Germany, like most countries, has been challenged by ever-rising health care costs, which now consume 10.4 percent of the country’s GDP. But it has been more proactive than most countries in seeking new ways to rein in those costs.

Germany’s cost-control efforts reflect its firm commitment to two goals: to ensure that all its citizens receive the same level of high-quality care and to keep health care spending in line with the health system’s revenues. Achieving those goals is becoming increasingly difficult, however, given mounting cost pressures and Germany’s changing demographics. Population growth is stagnant, and the population is aging rapidly. The health system is funded on a pay-as-you-go basis, and unless spending is kept under control, contributions from the dwindling number of active workers could soon be insufficient to cover the cost of care for retirees. (For more, see sidebar “Fast facts about the German health care system.”)