Effects of SHI fund mergers in Germany: efficiency gains and policy implications

Issue/problem

Healthcare expenditure in Germany has risen continuously, reaching approximately €500 billion annually, with around €300 billion attributable to statutory health insurance (SHI). Administrative costs account for approximately €10–12 billion (4–5%). Despite multiple reforms, expenditure growth persists. Current policy debates focus on whether merging more than 90 SHI funds could generate efficiency gains. Estimates range from negligible savings to over €5 billion annually, highlighting uncertainty and policy relevance for fragmented health systems.

Description of the problem

This debate (2023–2026) addresses whether structural consolidation can improve efficiency. Key questions include what level of savings is achievable, what drives variation in estimates, and whether mergers affect overall expenditure. Diverging projections reflect assumptions on economies of scale, fixed versus variable costs, integration costs (e.g. IT systems, workforce), and competition effects. The issue is relevant for other multi-payer health systems.

Results

Available evidence suggests that mergers can reduce administrative costs through economies of scale and process consolidation. However, savings are modest relative to total SHI expenditure and may be offset by transition costs. Effects depend on implementation, particularly governance structures and IT integration. There is limited evidence that mergers substantially reduce overall healthcare expenditure or improve care outcomes.

Lessons

Mergers can enhance administrative efficiency but are not sufficient to address rising healthcare costs on their own. Effective policy should combine consolidation with reforms targeting care delivery, incentives, and digitalization. The German case illustrates that expectations of large savings from mergers alone may be overstated and provides transferable lessons for other health systems.

Key messages

• Mergers may reduce administrative costs but have limited impact on total healthcare expenditure.

• Efficiency gains depend on implementation and should complement broader health system reforms.