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German coalition discuss reforming healthcare system


BERLIN—A cross-party panel of healthcare experts met in Berlin on Friday to try and push the German government's controversial plans for the reform of its healthcare system towards a conclusion.

The so-called "Grand Coalition" that is currently in power and led by Angela Merkel, leader of the conservative Christian Democrat (CDU) party, is said to be on the verge of collapse because of the failure to reach agreement on this issue.All parties agree that the healthcare system is in sore need of repair, according to sources. Medication expenditure has increased by 50% over the last 10 years, to reach €25 billion ($32 billion) a year. This represents some 10.9% of gross domestic product and is only higher in two other countries—the United States and Switzerland, according to figures from the Organisation for Economic Co-operation and Development.

According to a recent report from Bloomberg news agency, over one-third of the 250 insurance companies that provide coverage to the 70 million people within the system are in debt, giving a total shortfall of €3.6 billion.

The current system attempts to share the cost according to income levels, so that richer people and companies subsidize poorer people. Ms. Merkel's CDU party and business leaders want to fix the system by raising the overall contribution, but introducing a flat rate, regardless of income levels.

It also proposes the creation of a new insurance fund in 2008 and the removal of the right of the insurance companies to set mandatory contributions. It is thought that this would boost overall contributions to the system by 0.5%, up from the current 14.28% of gross pay.