These basic principles have created a very important difference between the two types of health insurance. The PHI system has diversified payment rates, while in the SHI system, benefits are financed by an income-related payroll tax. In 1995, the average SHI contribution rate was 13.2 percent of labor income, half paid by the employer and the other half by the employee. Individuals who voluntarily join a private insurance plan are normally not allowed to re-enter the SHI system if the cross-subsidization effects of SHI change to their advantage. Germany draws a sharp difference between hospital-based and office-based physicians. Office-based practitioners provide the population with ambulatory care, prescribe drugs and medical aids, and serve as gatekeepers for specialist referrals and hospitalization. "In 1993, more than 266,000 physicians were working in various positions in the German health care sector. The number of office-based physicians was 89,000, which indicates a physician/population ratio of 1.18 per thousand inhabitants in the western part of Germany. Approximately 90,000 doctors were employed by hospitals". (Knox 49)
As compared with other SHI treatment spending, hospital expenditures have grown disproportionately over the last three decades. This growth is explainable by several factors: medical, technological, and economic. For example, more diseases can