Health Care Financing Reforms in Germany: The Case for Rethinking the Evolutionary Approach to Reforms

Abstract

Health care reform has been a perpetual issue in German politics since reunification. Reform initially focused on restructuring the health care system of the former East Germany. It has subsequently focused on questioning whether the financing of the German social health insurance (SHI) system is sustainable, in light of economic malaise that characterized the 1990s and heightened global competition. In this article, we document twelve significant attempts to reform health care financing in Germany and critically appraise them according to the principles of solidarity and subsidiarity on which SHI systems were built. While the reforms in the aggregate offered the prospect of addressing the challenges faced by the system, the modest results of the reforms and remaining deficiencies of the system underscore the limitations of the evolutionary approach to reforms. This suggests that reformers should consider a more revolutionary approach.

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