Question

Germany has health insurance coverage approximating 100% of the population and spends far less on health care both in absolute terms and relative to GDP. What lessons, if any, could the US learn from Germany to extend health insurance coverage and lower costs? Use as much economic theory/analysis as possible

Answer 1

it’s fair to say the U.S. is moving in the direction of systems like Germany’s—multi-payer, compulsory, employer-based, highly regulated, and fee-for-service. In fact, Germany shares many healthcare woes with the U.S., and it’s tried some intriguing solutions that Americans might look to, as well.

There are lots of things US can learn from america like, Germany is in the middle of the pack among developed countries when it comes to healthcare spending per capita, according to a report released by the Commonwealth Fund last fall.

Germany manages to put its health-care dollars to relatively good use: For each $100 it spends on healthcare, it extends life by about four months, according to a recent analysis in the American Journal of Public Health. In the U.S., one of the worst-performing nations in the ranking, each $100 spent on healthcare resulted in only a couple of extra weeks of longevity.

certain U.S. states have tried a more German strategy, attempting to keep costs low by setting prices across the board. Maryland, for example, has been regulating how much all of the state’s hospitals can charge since 1977. A 2009 study published in Health Affairs found that we would have saved $2 trillion if the entire country’s health costs had grown at the same rate as Maryland’s over the past three decades.

Now, Maryland is going a step further still, having just launched a plan to cap the amount each hospital can spend, total, each year. The state's hospital spending growth will be limited to 3.58 percent for the next five years.