Do European and British patients have different expectations of their healthcare systems? Of course they do. Here is a small but perhaps not entirely unrepresentative example of what happens when expectations shaped by one system encounter the service standards of the other.
A British friend had recently moved to Germany and had taken out statutory health insurance, as is the law when setting up one’s main residence in the country. She needed some work done on her teeth, so called a dentist who had been recommended to her and stressed the urgency of getting an appointment “as soon as possible”. The receptionist offered her one on the same day. Being used to week-long waiting times at the very least, the caller was blindsided and had to admit she couldn’t make it at such short notice. She then got an appointment for the coming week.
Obviously, not every medical specialist in Germany has such marvellous availability. Appointments with lung doctors, already in demand before the coronavirus pandemic, are now like gold dust; short-notice slots at clinics are usually reserved for privately insured patients. The same is true for psychotherapy. But if the dentistry anecdote shows anything, it’s this: if someone uses the same tactics they would deploy in a demand-driven system like the UK’s National Health Service—that is, making their request seem urgent in order to get a better shot at partaking of its dwindling resources—they will more often than not be quickly accommodated in the German system.
While living in the UK between 2004 and 2018, I learned quite a lot about how to make my demands for care more urgent. Whether the children had a rash, someone had a cough that would not go away, or my meniscus was flaring up, I would queue outside the GP surgery in north London after the morning school run and try to nab a same-day appointment. If the receptionist told me that nothing was available, I asked again a few times, urging her to ring me immediately if a slot became available after all. Sometimes it worked, sometimes it did not.
The necessity of going through a GP before visiting a hospital or outpatient clinic to see a specialist, if referred, took some getting used to. In Germany, as elsewhere in Europe, specialists have their own surgeries and you can make an appointment with them directly, which indisputably speeds up the process. But I got used to the UK procedure relatively quickly. I accepted it, even embraced it. My wife and I were quite invested in the concept of the NHS: this last remaining great social democratic achievement of the postwar years, founded on egalitarianism and a free-at-the-point-of-delivery approach. We understood why it was one of those British institutions that everyone grumbles about but is still proud of.
The European social insurance model sounds like an enhanced version of the NHS—but the devil is in the detail
It was actually the main reason my wife Melanie and I moved to the UK in 2004. After completing a mission for Médecins Sans Frontières in South Sudan, Melanie wanted to gain more experience abroad instead of going straight back into the German system. She started as a staff grade practitioner in community paediatrics at Camden and Islington Primary Care Trust. I became a UK correspondent for the German broadsheet daily Süddeutsche Zeitung.
In the following years, Melanie worked her way up to consultant level at various London hospitals. By the time we left the UK in 2018, she had become a paediatric consultant and designated doctor for child protection in a north London borough. Melanie remembers the flat hierarchies in the NHS and the generally excellent training—in which senior doctors saw passing on their experience to younger colleagues as an integral part of their work—as second to none.
Our three sons were born in London, in 2004, 2007 and 2010. I will never forget the great care we received at the Whittington Hospital in Archway during a protracted and exhausting labour in October 2004, which lasted 42 hours. The calm and friendly atmosphere, as well as the confident professionalism I encountered, permanently shaped my view of the NHS. During the next two difficult births, the medical teams also did exactly the right thing at the right time.
The fact that my wife could then continue her training in a so-called “flexi post”, working part-time, made it much easier for both of us to keep working and share childcare duties. This was another feature of working in the NHS that compared favourably with the rigid German system, which is still not all that accommodating towards health professionals with small children. In short, we got to know the NHS both from the inside and from the patient’s perspective.
As such, it was fascinating but not at all surprising to see how many people in Britain reacted to the notorious Vote Leave slogan, “We send the EU £350 million a week—let’s fund our NHS instead”, emblazoned on the Brexit campaign bus in 2016. The claim was disingenuous, but drew on the fact that the public were willing to invest more money in the health system, a testament to how attached the British people were to the NHS.
