Policy and Health in Asia: Financing and Allocating Public Expenditures

Financing clinical services by tapping public sources and mobilizing private sources is a role all governments use to intervene in the health sector. Public sources come from general or earmarked taxes, while private sources are mobilized by mandatory user fees paid by individuals, families, or enterprises. In turn, governments allocate these public revenues toward public health activities that benefit society above and beyond curative services that mainly benefit the individual. How countries finance and allocate public expenditures determines how they meet their populations' health needs. Research by John Peabody and colleagues takes a closer look at this issue in Asia and proposes that governments intervene in the health sector to address competing objectives; however, this often means making trade-offs among the objectives. User fees can be mobilized to help meet competing objectives. Social insurance (SI) is another policy that offers promise for relatively wealthier countries to avoid some of the difficult trade-offs.