About 10 percent of Germans are covered by private insurance, and there is no evidence of any deleterious impact on the health care provided to those whose incomes are lower. The fact is that German doctors cannot usually run a practice on the basis of private patients alone, since they represent only one in 10 Germans. The objective of reference pricing is to reduce the cost of prescriptions without affecting the quality of care. The idea is that a government committee can designate one drug out of a range of drugs that are used for a particular purpose and make that one available in government subsidized pharmaceutical programs. The evidence from Germany is that the objectives of reference-pricing are thwarted by changes in prescribing practices by physicians and increases in such other health costs as increased visits to physicians and increased hospital admissions.
Similar concerns surround reference-pricing in New Zealand.
Some public sector involvement in the delivery and financing of health care should be maintained. In Canada, however, the government is purchaser, provider and regulator of virtually all medical services in the country. RPAs would purchase health care for the people of their region, develop contracts with providers, and monitor the services being delivered. Private providers and private insurers would also be permitted to operate. Acute care hospitals in Canada consume 38 percent of total health spending.