How the German healthcare system works
Almost everyone has health insurance, and the standard of healthcare is high. But rising costs are putting the system under pressure to reform.
Wolf Zinn How is the German healthcare system organised?
Health insurance is compulsory in Germany. Almost 90 per cent of the population are covered by statutory health insurance (GKV), while around ten per cent have private health insurance. People with health insurance are largely free to choose their doctors and hospitals. The state sets the legal framework, but health insurance funds, professional associations, doctors and hospitals organise many structures and processes themselves.
How is the system funded?
The GKV is based on the principle of solidarity: contributions are based on income, not on age or the risk of illness. Employees and employers share the standard contribution, currently 14.6 per cent, as well as the additional contribution charged by the respective health insurance fund. The system also receives funding from tax revenues. Long-term care insurance is also compulsory. It covers part of the costs when long-term care is needed and is likewise funded primarily through contributions. According to preliminary estimates, healthcare expenditure totalled around 580 billion euros in 2025 – approximately 13 per cent of gross domestic product.
In 2024, there were more than 1,800 hospitals with around 473,000 beds and 17.5 million inpatient cases. There are 4.7 practising doctors and 12.2 nurses per 1,000 inhabitants – both above the OECD average.
Why is the German healthcare system considered one of the best in the world?
Almost the entire population has healthcare coverage, and medical staff are highly trained. Germany is also home to renowned medical research institutions and a strong pharmaceutical and medical technology industry.
What reforms are planned?
The system performs well, but it is expensive. At the same time, the population is ageing, increasing the need for medical treatment and long-term care, while fewer people of working age are paying contributions. For this reason, the reforms aim to make healthcare provision more efficient. The hospital reform will increasingly concentrate complex treatments in specialised hospitals and link services to quality standards; a transformation fund of up to 50 billion euros will support the restructuring until 2035. The Federal Government also plans to give GPs a greater role in coordinating care and to introduce digital initial assessments. Emergency care is also to be reorganised and better coordinated in order to avoid costly inappropriate and duplicate provision.
