Modeling the Health Insurance System of Germany: A System Dynamics Study

The German Health Insurance System is balanced on the edge. Decision makers seem not successful in developing and implementing sustainable health policies, which ensure at least
a balanced health insurance fund. Highly dynamic factors influence the health insurance fund situation and complicate the decision making. The System Dynamics Methodology is used to examine first possible causes of the enduring problem. In the formal simulation model, we include among other variables the population dynamics, personal income, contribution fraction and health expenses per capita as well as behavioral states of the agents. Second, the model is used to conduct simulation-based policy testing to find improved decision rules. The policy ‘expenses reduction pressure' forces the government to reduce health insurance expenses per request. It can improve the health insurance system situation best. The result will be a reduction of the health insurance fund shortfall. Other policies worsen the problem significantly due to increased oscillatory tendency in the health insurance system. As result of the study, the different policies are discussed separately.