Throughout Europe, a complex political structure of government has emerged from the once simple Monarchial rule. These new systems of Government, with respect to specific nation-states, have developed domestic policies that people depend on for daily life. Of these many dependencies is the health care system. The nation-states of Europe are entitled to bring forth and confront these issues, in order to ensure a sense of safety and well being into the lives of everyday citizens.
The significance of the health care system is that it is an issue people are always trying to reform and build upon. Working alongside this idea, is the notion that other countries will develop intellectual health care systems from understanding those system already put into effect. This was the case with the German system of insured care, and the subsequent formation of the Hungarian health insurance system. In laying out the design of both systems, it is evident that the Hungarian health care system was based upon the founding principles of the German health care system.
Established by Otto von Bismarck in 1883, the German system has been continually extended to reflect the changing assortment of diseases and technological progress. Germany may be the only country in which most beneficiaries of its long-term care system and related expenditures are in community-based rather than institutional settings, according to the authors of the German study. (Moran 77) Germany’s attempt to improve coverage for long-term care reached a fever pitch in the early 1990s, when West German policymakers sought to bring means-tested, state-administered long-term care services into its universal health insurance fold.
In 1994 the country enacted a universal-coverage social insurance program for long-term care, called Soziale Pflegeversicherung, which was administered by “sickness funds,” quasi-public and quasi-private insurers regulated by the national government. Under this program, premiums are uniform-a straight 1. 7 percent of salary, split between employers and employees. (Knox 13) Benefits include extensive institutional and home care services. Informal caregivers receive up to four weeks of respite care each year, as well as a pension credit for providing high levels of unpaid services.
In 1998 alone, some 550,000 people received pension contributions as caregivers. Germany’s program has succeeded in increasing the availability of nursing home and home care services, as well as the number of home care providers, the study authors report. Program costs stayed well below original estimates and led to surpluses of nearly $5 billion. (Knox 104) The German health care system has long been viewed as a model that controls costs and provides nearly all of its citizens with coverage while also maintaining a separate private market to reflect supply and demand for health services.
In Germany, health insurance is one of the four branches of the social insurance system, the other three branches being accident insurance, retirement insurance, and unemployment insurance. Entitlements of the health system are generous and benefits include primary care, hospital care, dental care, rehabilitation, and preventive care. Approximately 88 percent of the German population is insured with one of the compulsory SHI sickness funds, while at the same time ten percent of the population is fully covered by private health insurance (PHI).
These people are employees with incomes above the measurable maximum amount and self-employed persons who have the choice of opting out of the SHI system to join a private insurer. The key participants in the German health care system are patients, who are members of statutory or private insurance funds. There are about 1,300 autonomous statutory sickness funds in Germany with 51 million members. (Stone 68) The sickness funds, at the local level, geographically cover the entire country and act as collecting tanks for people for whom statutory insurance is essential.
There are also 115 private health insurers in Germany, with 50 of these companies operating nationwide in the Association of Private Health Insurers, who represents the whole private health insurance market. Office-based physicians provide ambulatory care with resources allocated by collective bargaining between participants. The government, for this circumstance, only defines the framework for the bargaining process. The values primary to the SHI system can be characterized by three principles basic to a social market economy: self-administration, social partnership, and solidarity.
Self-administration means that health care purchasers and providers operate as self-managing private organizations under public law. The second basic principle, social partnership, assumes that both employers and employees share the weight of paying for health care. The last principle, solidarity, means that the economically stronger members of society support the weaker members. “It is difficult to imagine circumstances in which it would be politically acceptable to abandon these general principles as part of health care reform policies. ( Moran 157) By contrast, the basic principles underlying the PHI system are the following: insurance principle, principle of equivalence, and personal precaution. The insurance principle stands for a risk-related contribution rate that reflects the medical history of the insured individual. This rate is determined mainly on the basis of age and sex. Under the second principle, equivalence, the contribution rate reflects desired level of coverage without any cross-subsidization. Personal precaution means that each individual is responsible for his or her health capital and points to the relevance of lifestyle variables.
These basic principles have created a very important difference between the two types of health insurance. The PHI system has diversified payment rates, while in the SHI system, benefits are financed by an income-related payroll tax. In 1995, the average SHI contribution rate was 13. 2 percent of labor income, half paid by the employer and the other half by the employee. Individuals who voluntarily join a private insurance plan are normally not allowed to re-enter the SHI system if the cross-subsidization effects of SHI change to their advantage.
Germany draws a sharp difference between hospital-based and office-based physicians. Office-based practitioners provide the population with ambulatory care, prescribe drugs and medical aids, and serve as gatekeepers for specialist referrals and hospitalization. In 1993, more than 266,000 physicians were working in various positions in the German health care sector. The number of office-based physicians was 89,000, which indicates a physician/population ratio of 1. 18 per thousand inhabitants in the western part of Germany. Approximately 90,000 doctors were employed by hospitals. (Knox 49)
As compared with other SHI treatment spending, hospital expenditures have grown disproportionately over the last three decades. This growth is explainable by several factors: medical, technological, and economic. For example, more diseases can now be treated in hospitals, and technological progress has created new diagnosis and treatment possibilities. While examples of every type of medical application can be found in both France and Germany, the national smart card programs are currently being in forced within these respective countries. Germany chose to develop a more basic system than France’s.
It uses very inexpensive 256-byte memory cards. Since theirs took less time to develop, the German system is now fully implemented, and the entire population of nearly 80 million Germans is carrying the cards. The main concerns addressed by the German system are patient identification and the elimination of duplicate records. The data being stored on the German Health Insurance Card consists of the ID of the insurance and the insured person, his name and address, date of birth, and the status and date of expiration. This could have easily been done with magnetic stripe technology.
