Why Hospital Supplementary Insurance is Essential for Publicly Insured Individuals?

Hospital supplementary insurance isn’t just an add-on—it’s becoming an important piece of smart healthcare planning. As per CW1, by bridging the gap between basic coverage and high-quality care, it enables patients to prioritize their health without fear of financial worries.

 

 

Hospital supplementary insurance, known as “Krankenhauszusatzversicherung” is gaining traction among Germans. In 2021, about 12.86 million people in German-speaking households had this type of coverage. It's designed to enhance the standard public health insurance, offering benefits like private room options, treatment by chief physicians, and a wider choice of hospitals. 

 

This insurance fills the gap between basic public coverage and more comprehensive care, allowing individuals to customize their healthcare experience. While public insurance in Germany provides solid coverage, this supplementary option  is attractive to those seeking additional comfort, quicker access to certain treatments, or have specific health needs that may require extended hospital stays.

 

 

Advantages of Hospital Supplementary Insurance

 

 

Hospital supplementary insurance provides several key benefits:

 

• Free choice of hospital: Insured individuals can decide which hospital with public insurance approval they want to be treated in.

• Chief physician treatment: The insurance allows for treatment by a chief physician or specialist. 

• Comfortable accommodation: Depending on the tariff, accommodation in a single or double room is possible.

• Cost coverage: The insurance typically covers the costs for elective services that exceed the standard benefits of statutory health insurance.

 

Overview of Supplementary Hospital Insurance in Germany

 

 

Supplementary hospital insurance (private Zusatzversicherung) is an optional coverage that Germans can purchase in addition to their statutory health insurance. It provides extra benefits and services during hospital stays that aren't covered by the standard public insurance.

 

 

Key Statistics

 

 

• Adoption rate: As of 2022, approximately 26.4% of Germans had some form of supplementary hospital insurance.

• Market size: The supplementary health insurance market in Germany was valued at around €9.2 billion in 2021.

• Growth trend: The number of people with supplementary hospital insurance has been steadily increasing, with a growth rate of about 3-4% annually over the past decade.

 

 

Significant Role

 

 

• Enhanced comfort: About 75% of policyholders choose coverage for private or semi-private room accommodations.

• Access to chief physicians: Approximately 80% of supplementary policies include treatment by senior doctors or specialists.

• Reduced waiting times: Policyholders often experience 30-50% shorter waiting times for elective procedures compared to those with only statutory insurance.

• Coverage gaps: Supplementary insurance often covers services not included in statutory plans, such as certain dental procedures or alternative medicine treatments.

 

 

Impact on Healthcare System

 

 

• Financial relief: Supplementary insurance helps reduce the burden on the public healthcare system by covering additional costs.

• Quality of care: The option for private treatment can lead to improved healthcare quality and patient satisfaction.

• Healthcare inequality: Critics argue that supplementary insurance may create a two-tiered healthcare system, potentially leading to disparities in care quality.

 

 

Statistical Relevance

 

 

Supplementary hospital insurance plays a significant role in healthcare, as evidenced by statistical data. In Germany, approximately one in 12 adults experiences an accident annually, with 18% of these accidents resulting in hospitalization. The risk is higher for individuals up to 27 years old. According to the Federal Statistical Office of Germany (Destatis), there were about 16.6 million inpatient hospital cases in Germany in 2020, despite a decrease due to the COVID-19 pandemic.

 

In Switzerland, enrollment in supplementary hospital insurance has been declining, with premiums for private and semi-private hospital insurance increasing by 46-55% between 1999 and 2017. The likelihood of having this insurance increases with age, particularly for those over 55, and is associated with higher socioeconomic status. However, the insurance faces challenges such as rising premiums and decreasing marginal benefits compared to basic mandatory insurance, necessitating innovation in the sector to maintain its value proposition.

 

 

Tariff Options and Scope of Services

 

Insurance companies offer various tariff options that differ in their scope of services. For example, uniVersa Insurance offers three tariffs:

 

• uni-SZ II
• uni-SZ II plus
• uni-SZ

 

These tariffs differ in aspects such as accommodation (single or double room), deductibles, and additional services such as cost coverage for outpatient surgeries.

