The Bismarck type health care system relies on mandatory health insurance. Contributions to health insurance are paid by the employer as well as the employee. Self-employed persons pay their fees directly. For the economically inactive population, contributions are covered by the state. Contributions are collected directly by the health insurance funds and are pooled and redistributed through a risk adjusted scheme based on age, sex, high costs during the reference period and pharmacy-based costs. All policyholders are covered under the same benefits package, which is defined by law. There are seven health insurance funds. There is no competition since premiums are identical and reimbursements are not dependent on the quality of care. The publicly managed General Health Insurance Fund holds approximately 60 per cent of the market and guarantees the functioning of the whole system. The other six health insurance funds are ‘occupational’ funds.