Learning Lessons from German Healthcare: How Universal Coverage Can Save Lives in a Pandemic

Caroline West

Research Intern

Caroline West is a research intern at AICGS for Spring 2020. She conducts research for staff and visiting fellows, writes media reports, manages the front desk, and helps organize and document events.
Caroline graduated from Johns Hopkins University in December 2019 with a Bachelor of Arts in International Studies and Sociology. While at Hopkins, her research concentrated on the impact of growing right-wing, anti-migrant movements on cultural and social integration initiatives in Germany. She is also interested in the obstacles to integration posed by ethnic and racial homogeneity, the persistence of the East-West divide in Germany, and how this divide is reflected in collective historical memory. She hopes to begin studying for a PhD in sociology in Fall 2021.

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cwest@aicgs.org

Vincent Doehr

Research Intern

Vincent Doehr is a research intern at AICGS for the spring of 2020. He assists fellows with research, manages the outreach database, operates the front desk, contributes to the AICGS website, and helps organize and document events.

Currently, Vincent is completing the fourth year of his undergraduate degree at Georgetown University’s Walsh School of Foreign Service. He studies International Politics with a concentration in international law, ethics, and institutions and a minor in German. He is currently writing a thesis investigating whether the European Union is a more effective actor than traditional nation-states in international negotiations due to its requirement of unanimity among the member states. His general research interests lie in the intersection of human rights and international institutions.

He has previously lived in Cologne and studied at the University of Trier and the Humboldt University of Berlin. He hopes to have a career in the field of international law.

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vdoehr@aicgs.org

As the COVID-19 pandemic ravages countries around the world, its effects are proving somewhat indiscriminate: both long-time workers and new hires have lost jobs across a wide variety of industries. Billions of people around the world, rich and poor alike, have been asked to stay home. And though evidence suggests that African-Americans in the United States are particularly vulnerable, largely as a result of longstanding inequalities, the virus itself chooses victims largely without regard to identity. At the same time, the differences in countries’ capacities to respond to those impacts—and what those differences will mean for individuals of different nationalities—are growing increasingly stark. In Denmark, the government has promised to cover 75 to 90 percent of wages for companies that do not lay off employees. Germany has a similar arrangement through its Kurzarbeit program. The Dutch government is even more generous, covering over 90 percent of wages for hard-hit companies, with more provisions promised for restaurants.

As American lawmakers and civilians confront the growing reality that the United States is unprepared for a crisis of this scale, new calls have emerged in the public sphere to improve the quality of healthcare coverage and to strengthen and broaden the American social safety net.

So far, the United States Congress has promised one-time stimulus checks to American workers: $1,200 for individuals earning $75,000 or less and $2,400 for married couples with a combined income of $150,000 or less. The checks, part of a $2 trillion economic relief package, will almost certainly need to be supplemented as the U.S. economy careens toward recession, facing unprecedented levels of unemployment and corporate debt. Alongside this economic crisis, the U.S. health system is increasingly overburdened, as hospitals run out of beds, ventilators, and personal protective equipment for nurses and doctors. As American lawmakers and civilians confront the growing reality that the United States is unprepared for a crisis of this scale, new calls have emerged in the public sphere to improve the quality of healthcare coverage and to strengthen and broaden the American social safety net. Yet though the coronavirus and its impacts may encourage consensus on the need for healthcare reform, there is little widespread agreement, even among members of the same party, as to how that reform should be carried out.

Comparing the Current U.S. and German Healthcare Systems

Last year, the New York Times published an article that used a complex home construction metaphor to differentiate the Democratic presidential candidates’ plans for reforming the nation’s healthcare system. Some candidates, like Joe Biden, Pete Buttigieg, Amy Klobuchar, and Beto O’Rourke, proposed a “home renovation” that would involve adding a public insurance option, increasing access to subsidies that help pay for health insurance, and reducing the maximum percentage of income that people can spend on premiums. Others, like Bernie Sanders and Elizabeth Warren, have proposed tearing down the house altogether, building one that eliminates the private insurance wing, guarantees universal coverage, and standardizes care. Both the Biden and Sanders plans would cost a great deal more money than is currently being spent on healthcare, and the Sanders plan would require a substantial increase in taxes.

