German National Health Care Started With Bismarck

According to Alice Cherbonnier, editor of the excellent Baltimore Chronicle, the insurance-based German health care system, launched in 1883 by Chancellor Otto von Bismarck, is suffering from strains not unlike our own. Young people are not paying into it and an increasing number of older people are retiring. There is some thought to cutting the system in two, providing basic guaranteed insurance to everyone, with people who want more coverage buying it. But most Germans don’t want to lose their more egalitarian system. As a report in the Wall Street Journal puts it, they consider health care to be “a basic right.”

OECD figures, Cherbonnier writes, shows that “in Germany, the per-capita annual cost of health care is $3588 per year—10.4% of their GDP. By contrast, Americans are spending 16% of GDP on health care, or $7290 per person per year—the highest of all the OECD countries.’’

Yet unlike the other OECD countries, the U.S. healthcare “system” does not cover all its citizens—not by a long shot. Why is it that the U.S. spends so much more than its peer countries, and still cannot manage to assure that all Americans have decent health care coverage?

In France, Germany, and Japan, universal health care systems are not dependent on socialism, but contain plenty of private enterprise activity, including private insurance companies. What they all include, however, is a form of regulation that makes sure everyone is covered. Prices are set by the government. And the competition among insurance companies is based not on which company can make the most profits or even offer the lowest premiums, but on which company provides the best services. Compare this to the Untied States, where we can’t even imagine “insurance company” and “best service” being used in the same sentence.

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