Recent figures show that the number of NHS users who doubt the health service’s ability to care for them has risen. As the Guardian reported in December 2021, when British residents were asked “how confident are you, if at all, in the NHS’s ability to give you the care you need?”, 26 per cent said they were not confident; 15 per cent believed the NHS was not coping well with the challenges of the Covid pandemic; and a whopping 41 per cent believed that it was not coping well with providing other services. The reasons given were “long delays for operations and GP appointments, Covid’s disruption to normal NHS services and longstanding staff shortages.” Recent stories of interminable ambulance response times and emergency care taking place in corridors can only have harmed confidence further.
Conservative voices are again calling for the nationalised service to be replaced wholesale by a different healthcare system. In an article for the Times, journalist Melanie Phillips called the NHS “an institution on its last legs”. Although she praised the “magnificent” staff, she cited health professionals who said that patients might have to be charged to cover the cost of medical equipment such as hearing aids and walking devices, or GP services. “These suggestions would destroy the founding principle of the NHS as being free at the point of use,” Phillips writes. “Yet such is the grip of the institution, they are couched as proposals to rescue it.” She calls the NHS a financial “black hole” and concludes that “the status quo is simply no longer an option”.
The solution that Phillips proposes— the systemic sword for this Gordian Knot of an NHS that is, in her words “fundamentally, existentially bust”—is a switch to an insurance-based system. “This is not a US-style private health system but European social insurance. This delivers goals on which the NHS so grievously fails: access to healthcare and higher standards for all,” she writes. She also praises market forces being put to good use here: “Competition between healthcare providers drives up standards.”
Former Conservative party chairman and Brexit secretary David Davis took the same line in a recent article for the Daily Telegraph. He praised the “professionalism” of NHS staff but wrote that “the ramshackle nature of the organisation is clear for all to see.” He criticised the NHS’s “ineffective bureaucracy”, “huge” budget that is “eating up a staggering 12 per cent of GDP”, and poor health outcomes in relation to comparable European countries for people suffering from cancer or heart attacks. For Davis, the only option is to replace the NHS with something akin to “the social insurance systems of Europe” that “offer universal coverage, are often funded by annual premiums that resemble ring-fenced taxes, and, crucially, provide care that is free at the point of use.”
All of this sounds wonderful, like an enhanced version of the still-beloved NHS—but the devil is in the detail. The claim that the European insurance model also offers care free at the point of delivery, for example, may technically be correct: to access care, you hand your health card to the receptionist, who scans it and thus passes the cost of everything covered by your health insurance policy on to the company who issued you the card. But the way statutory health insurance is funded is quite different from the NHS model; it is also quite complex because, like many institutions in a federally structured state like Germany, it is less centralised than the NHS.
Germany is the birthplace of social insurance: the “Iron Chancellor” Otto von Bismarck introduced a system of statutory social insurance in 1883, and it has remained one of the few constants in Germany’s eventful history since. It is the bedrock of social security in the country, regulated by law and organised by self-governing insurance institutions. It covers statutory health insurance, long-term social care, pensions, unemployment and statutory accident insurance. It is therefore a useful benchmark against which the NHS can be compared, because it was the blueprint for many similar insurance systems around the world.
Their fundamental principle—and here the similarities with the NHS are in fact strong—is solidarity: those paying into insurance schemes can claim financial benefits in the event of an accident, illness or loss of job, while providing for other contributors, too. Social insurance is compulsory for anyone in gainful employment, though exceptions apply to civil servants and people in part-time work with low incomes, among others.
The cost of someone’s social security contributions depends on their income, with a portion of their monthly gross salary reserved for each kind of insurance— currently 18.6 per cent for pension insurance and 14.6 per cent for health insurance. One half of this total contribution is paid by the employer, the other by the employee; contributions are automatically deducted from the monthly pay packet. It works largely as a “pay-as-you-go system”: contributions that are paid in are paid out again directly as benefits to others, so that nothing is saved apart from a reserve.
All contributions for statutory health insurance (SHI) are collected by one of the approximately 550 SHI providers. They act as corporations under public law, so although they are under state supervision, they are organisationally and financially independent. Contributions flow into a large pot called the health fund, before being redistributed proportionately to all SHI providers in Germany. Each uses its share to cover the health provisions of customers, including their dependent partners and their underage children. The federal government pays a tax-financed subsidy into the health fund, which has been fixed since 2017 at €14.5bn (£12.6bn) per year, only a fraction of the whole pot.
