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Some Observations on Greater Competition in the West German Health- Insurance System from a US Perspective

Jörg Finsinger, Kornelius Kraft and Mark Pauly
Managerial and Decision Economics
Vol. 7, No. 3 (Sep., 1986), pp. 151-161
Published by: Wiley
Stable URL: http://www.jstor.org/stable/2487563
Page Count: 11
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Some Observations on Greater Competition in the West German Health- Insurance System from a US Perspective
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Abstract

This article argues that greater competition could result in improved performance and greater efficiency in the West German health-care system, much as more extensive competition has reduced the growth rate in the United States. Two special impediments to greater competition are discussed: (1) geographical limits in size of sickness funds which limit economies of scale, and (2) the tax-like financing of individual sickness funds which may actually offer incentives to increase health-care costs and which violates the most generally accepted principle of tax equity, that of horizontal equity.

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