This Element discusses the role of the government in the financing and provision of public health care. It summarises core knowledge and findings in the economics literature, giving a state-of-the-art account of public health care. The first section is devoted to health system financing. It provides policy rationales for public health insurance which rely on both equity and efficiency, the co-existence of public and private health insurance, how health systems deal with excess demand, and the effect of health insurance expansion. The second section covers the provision of health care and the effect of policy interventions that aim at improving quality and efficiency, including reimbursement mechanisms, competition, public–private mix, and integrated care. The third section is devoted to the market for pharmaceuticals, focusing on the challenges of regulating on-patent and off-patent markets, and discussing the main incentives for pharmaceutical innovation.

The standard classifications of health systems don't allow for the complexity and variety that exists around the world. Federico Toth sets out a new framework for understanding the many ways in which health systems can be organized and systematically analyses the health systems chosen by 27 OECD countries. He provides a great deal of up-to-date data on financing models, healthcare spending, insurance coverage, methods of organizing providers, healthcare personnel, remuneration methods for doctors and hospitals, development trajectories and recent reforms. For each of the major components of the healthcare system, the organizational models and the possible variants from which individual countries can ideally select are defined. Then, based on the organizational solutions actually adopted, the various national systems are grouped into homogeneous families. With its clear, jargon-free language and concrete examples, this is the most accessible comparative study of international healthcare arrangements available.