Moving towards more sustainable healthcare financing in Germany

The aim of the recent healthcare reform in Germany was to increase the sustainability of healthcare finances, by reducing its negative impact on employment and increasing cost-effectiveness via enhanced competition. However, not everything has succeeded. The segmentation of the healthcare system in a private and a social insurance market will continue to pose equity and efficiency problems, the reform improves the framework conditions for competition between insurers but the price signal in the new financing system for social health insurance will be both weak and distorted and this will need to be corrected for competition to produce desired results. More freedom for contractual relations between insurers, healthcare providers and pharmaceutical companies could help to better reap the benefits of competition.

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