Competition policy for health care provision in Germany

•Selective contracting in Germany required financial incentives or mandates to conclude contracts.•A key issue of selective contracting is the readjustment of payments for the collective systems.•There is evidence that selective contracting has improved quality of care.•The evidence on selective contracting points to cost increases, at least in the short run.

Since the 1990s, Germany has introduced a number of competitive elements into its public health care system. Sickness funds were given some freedom to sign selective contracts with providers. Competition between ambulatory care providers and hospitals was introduced for certain diseases and services. As competition has become more intense, the importance of competition law has increased. This paper reviews these areas of competition policy. The problems of introducing competition into a corporatist system are discussed. Based on the scientific evidence on the effects of competition, key lessons and implications for future policy are formulated.