Doom-laden predictions of imminent health system collapse aren’t an exclusively British phenomenon
In 2021, German health expenditure was higher than ever before, partly because of coronavirus, totalling €466bn. That is the equivalent of £403bn, £126bn more than the UK’s healthcare expenditure in the same year, and adds up to around £500 more per year per person.
The tendency in Germany goes towards oversupply: when in doubt, many doctors will prescribe an X-ray, antibiotics or a tonsillectomy when these might not be necessary or even helpful. In the NHS, GPs are gatekeepers and so tend to delay expensive screenings or treatments unless they are urgent. For example, when I had trouble with my knee in Germany a while ago, I saw an orthopaedic specialist who swiftly referred me to a radiologist for an MRI scan; no need to check with my SHI provider.
When we still lived in London, the father of my son’s schoolmates had terrible back pain. His GP saw him several times and prescribed painkillers that didn’t really help, but never referred him. In the end, he paid privately for an MRI scan, which revealed that he had a slipped disc. Turning up at the GP surgery with the scan, he was immediately referred to a neurosurgeon and had back surgery within a couple of days. NHS patients are used to having to kickstart the system in this way. In Germany, the sense of being entitled to “optimal care”, which often means treatment when none might be required, is much stronger, leading to unnecessary treatments that drive up costs. Neither is ideal.
Since 1996, people with statutory health insurance have been able to choose which provider they want. In order to compete with one another—an element of the German system praised by Melanie Phillips—each SHI provider offers a different package of voluntary supplementary benefits beyond the legally prescribed catalogue. However, such competition is reined in by a compensation system (the so-called Risikostrukturausgleich), through which SHI providers receive extra money, on top of a flat rate, for every old or ill customer they cover. They are therefore incentivised not to vie only for ones who are young, healthy and cheap to insure. This is not quite the kind of market-driven system that Phillips seems to envisage.
Someone’s health and youth are much more decisive if they opt for private health insurance (PHI). As mentioned earlier, the system is not as egalitarian as it may appear: the German language even has its own compound, Zweiklassenmedizin, to describe the two tiers into which healthcare is often divided.
Civil servants and others who can afford it opt for private health insurance. PHI providers do not participate in the health fund and don’t get a share of the contributions citizens pay through social security. Instead, the decisive factor they use to calculate someone’s premium is not their income, but their age, health and which services they require when they join. The younger you are when joining, the cheaper your premiums.
If you have private insurance, you pay bills directly with the doctor and then claim your money back from the insurance company. This option is particularly attractive for civil servants because their employer, the state, pays 50 to 70 per cent of the costs and they then only have to settle the remaining amount with the insurance provider. PHI offers many privileges, including an appointment at short notice when a specialist’s surgery appears fully booked, or guaranteed consultant treatment and a single room if you need to go to hospital. Doctors can charge two-and-a-half times as much for privately insured patients as they do for SHI ones.
So, if the UK took on the SHI model, ideally without watering it down by adding a private element, would this solve the current crisis?
The challenges of replacing the NHS—a system directly financed through taxes with no additional direct levies for health provision—with an insurance system like the one in Germany would be immense. If nothing else, it would require a complete mentality shift for employers and employees to agree to pay into something like the health fund. How likely is it that all employers, from the biggest companies down to small traders, would be convinced to stump up for these extra costs? The same goes for workers, who would effectively see a loss in their direct earnings unless employers were willing to supplement wages by an amount equal to their employees’ healthcare costs.
These extra costs would not be perceived as “ring-fenced taxes”, as David Davis would have it, but as compulsory levies on top, not instead, of normal tax payments. Alternatively, the government of the day could reduce the overall tax burden by the amount of health insurance costs, but this would mean that all governments, irrespective of their political hue, would have to agree to a reduction in tax revenue in perpetuity. Considering the wildly varying approaches to tax policy, this would be a big ask of a party system that is far less willing to compromise than the German one, in which parties are used to working together in coalitions.
