> > Germany has Europe's oldest universal health care insurance system, with origins dating back to Otto von Bismarck...
> I wasn't aware that a government-sponsored healthcare system this old existed in the world, because it's always seemed to me that such programs are fundamentally unsustainable.
They are not fundamentally unsustainable but Germany's current social system is unsustainable and will eventually fail because the demography and economics have undergone massive changes since it has been designed.
> So what I want to know is, how do they keep it sustainable For example, if there's no longer a market where demand responds to price signals, how do they determine how much procedures cost?
We do have a market in which insurance and health care providers negotiate prices and as you can see not only does this work it works a lot better than the US market does.
> What keeps providers from increasing prices 5% every year, regardless of cost increases, until they're essentially looting taxpayers' money on a massive scale?
Health care providers can't set arbitrary prices and insurance providers are regulated. Also insurance is mandatory but not paid for from taxes unless you don't have any income. The mandatory social insurances, of which there are four, all get paid a certain amount relative to your income.
> If the government sets prices, how do you avoid damaging shortages or surpluses when it gets the pricing wrong?
See above. The government doesn't set the prices.
> How about moral hazard -- the problem of people who waste healthcare resources by going to the doctor for every little sniffle, scrape and twinge since it's free?
You want to detect serious stuff early to keep the costs down, so to a certain degree you want that to happen. Apart from that there is a small 10€ fee you have to pay once every quarter for each doctor you visit unless you were referred to him by another doctor. This keeps moral hazard down and especially prevents unnecessary visits to specialized doctors.
> What keeps people in other countries who don't pay into the system from getting a burning desire to move to Germany when they find out they have something really expensive to treat like cancer or AIDS?
Like moral hazard this is not such a big issue as one might think it is. Most people tend to be reluctant to make such big moves, especially if they don't speak the local language which applies even more so if the topic they would like to talk about is their health. Apart from that there aren't that many countries in the world with a health care system as catastrophic as the one in the US.
More importantly though the people who do actually move to Germany for treatment tend to have lots of money and have no problem spending it on their health. So these patients are flown into the hospital using the dedicated helipad, on top of the luxury ward, in which they wait for overpriced procedures and get their overpriced medications.