Why German doctors are packing their bags

In the past few months, hordes of white-coated doctors have made regular - and noisy - appearances on the streets of German big cities.

More than 12,000 employees of university and state hospitals in nine German states have protested long hours and pay levels far below that of their colleagues in the rest of Europe.

"The working conditions at the clinics are getting worse and worse," says Athanasios Drougias, of the Marburger Bund, Germany's biggest doctors' union with nearly 105,000 members. And the head of that union, Frank Ulrich Montgomery, recently told German radio that 1 in 3 doctors are now seeking work outside of Germany because of poor working conditions.

The high-profile strikes at about 40 hospitals over the past few months are drawing attention to the difficult working conditions faced by the nation's primary caregivers. But they're also revealing something else: the troubles facing Germany's over-extended social-welfare model, and the long road Angela Merkel's government faces in correcting it.

Germany is suffering from rocketing public spending costs and an inflexible labor market that critics say has scared off investors and contributed to the fact that 4.5 million Germans are out of work. Though still a world-beater in exports, Germany hasn't shown the fervor that economists say is needed to trim social services and battle unemployment.

As a result, Europe's traditional economic engine has faltered as countries with more dynamic labor-market policies - such as Britain and Sweden - thrive. The jobless rates of the two economies, at 4.7 and 6.4 percent respectively, are well below that of Germany, which is hovering around 11 percent.

More flexibility in their hiring and firing laws, and a willingness to pay top money for high- quality labor, has made Sweden and Britain serious competitors for German medical talent.

In the past three years, doctors have been "fleeing the country," says Mr. Drougias. According to one German doctors' association, 12,000 German doctors are working abroad. Most are on short assignment in the US, says Roland Ilzhöfer, the organization's spokesman. But at last count, 2,600 were registered in Great Britain. More than 1,000 others are in Scandinavian countries, he adds.

"We know that doctors here are unhappy with working conditions and the large amount of bureaucracy," he says. "But ... it also has a lot to do with money. They can earn double or triple the amount abroad."

A 2004 comparative study of doctors' wages, conducted by the London-based National Economic Research Associates for the British Department of Health, confirms the claim. Considered by German experts to be the latest and most viable such study, the report acknowledges the difficulty of drawing exact comparisons because of the disparate ways in which countries and research institutes calculate and collect data.

Nevertheless, a general trend is clear: Estimates of hospital doctors' average annual earnings in 2002 ranged from $35,000to $56,000 in Germany; $127,285 in Britain; and $165,000 to $268,000 in the US. Swedish hospital doctor salaries were estimated at only $56,000 a year - similar to the German figures.

The departure of young doctors, coupled with a decreasing number of medical students, has already had an impact on Germany's hospitals, where 3,000 positions are unfilled at the moment, says Mr. Ilzhöfer.

The German government seems well aware of this new reality. Chancellor Angela Merkel has called healthcare reform "more difficult than any other" that Germany is being forced to undertake.

The system, which provides patients comprehensive coverage for low monthly payments, currently costs the government 143 euros ($183) billion a year, says Jochen Pimpertz at the Institute for German Economy in Cologne.But employers also shoulder considerable economic burden for the plan. As it stands, they must pay an additional 6.5 percent of an employee's salary toward healthcare.

Mr. Pimpertz says the number is already among the highest in Europe, and says that it will only rise in the coming years. As it rises, hiring new workers will become more expensive - and thus less likely to happen, making Germany's labor market less competitive, he says.

"Increasing healthcare payments lead to increasing labor costs for companies," says Pimpertz. "That is surely one of the biggest disadvantages to investing in Germany, and it's a major problem for our labor market."

The more an employer has to pay for his employee's coverage, the more he is likely to pull up stakes and move on.

"Climbing healthcare costs mean climbing labor costs," says Max Höfer, director of the German Institute for Health Economics. "This makes products more expensive and leads to automation and, eventually, job cuts."

Government proposals for healthcare reform have been stalled by political bickering.

The migration abroad, meanwhile, shows no signs of stopping, says Ilzhöfer. In addition, those who do stay are increasingly eyeing other options. "They're no longer going into patient care," he says. "They're becoming medical journalists or working for pharmaceutical companies and consultancy groups."