 

 

Evaluation and Comparison of Tariffs

 

 

To compare the quality and performance of various hospital supplementary tariffs, there are special ratings. The M&M Rating Krankenhauszusatz evaluates tariffs based on various criteria, including:

 

• Waiver of the ordinary right of termination
• Inclusion of chief physician treatment
• Accommodation in single or double rooms
• Services beyond the 2.3-fold and 3.5-fold maximum standard rates of the Fee Schedule for Physicians (GOÄ)

 

Market Development and Trends

 

 

The German health insurance market is growing, with projected annual growth of 3.43% leading to a market volume of €63.89 billion by 2028. The system is characterized by a dual structure: statutory health insurance (SHI) covers 86% of the population, while private health insurance (PHI) accounts for 8.4% of total health expenditures. As of 2019, there were 109 SHI sickness funds and 41 PHI companies. Supplementary insurance has seen significant growth, with hospital insurance policies increasing from 7.91 million in 2011 to 8.73 million in 2020.

 

Germany's health spending is high, at $8,011 per capita and 12.7% of GDP. The system faces challenges, including an aging population and rising costs, but maintains high satisfaction rates, with 85% of people satisfied with healthcare availability. The market continues to evolve, balancing universal coverage with sustainability concerns in a complex regulatory environment.

 

 

Impact on Healthcare Quality

 

 

The German healthcare system provides universal coverage, with 87% of the population covered by statutory health insurance and 11% by private insurance. It offers high-quality care in many areas, with lower 30-day mortality rates after stroke (6.6%) compared to the OECD average (7.8%). Germany also has more healthcare resources than many countries, with 4.5 doctors, 12.0 nurses, and 7.8 hospital beds per 1,000 people. The country spends $8,011 per capita on healthcare, which is 12.7% of its GDP. Life expectancy in Germany is 80.8 years, slightly above the OECD average.

 

However, there are areas for improvement in the German healthcare system. Only 60.6% of privately insured individuals perceive care coordination as good, while 24.2% report receiving unnecessary health services, and 14.4% suspect medical errors in their care. Patient satisfaction with the health system has improved over time, increasing from about 25% in 2002-2004 to over 40% in 2014-2015. There are also disparities in care quality between public and private insurance, with privately insured patients often receiving more intensive treatment and longer hospital stays.

 

Legal Framework

 

 

While hospital supplementary insurance provides additional benefits, it operates within the framework of German healthcare law that ensures comprehensive coverage and regulates both public and private insurance. The German Social Code (Sozialgesetzbuch) regulates the basic principles of health insurance, while the Insurance Contract Act (Versicherungsvertragsgesetz) governs the specifics of private insurance contracts.

 

 

Here are some key aspects of the legal structure:

 

 

1. Statutory Health Insurance (SHI)

 

Governed by the Social Code Book V, covers approximately 88% of the population. It is mandatory for most employees and provides comprehensive healthcare benefits based on a solidarity principle. The system involves three main stakeholders: insurers (sickness funds), healthcare providers, and patients, each with specific rights and obligations. SHI is primarily funded through income-based contributions shared between employees and employers, with additional government subsidies. The system ensures universal access to a wide range of medical services, including preventive care, hospital treatment, and prescription drugs. Family members are typically covered at no extra cost. While mandatory for those earning below a certain threshold, individuals with higher incomes can opt for private insurance instead. 
 

 

2. Private Health Insurance (PHI)

 

Regulated by the Insurance Contract Act (Versicherungsvertragsgesetz), covers approximately 10% of the population. It is available to high-income earners (those earning above €69,300 annually as of 2024), self-employed individuals, civil servants, and certain students. PHI offers customizable coverage, wider healthcare provider networks, and often faster access to services. Premiums for a healthy 30-year-old typically range from €100 to €300 per month, with employers contributing up to €422 monthly for employed individuals. PHI provides comprehensive coverage, including inpatient and outpatient care, medications, dental, and vision care. While offering benefits like no-claims bonuses and stable premiums (historically increasing about 2% annually), PHI requires individual policies for family members and involves medical underwriting. There are approximately 40 private health insurance companies in Germany, offering various plans to suit different needs and budgets.
 

 

3. Federal Joint Committee

 

Gemeinsamer Bundesausschuss or G-BA established in 2004, is Germany's highest decision-making body in healthcare self-governance. It comprises 13 voting members: 5 from health insurance funds, 2 from physicians' associations, 2 from the hospital federation, 1 from dentists' associations, and 3 impartial members, including the chairperson. Additionally, 5 non-voting patient representatives participate in discussions. The G-BA determines the benefit catalogue for over 74 million statutorily insured individuals, conducts quality assurance, and assesses new medications. Its decisions impact approximately 70 million people in Germany. Operating under the German Social Code, Book Five (SGB V), and supervised by the Federal Ministry of Health, the G-BA issues legally binding directives for publicly insured persons, healthcare providers, and payers. 
 

