Transformations  in
Business & Economics

THE DISTRIBUTIVE JUSTICE LOGIC BEHIND THE INCENTIVE MECHANISM OF GERMAN STATUTORY HEALTH INSURANCE IN THE ALLOCATION OF HEALTHCARE RESOURCES
Yingnan Bi, Yu-an Liu

ABSTRACT: The incentive mechanism is a crucial part of German statutory health insurance system design. Since its introduction, scholarly discussion of the mechanism has focused on policy effect analysis, and little research has discussed the logic behind its introduction. This paper clarifies the pathway of the formulation and development of the incentive mechanism by using document analysis to analyze numerous legal and regulatory documents regarding the establishment of incentives. After emerging in the late 1970s and being continuously improved for nearly 50 years, this incentive mechanism has been used to finalize a complete structure that includes two incentive schemes: universal and personalized. To illustrate this linking role of the incentive mechanism, this paper constructs an explanatory model. Using atwo-dimensional spatial model, this paper explains how incentives work to connect clinical services with disease prevention and health promotion services. This system rewards the active pursuit of health behaviors to improve the willingness of insured people and other health co-creation participants to use public health services. This paper concludes that the purpose of incentive mechanism design is to improve health levels by enhancing individuals’ awareness of their responsibility in the co-creation of health value and the reverse allocation of healthcare service resources from a utilization perspective. Therefore, the mechanism can be regarded as an exceptional way to strengthen health resource allocation.

KEYWORDS:  incentive mechanism; universal welfare distribution; health value co-creation; allocation of health resources.

JEL classification:  M14, M19, P2.