The two types are fee-for-service and managed care plans. The first managed care plans were started in the 1940s, with the development of several Health Maintenance Organizations (HMOs). Their purpose was to provide comprehensive health care for a set monthly fee, rather than fee-for-service. Considered radical at the time, HMOs and other managed care products are now mainstream. Many have demonstrated cost savings and quality outcomes by emphasizing preventive care and conservative use of treatments. The philosophy of some plans is holistic, emphasizing preventive and primary care, but by limiting access to certain services, managed care plans and their physicians may ultimately determine how care is rationed, rather than the government. In some plans, financial incentives operate on what is best for patients, not providers, thus reducing the likelihood of over-treatment Some of the weakness of HMO's are that most plans limit consumers to certain doctors, hospitals and other providers. A patient's choice of care, including whether they receive any care, depends on what is covered in a particular policy, and the insurance company's opinion about whether treatment is appropriate and cost-effective. Employers choosing plans for their employees may opt, not for the best, but for those with the lowest cost premiums.
With Germany's health care system 92 percent of residents receive health care through statutory health insurance. Those not insured through these funds, mostly civil servants and the self-employed, have private for-profit insurance. An estimated 0.3 percent of the population has no health insurance of any kind. They are generally the rich who do not need it and the very poor, who receive health care through social assistance. .
Sickness funds are divided into two categories: primary funds and substitute funds. Workers earning less than the periodically revised income ceiling are required to belong to the primary funds; those earning more than this ceiling may be members on a voluntary basis.