The health care system of the Federal Republic of Germany relies on the private sector for the financing, delivery, and payment of care. However, the private sector is regulated by the government to ensure that broad societal interests are being fulfilled. The system has managed to achieve comprehensive coverage and equal access for all citizens, freedom of choice for patients, high-quality medical care, and cost containment. The reason for this success is a combination of decentralized power and decision making and the establishment of an effective negotiation system that takes place at federal, state, and local levels. The system suffers from some problems, however, which will have to be addressed: the present structuring of hospital and ambulatory care results in excessively long lengths of stay in hospital; drugs are overprescribed; the supply of health professionals does not meet the country's needs; more nursing homes are needed; and eastern Germany must be fully integrated into the system.