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Federalism and the "New Politics" of Hospital Financing

GPS, Vol. 5 No. 1, (2009)

Federalism is commonly regarded as a major impediment to welfare state expansion, yet its role in times of welfare state retrenchment remains unclear. Complex responsibilities shared between the federal government and those of the Länder make German hospital financing an interesting example in this regard. The paper analyses recent reforms in German hospital financing, showing how federal institutions may impede reforms and how resistance is motivated. It describes the historical compromise behind the foundations of hospital regulation and outlines the transformation process in hospital reimbursement, showing how systems of reimbursement and hospital planning have come into conflict. Against this background, attempts by national and Länder governments to solve this conflict are assessed and more comprehensive reform approaches discussed.

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