Germany's ruling coalition reached a deal on Monday to introduce changes to the nation's healthcare system, but experts called the reforms modest and said they did little to curb spiralling costs.
An overhaul of the nation's healthcare regime, which is seen as too costly and lacking in transparency, had been seen as one of the key reform challenges for Chancellor Angela Merkel's left-right coalition. But months of talks between the conservatives and Social Democrats (SPD) resulted in what experts called a messy compromise which puts off key decisions, raising questions about the coalition's ability to agree far-reaching reforms.
Merkel's pro-business conservatives wanted to cut the hefty contributions which firms make towards their workers' healthcare costs in order to stimulate hiring in Europe's biggest economy.
Her SPD coalition partners were hoping for a tax hike to fund the 140-billion-euro health bill - a call which Merkel rejected, partly because the electorate is already facing a rise in sales tax next year.
Healthcare contributions made by workers and employers will rise by 0.5 percentage points from next year. Statutory healthcare costs currently run at 14 percent of an employee's wage, split between worker and employer.
In future, children's healthcare contributions will be paid for with tax revenues, totalling some 1.5 billion euros in 2008 and rising to 3 billion euros in 2009 - much less than their estimated costs of some 16 billion euros a year.