Instead, Germany found that chip cards were less expensive when they considered how quickly the magnetic stripe card infrastructure would have to be replaced or supplemented with the equipment necessary to communicate with smart cards. Any time you store medical information electronically there is concern about patient privacy. Even though Health Card Technologies is offering the most secure storage devices ever invented, responsibility doesn’t end there. People are accountable following the guidelines set forth in the 1993 Hastings Center Report: “Smart cards, smarter policy: medical records, privacy, and health care reform”. Moran 200) Throughout this paper, the guidelines and major aspects of the German health care system have been explained. But research has concluded that from this system, another health care system arose. This system being that of the country of Hungary. The Hungarian Constitution specifies that the state is responsible for the provision of health care services to everyone living within the territory of Hungary. Funded predominantly by the Health Insurance Fund (HIF) and the central budget, the Hungarian healthcare system provides general services to all Hungarian citizens, similar to that of the German based insurance funds.
Except for such “non-essential” services as cosmetic surgery and private hospital rooms, the health insurance system guarantees free access to all-necessary medical care. Since the early 1960’s life expectancy in Hungary has declined with the current life expectancy at birth for males at 66-67 years and for females at 74 years. ( Kornai 189) Compared to all industrialized countries, the mortality of Hungarians in all age groups is higher. The primary causes of increased morbidity and mortality are cardiovascular disease, cancers, chronic respiratory diseases, cirrhosis and suicide.
According to the World Health Organization (WHO), Hungary’s death rate due to cardiovascular disease is nearly the highest in the world. Prior to the political and economic changes in 1989, the government managed all aspects of the country’s health care sector. The Local Government Act of 1990 transferred the responsibility for the ownership, management and provision of health and social services to local governments, with additional costs coming from National Health Insurance Fund (NHIF). Public health responsibilities are carried out by the State Public Health Service and work in accordance with local governments. Organization of the provided health care services is divided into geographic districts, with every person in Hungary belonging to a specific medical district, which was also based upon that of the German system. But in recent years, the advent of new technology and the fall of communism, has led to a total reconstruction of record keeping, although Hungary has yet to produce a German-like smart card. Following the pattern of West European industrialized countries, Hungary has opted to retain a predominantly publicly funded health system with an increasing degree of private services. Privatization of health services has proceeded most rapidly in the pharmaceutical, dentistry and family physician areas. Private sector development has been faster for ambulatory and diagnostic services, and negligible for outpatient and hospital care, areas where both costs and reimbursement mechanisms have thus far remained largely within the public sector.
However, new mechanisms have been established to allow private physicians to act as independent contractors to health agencies and private companies are now providing many former in-patient services through home care services. The production and distribution of health aid products has also been fully privatized. In 1992, the Minister of Welfare’s Decree created the Family Physician Service. Previously, the system of “panel physicians” required citizens to seek medical treatment only from designated district doctors. Orosz 50) Now individuals have the freedom to choose their own family physician also showing similarities of the German system. In 1989 Hungary created the National Social Insurance Agency (NSIA), which was responsible for financing health care. The NSIA was designed to finance itself through mandatory payroll contributions. In 1992,the NSIA was split into the National Health Insurance Fund (NHIF) and the National Pension Fund. The establishment of these funds removed the control of social security from the national government. The Social Security Funds’ are based on mandatory payroll contributions.
Employers are required to contribute 39% of employee wages: 15% for health insurance and 24% for pensions. The employee contributes an additional 10% to the system: 4% for health and 6% for pensions. (Orosz 36) This clearly shows that the system of employee and employer wage contributions is designed after that of the Germans. The Government’s long-term health care policy is created to sustain public funds while creating private health care service opportunities, although privatization of entire hospitals is not anticipated to occur anytime soon.
Hungary’s previous health care system relied on institutional care. Emphasis was placed on the development of large hospitals and university clinics. Under the previous system hospital budgets were determined by bed occupancy rates. Therefore, there was no incentive to release patients on a medically timely basis. In 1993 new methods of paying health facilities were introduced. For inpatient care payment is based on the United States, while a German-style “point” system is used for determining payment for outpatient care based on the relative tariff fee-for-service schedule. Moghadam 103) Accordingly, hospitals receive funding from the HIF on the basis of patient volume and types of treatment offered, regardless of the length of time of patient stays. Currently there are 38 physicians and 80 hospital beds per 10,000 people. The averages for EU countries, where per capita budgets for health care is three times higher than Hungary’s, are 25 physicians and 70 beds per 10,000 Thus physicians are encouraged to shorten in-patient stays. This has created a growing need for outpatient and in-home health care services.
Through conclusive research it is evident that European countries have based their own national domestic policies after other significant evolving societies. This is something that marks great progress for trans-national cooperation. Europe has often been criticized for its bloody rivers, but with the advent of new policies countries have begun to duplicate aspects of other countries policies. The information shown from the structure of the Hungarian health care system is what the original Treaty of Rome intended, when the European Economic Commission was formed.
That the agreement between two countries was admirable is what the treaty was designed for. Because of the advent of new technology, people around the world are becoming more health conscious. This means that people are beginning to pay attention to ways in which they can receive insurance on their health. Germany has proven to be a leading model healthcare system. Prior to being a non-fascist state Germans were used to a descent standard of welfare services. Coming of age in modern society, Hungary was able to create a modern health system, using essential pillars from that of the German system.
By creating a fund that self sustains itself, by contributions from both employers and employees, both countries provide health care to all of its citizens. In addition both health care systems are divided into geographical regions, which allow citizens to choose their doctor because of large database systems. It has clearly been shown that Germany has established a health care system in such unique design that other countries such as Hungary have based their current health care systems upon its design.