Abstract

Health care systems desperately need efficiency and demographic stability. Otherwise contributions will increase rapidly and health services will deteriorate. A promising way is to transform the pay-as-you-go insurance system into a capital-funded system. Capital-funded systems are robust towards demographic changes, and they employ competition to increase efficiency on the basis of market prices and risk-adjusted premiums. The critical question whether a transition of the system is feasible can be answered positively:
The transition to a capital-funded system is feasible within a very short period of time and without additional costs.

JEL-Classification: I10, I11, J10.