Independent Research and Policy Advocacy

Incremental Adoption of Managed Competition in Germany

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The statutory health insurance system ensures health coverage to the majority of the German population. Founded on the value of solidarity, it pioneered the Bismarckian social health insurance model of health systems. Its structure is characterised by self-governance of stakeholders, collective negotiations and joint decision making. While socio-political factors were involved in the genesis of the system and informed its underlying structure, economic considerations necessitated the introduction of competition-based principles. In the process, regulatory reforms gradually introduced health system features that closely resemble the functions of managed competition as conceptualised by health economist, Alain C. Enthoven. The introduction and implementation of these regulatory reforms have faced several limitations and challenges. The incremental adoption of managed competition in the system exhibits the conflict between long-standing systems of governance and reforms aimed at addressing efficiency concerns.

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