ABSTRACT
Even in principle the financing of health care is a complex issue, and its reform has been persistently on the political agenda. The source of funds—government or private sector—determines the balance between individual and collective responsibility for the financial burden of health care, and is an important determinant of access and equity. This chapter outlines the problems and discusses the options available for reforming health care financing. There have been numerous suggestions for the reform of health care sector financing. These vary in scope, in their time frame and, reflecting different social values, in the principal objectives of the reform. Health savings accounts give tax advantages and possibly a subsidised rate of return for funds that individuals set aside for their own health care. The task of health care financing is to create a set of financial incentives that will assist with the achievement of social objectives, which economists often equate with efficiency and equity.
