[Competition in healthcare--a health systems' perspective]

That "more competition in healthcare primarily produces more needs-based equity, better quality, higher efficiency, reduced costs and less bureaucracy" is a familiar claim. But is it correct? Three types of competition can be identified within a triangle: (1) competition among third-party-payers for insured individuals/customers, (2) competition among providers for patients, and (3) competition among third-party payers for contracts with providers--and vice versa. German and international evidence for these three types of competition demonstrates that many expectations--e.g., that patients can be steered based on quality information--are wishful thinking. Instead of market and competition, regulation is needed (e.g., in the form of an effective risk-based allocation mechanism) to ensure high-quality care for those 5% of the population incurring 50% of the healthcare expenditures (i.e., the seriously ill patients), while at the same time competition based on selective contracts does not pay off for the majority of the population due to high transaction costs.