Even if such a switch could be implemented, the German insurance model does not solve the underlying challenges facing healthcare providers around Europe. Doom-laden predictions of imminent health system collapse aren’t an exclusively British phenomenon: there is a marked shortage of specialist staff in Germany, as in the UK; an increasing percentage of Germany’s €1.28bn (£1.1bn) daily healthcare costs must now be borne by private households; and some SHI providers have been cutting their benefits, which means that insured people have to pay for many services out of their own pocket. This then drives up their expectations as they feel entitled to get value for the extra money they are asked to pay.
The demographic changes of the country’s ageing population put some pressure on services, though to a lesser degree than is often assumed. Instead, new, expensive products are the biggest cost driver. A study by the Bertelsmann Foundation estimated in 2019, before the pandemic, that the increase in quantity and price of medical services could contribute to a deficit of up to €50bn (£43bn) for SHI providers by 2040. The only way to counteract this would be a significant rise in contribution rates.
The UK could end up with a very bad case of ‘Zweiklassenmedizin’, a two-tier system
For the sake of argument, let’s assume that all these caveats would not deter the UK from changing to an insurance system: is it likely that the result would actually be a “European” model? Wouldn’t the more likely outcome be the gradual privatisation of the NHS until it ended up resembling the dreaded American model far more than the German one?
The agenda that the Conservative party has been pursuing for at least a decade seems to indicate that it would. One big step in this direction was former health secretary Andrew Lansley’s decision in 2012 to force health bodies in England to put contracts for services out to tender. As a result, billions of pounds of taxpayers’ money flowed to private companies for the treatment of NHS patients.
According to an analysis by the University of Oxford published in the Lancet last year, “the privatisation of the NHS in England, through the outsourcing of services to for-profit companies, consistently increased” after Lansley’s intervention. This corresponded with significantly increased rates of treatable mortality—people dying when they could have been helped—potentially as a result of a decline in the quality of healthcare services.
In other words, the shift towards a different health provision in the UK has already begun, by stealth. Politicians who declare that the NHS is flatlining will incentivise ever more people who can afford to opt out to do so, and pay for private treatment instead. If support for the NHS dwindles further, the government would see it as licence to further cut spending, citing “value for money”, rather than investing to revive it.
Rather than continuing to pay private health providers with tax money, such as financing privatised GP surgeries through NHS funds, the government will no doubt eventually make a proposition to cut taxes, “freeing” the resulting taxpayers’ savings for private, customised direct health expenditure. Cutting taxes and letting the market regulate everything is what the Conservatives are about, after all. This would leave those patients who cannot afford to pay for private alternatives to settle for a massively scaled-down NHS service and receive minimal to no care. In short, the UK would end up with a very bad case of Zweiklassenmedizin.
It is true that I sometimes yearned for more efficiency and a swifter, more streamlined treatment when I was an NHS patient. However, I never thought that replacing a fundamentally egalitarian, nationalised healthcare system with a German-style insurance system would be a panacea. Neither, incidentally, did many of the fellow Europeans living in the UK and working in the NHS that I discussed this with after the referendum. We were all invested in this system. A major factor in the staff shortages presently ravaging the NHS is a marked downturn in the levels of recruitment from the EU after Brexit, especially for nurses. Both the NHS Confederation and Simon Stevens, then the chief executive of NHS England, raised concerns during the referendum campaign that this would almost certainly happen in the event of a Leave vote, but to no avail.
The NHS’s greatest asset is still its staff, whom even its greatest detractors dare not denigrate. The state should pay them properly, in particular nurses. But instead of replacing the whole system to achieve this, as some seem so keen to do, the government should pursue a long-term reform of NHS management and administration structures.
As part of those reforms, the health system should be robustly shielded by regulation, preventing party-political meddling. Centralisation and the guidelines set out by the National Institute for Health and Care Excellence, which make the system slow and cumbersome, should be reduced and relaxed. Care should be better integrated, with GPs working more closely with specialists so that patients get quicker access to specialist treatment. This could be achieved within a system of polyclinics, for example, where doctors from different specialisms come together in a joint surgery that includes diagnostics and a pharmacy, taking the pressure off hospitals.
When reading or listening to calls for an “overstretched, outdated system” to be replaced wholesale, one must always consider what the agenda behind them is. Transplanting other systems is extremely difficult and in no way guarantees success. The NHS is under strain, but its existence is still an achievement; people still value the care it provides. The solution is not to replace it, but to maintain and improve it.