 

4. Patient Rights Act ()

 

Patientenrechtegesetz enacted on February 26, 2013, significantly strengthened patient rights in Germany, affecting approximately 70 million people under statutory health insurance. This law codified existing case law and guidelines, introducing the concept of a "treatment contract" into the German Civil Code. Key provisions include enhanced requirements for informed consent, mandatory disclosure of treatment information, explicit rights for patients to access their medical records, and clarification of physicians' duty to report recognizable treatment errors. The act applies to all healthcare professionals and aims to empower patients, provide legal certainty, and improve quality assurance in healthcare delivery. It also addressed the burden of proof in medical malpractice cases. Ten years after its implementation, as of 2023, there have been discussions about further strengthening the law, particularly regarding support for patients in cases of treatment errors.
 

 

5. Digital Health Act (E-Health-Gesetz)

 

The Digital Health Act (E-Health-Gesetz), enacted on January 1, 2016, was a landmark legislation in Germany aimed at promoting digital technologies in healthcare. It mandated the nationwide rollout of electronic health cards and established a framework for a secure telematics infrastructure. The act set key deadlines: doctors and dentists were required to connect to the telematics infrastructure by July 1, 2018, hospitals by January 1, 2019, and electronic patient records were to be introduced by January 1, 2021. The legislation also laid groundwork for e-prescriptions and expanded reimbursable telehealth services. To encourage adoption, financial incentives were offered, along with penalties for non-compliance. The act affected all statutory health insurance providers and their approximately 70 million insured individuals. While facing initial challenges in adoption rates and data security concerns, this act set the foundation for subsequent digital health initiatives in Germany, including the Digital Healthcare Act of 2019 and the Patient Data Protection Act of 2020.

 

 

6. Hospital Structural Reform Act (Krankenhausstrukturgesetz)

 

Krankenhausstrukturgesetz implemented on January 1, 2016, aimed to improve the efficiency and quality of hospital care in Germany. Key provisions included introducing quality as a criterion for hospital planning and reimbursement, mandating regular quality reports, and establishing a structural fund of €500 million annually from 2016 to 2018, totaling €1.5 billion. This fund, matched by federal states, brought the total investment to €3 billion. The act introduced quality-related adjustments to the DRG reimbursement system, measures to improve nurse staffing, and promoted specialized centers for complex treatments. It also strengthened hospitals' role in emergency care. While facing challenges such as concerns over rural hospital closures, the act significantly impacted hospital operations, planning, and financing in Germany, affecting the country's approximately 1,900 hospitals and their 19.4 million annual inpatient cases (as of 2016 data).
 

 

7. Data Protection

 

Data protection in Germany is primarily governed by the Federal Data Protection Act (BDSG), which came into force on May 25, 2018, aligning with the EU's GDPR. The BDSG, along with specific patient data protection regulations, provides protection for personal and health information. It applies to both public and private entities processing personal data, with special provisions for sensitive health data. The act establishes rights for data subjects, obligations for data controllers and processors, and empowers supervisory authorities to monitor compliance and impose fines for violations. In February 2024, the German Federal Cabinet approved draft amendments to the BDSG, addressing issues identified in a 2021 evaluation. These proposed changes include institutionalizing the Data Protection Conference (DSK), simplifying supervision for joint controllers in scientific research, clarifying data subject access rights, and introducing a new legal basis for scoring. While specific fine amounts are not standardized, GDPR-aligned penalties can reach up to €20 million or 4% of global annual turnover, whichever is higher, for severe violations.
 

 

8. Medical Devices Act (MPG)

 

Medizinproduktegesetz or MPG in Germany, first enacted in 1994 and  updated in 2021 to align with the European Medical Device Regulation (MDR), regulates the safety, performance, and quality of medical devices. It establishes a risk-based classification system for devices (Classes I, IIa, IIb, and III) and mandates CE marking for market access. The act is implemented by key regulatory bodies including the Federal Institute for Drugs and Medical Devices (BfArM), the Paul Ehrlich Institute (PEI), and the German Institute of Medical Documentation and Information (DIMDI). Recent changes include stricter clinical evidence requirements, enhanced traceability through Unique Device Identification (UDI), and increased post-market surveillance. While specific numerical data varies annually, as of 2021, Germany's medical technology market was valued at approximately €34.5 billion, with over 200,000 different medical devices registered for use in the country. The act impacts all 1,900+ hospitals and 19,000+ medical practices in Germany, ensuring they use only compliant devices and report adverse incidents.
 

