ABSTRACT
Out-of-pocket payments are made at the point of use by patients. There are many manifestations of ‘out-of-pocket’ health system components. A market for drugs for which prescriptions are not required operates in almost all countries, often, but not always, in a highly regulated environment. ‘Out-of-pocket’ nanced consultation with primary care doctors, formally registered, exists in almost all countries (other than those few which formally ban private practice) from the Harley Street practitioners in London to the medical practitioners of the slums of Karachi. The model that most closely resembles a simple ‘free’ market is where out-of-pocket fees are charged for services provided by for-pro t operators, especially in the informal sector in poor countries, where supply factors are not subject to restriction by regulation. Prices and quantities bought and sold are determined by the interaction of demand and supply. There is a direct, transparent, link between payment and receipt of the service or product. Rationing is strictly on the basis of willingness and ability to pay, and problems of ‘moral hazard’ do not apply.
