'Manacled competition': market reforms in German health care

In 1993 Germany joined the small but swelling ranks of societies determined to explore managed competition as a means of slowing the growth of health spending by giving stakeholders new incentives for efficiency. Realizing the benefits of competition, however, demands changes in institutional norms and regulatory practices that now largely handcuff those who would follow competitive logic into "managed care." In time Germany's system of "manacled competition" may evolve into a happy higher synthesis of managed care and managed competition. Or policymakers may conclude that the political price of installing workable market forces in health care is too high and reconcile themselves to more traditional applications of political pressure.