 

9. Drug Pricing and Reimbursement

 

Recent changes in Germany's drug pricing and reimbursement system aim to balance innovation incentives with cost containment. Key developments include incentives for critical pediatric medicines and reserve antibiotics, and a reduction of the free pricing period for new drugs from 12 to 6 months. The AMNOG process remains central, with early benefit assessments by the Federal Joint Committee (G-BA) determining price negotiations. Germany has introduced value-based pricing agreements, promoted biosimilar uptake, and refined international price referencing. A fast-track process for digital health applications (DiGA) has been established. These changes affect the €46.4 billion German pharmaceutical market (2021 data). The reduction in the free pricing period is expected to impact all new drugs entering the market, potentially affecting hundreds of new medications annually. The biosimilar promotion efforts aim to increase the current 59% biosimilar market share (as of 2021) in eligible therapeutic areas. These measures collectively influence pricing and access for over 100,000 pharmaceutical products available in Germany, impacting the 73 million individuals covered by statutory health insurance.
 

 

10. Telemedicine and Digital Health Applications (DiGAs)

 

The Digital Healthcare Act (DVG) of 2019 in Germany established a framework for telemedicine and digital health applications (DiGAs). It introduced a fast-track process for DiGA approval and reimbursement, managed by the Federal Institute for Drugs and Medical Devices (BfArM), with quality assessments by the German Institute for Quality and Efficiency in Health Care (IQWiG). As of July 2024, over 100 DiGAs have been submitted for approval, with approximately 30 permanently listed in the DiGA directory. The act mandated electronic health records for all insured persons by January 1, 2021, and allowed pseudonymized health data sharing for research. Telemedicine consultations have increased by over 300% since the DVG's introduction. The law impacts Germany's 73 million statutory health insurance members and has positioned the country as a leader in digital health integration. Challenges remain in reimbursement negotiations, healthcare system integration, and data protection. The act continues to evolve, shaping the €46.4 billion German pharmaceutical market and the broader healthcare landscape.
 

This legal framework ensures that Germany maintains a universal multi-payer health care system, with mandatory insurance coverage for all residents.  It balances the principles of solidarity, self-governance, and comprehensive care while adapting to technological advancements and evolving healthcare needs.

 

References:

1. [Germany: Health System Summary (2022)
](https://eurohealthobservatory.who.int/publications/i/germany-health-system-summary-2022)

 

2. [Health Care in Germany: The German Health Care System]
(https://www.ncbi.nlm.nih.gov/books/NBK298834/)

 

3. [Healthcare in Germany: Statistics and Facts]
(https://visaguide.world/international-health-insurance/germany/healthcare-statistics/)

 

4. [Health Care in Germany: Strong, But Need for Further Reforms]
(https://www.thelancet.com/journals/lancet/article/PIIS0140-6736%2817%2931280-1/fulltext)

 

5. [History of Healthcare in Germany]
(https://en.wikipedia.org/wiki/History_of_healthcare_in_Germany)

 

6. [Number of People with Private Health Supplementary Insurance in Germany](https://de.statista.com/statistik/daten/studie/250134/umfrage/personen-mit-privater-kranken-zusatzversicherung/)

 

7. [Hospitals in Germany]
(https://www.destatis.de/DE/Themen/Gesellschaft-Umwelt/Gesundheit/Krankenhaeuser/_inhalt.html)

 

8. [PKV Statistics 2020]
(https://www.pkv.de/verband/presse/meldungen/pkv-zahlen-2020/)

 

9. [The Impact of Competition on Health Care Delivery in Germany](https://www.sciencedirect.com/science/article/abs/pii/S0167629617311530)

 

10. [Digital Healthcare Act]

(https://www.bundesgesundheitsministerium.de/digital-healthcare-act.html)
 

11. [Digital Health Applications (DiGA)]

(https://www.bfarm.de/EN/Medical-devices/Tasks/Digital-Health-Applications/_node.html)
 

12. [Health Technology Assessment: Digital Health Applications](https://www.iqwig.de/en/about-us/methods/health-technology-assessment/digital-health-applications.html)

13. [Health Expenditure]

(https://www.destatis.de/EN/Themes/Society-Environment/Health/Health-Expenditure/_node.html)

14. [Statutory Health Insurance]

(https://www.gkv-spitzenverband.de/english/statutory_health_insurance/statutory_health_insurance.jsp)