Private Health Care and Drug Quality in Germany – A Game-Theoretical Approach

Tristan Nguyen, Karsten Rohlf

Abstract


Quality of medical treatment is a major goal of Germany's statutory health insurance system. According to our game theoretical approach, existing price-discrimination between statutory and private health insurance leads to a higher quality of innovative drugs. Hence, a move into the direction of a single payer health care (so-called citizens’ insurance) should result in a reduction of innovative drugs' quality. Moreover, and in the case of citizens insurance's implementation, innovative drugs' price level should increase for patients with statutory health insurance. Furthermore, a similar effect is caused by the Act on the Reform of the Market for Medicinal Products (AMNOG) which leads to reduced prospects for price discriminations between the statutory and private health insurance system. In summary, the existence of private health insurance in Germany does not cause unfavourable cream-skimming. Rather the division of the German health care sector (statutory vs. private health insurance) results in higher drug quality at lower prices for patients with statutory health insurance.


Full Text: PDF DOI: 10.5539/ijef.v4n11p24

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

Copyright © Canadian Center of Science and Education

To make sure that you can receive messages from us, please add the 'ccsenet.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.