU preferred a flat-rate insurance. This citizen’s insurance would subject all individuals to health insurance contributions.[2] In Germany, a coalition of the Social Democratic Party and The Greens governed the country from 1998 to 2005.

 The health sector has been increasing its weight relatively to the overall economy (as a percentage of GDP), almost doubling its share from the 70s to 2010. The ageing trend in Germany, also observed in Europe, and the following need for an increased expenditure in long-term care costs; the lower fertility rate are aspects to take into account when interpreting this variable.


Sofia Gonçalves

[1] Wörz, Markus; Busse Reinhard; Analysing the impact of health-care systemchange in the EU member states: Germany; Department of Health Care Management, Berlin University of Technology, Germany


[2] Mosebach, Kai; Institutional change or political stalemate? Health care financing reform in Germany; London School of Economics


[1] Zweifel, Peter; Breyer, Friedrich; Kifmann, Mathias; Health Economics


Author: studentnovasbe

Master student in Nova Sbe

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