This paper presents a structured survey of the West German health care and health insurance system, and analyzes major developments of current German health policy. In order to make the analysis more accessible to a largely American audience, brief historical remarks, comparisons with U.S. experience, and considerable data and tabular information are provided.

The German statutory health insurance scheme is known as a very comprehensive and generous one. However, under the pressure from rapidly expanding health care expenditures and a severe economic recession, the German governments under Helmut Schmidt and his successor Helmut Kohl imposed a number of cost-containment measures, namely a change in the mode of remuneration for physician services, certain regulations of the drug market, and increased cost-sharing. Cost-sharing is especially favored by the new conservative-liberal government. The article concludes with a summary of striking similarities between the American and German health care schemes, and an outlook on proposals for reform which are currently under investigation by the German government.

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