The system is a Bismarckian social health insurance system, with mandatory insurance for the whole population and a public–private mix for the provision of health care. This system, a contractual one with a clear separation between financing and provision, replaced the previous Semasko health care system. Many physicians have their own private practices and work under contract with the health insurance funds, which offer a basic package of curative and preventive services, but compete for members. This system has changed quickly and its achievements outweigh its mistakes, although it is still facing significant challenges for the future.