The objectives guiding health care reforms in Germany, Switzerland and the Netherlands were to increase efficiency and consumer satisfaction in the provision of health care services. This paper sums up incentives and instruments of competition for consumers, sickness funds and health care providers in Germany, Switzerland and the Netherlands which are necessary to fulfill these objectives. Incentives for risk selection of sickness funds are high in Germany and Switzerland while they are low in the Netherlands. Incentives for consumer choice are also highest in Germany and Switzerland. In all three countries sickness funds have only few instruments for competition. The effects of competition have been disappointing so far. The objectives of competitive health care reforms can only be achieved if incentives and instruments for competition consistently support competitive behavior of market actors.