Of these plans, Biden’s is probably most similar to the German healthcare system, which provides universal coverage through a multi-payer model. Based on this model, some Germans with low incomes are provided government-subsidized health insurance, while those who earn more can choose to purchase their own private health insurance. The cost of public healthcare is mostly covered by contributions from workers and their employers. Employees contribute 7.5 percent of their incomes toward a collective pool, and employers then match that contribution. Under the system, strict limits are imposed on out-of-pocket costs, and the copay on most prescription medications is about $10 or $11.

How the Systems Fare in a Pandemic

One striking difference between the German and American healthcare systems is the motivating ethos that characterizes each one. Whereas Germany’s system endorses a “one-for-all and all-for-one” approach that has its roots in the Middle Ages, the American system draws on an individualist logic that ensures, with some exceptions, that the right to care is contingent on ability to pay. And the advantages of the German approach are becoming increasingly clear as its response to the coronavirus wins praise around the world. Though the country has witnessed 135,663 cases of COVID-19 since the outbreak of the pandemic, it has seen comparatively fewer deaths: 3,867 in total, strikingly lower than the over 10,000 that have died in New York City alone.

Germany’s efficient, devolved public healthcare system, which decentralizes authority to over 400 public health offices, has enabled it to provide testing for between 300,000 and 500,000 patients per week.

Germany’s success in curbing the spread is not attributable to universal coverage alone, but having a robust healthcare system has clearly helped: hospitals in Germany have expanded their intensive care capacities to the extent that there are beds to spare for patients from Italy, France, and Spain. In some cities across the United States, hospitals have resorted to setting up tents in parking decks as “alternative care sites.” Germany’s efficient, devolved public healthcare system, which decentralizes authority to over 400 public health offices, has enabled it to provide testing for between 300,000 and 500,000 patients per week. The U.S. is testing more patients than ever before, but only just this week reached the capacity to test 145,000 people per day.

The Outlook Moving Forward

There are other factors, of course, to explain Germany’s success in curbing the spread of the coronavirus. Most analyses point to an effective early testing regimen and the adoption of widespread tracking of infections to prevent small outbreaks in particular areas. Trust in the government is also at an all-time high, and many experts credit the cool-headed, rational leadership of Chancellor Angela Merkel, herself a former physicist, for managing an effective and collective compliance with social distancing guidelines.

The United States cannot so easily replicate all these factors, and some critics have cautioned against viewing the German healthcare model as one that could be implemented with success in the United States. At the same time, this pandemic affords an opportunity for national introspection: do we want to continue living in a society where receiving potentially life-saving medical care is contingent on whether the patient can pay? If infected and hospitalized, the average uninsured American can expect to pay between $42,486 and $74,310 for their hospital stay. During ordinary times, a third of all Americans have delayed seeking care because of the price tag, with 25 percent even having delayed seeking care for “serious conditions.”

We can ask ourselves, too: do we want to be peerless among developed nations for failing to provide universal health coverage for citizens? Along with Mexico, the United States remains one of only two OECD members without universal health coverage. And in the meantime, the insured population in the United States will likely fall by millions as people lose their jobs and accompanying coverage. And a final question: could we not summon that great spirit of solidarity that has emerged in the midst of this pandemic and apply it to our institutions and services? The collective will and its power, after all, are not uniquely German. Once we are free to leave our residences and venture out into the world once more, let us hope we will revisit the “home improvement project” of healthcare reform and see fit to, at the very least, expand the house and make room for more.

The views expressed are those of the author(s) alone. They do not necessarily reflect the views of the American Institute for Contemporary German Studies.