Health Systems

views updated


Health services, public and private, are a major sector of any national economy, and their organization and financing warrant close attention. Equally, the outputs of health systems need continual appraisal–especially in the light of new demands from aging populations and the burden of emerging diseases (notably AIDS) and also in view of widespread concern with persistent inequality in health status and access to health services in national populations.

In its World Health Report 2000, the World Health Organization (WHO) defined a health system as "all the activities whose primary purpose is to promote, restore or maintain health." Provision of health services, including traditional healers and medications, whether prescribed by a provider or not, are included in this definition, as are traditional public health activities such as health promotion and disease prevention. Road and environmental safety improvements (seatbelts, water management, and sanitation) are also included. Activities whose primary purpose is something other than health–for example general education–are excluded even though they often have important positive effects on health outcomes. The organizational responsibilities for health in government and donor agencies do not always align with health-system boundaries thus defined. Water and sanitation, for example, are usually managed by agencies responsible for public infrastructure rather than by health ministries, and investments in them are not usually counted as health expenditure.

Health systems vary significantly from country to country. The shape of a national health system often reflects societal values and views about the responsibilities of government for the health of citizens, but may also be the result of countries's responses to their changing demographic, epidemiological, and economic conditions. Health systems can differ in:

  • How health care is financed–through taxes, payments to social or private insurance funds, or out-of-pocket payments or co-payments by consumers.
  • How resources for health are managed and paid to providers–by governments through general or line-item budgets for providers, or by specialized payment schemes and contractual arrangements based on the number of patients and/or types of service provided.
  • How health services are provided–through publicly owned and managed facilities, by private providers, or by some combination of these.
  • The roles and responsibilities of different actors–including the public sector (as a financier, provider, or regulator), the private sector (including both for-profit and non-profit providers, insurance funds, professional associations and unions), and consumers.

Figure 1 illustrates the flow of resources in a health system (that of the former German Democratic Republic) in which health was financed mainly through taxes from individuals and enterprises (the flow along the upper left hand corner of the figure) to government, which distributed funds from general revenues to local health authorities, who then supported provision of services through a variety of government-run services (the right-hand side of the figure). Out-of-pocket expenditures by consumers were very limited (mainly for non-prescription medications), although in similar systems informal ("under the table") payments from patients to health care providers are often substantial. In contrast, the private sector plays a much larger role in the U.S. health system. In most countries, health systems combine a mix of public and private involvement in financing, fund management, provision, and regulation.

Assessments of health systems performance can employ a range of criteria, including:

  • Health status of the population–conventional measures of mortality and morbidity, including life expectancy and the incidence and prevalence of diseases and disabilities. More complex measures may also be applied, such as the burden of disease, as expressed in terms of disability-adjusted life years (DALYs) or similar indexes that attempt to express a population's health using a single, comparable metric.


  • Economics–the cost and cost-effectiveness of different health interventions, including the cost of gaining an additional year of healthy life as measured in DALYs, as well as the financial sustainability of particularly models of health financing and delivery, as affected, inter alia, by the changing demographic structure of the population, especially aging.
  • Equity–the extent to which persons of differing income levels, including the poor, have access to needed health services or are protected from falling into poverty as the result of a personal or family medical crisis, or that all of those afflicted by a particular malady have a chance to obtain treatment.
  • Consumer satisfaction with the quality and affordability of services, as measured through public-opinion surveys, exit interviews, etc.

Health reforms have been introduced in order to improve health system performance. The principal reform measures include:

  • Changes in the way health care is financed: shifting from tax-based financing to cost recovery (user fees) and risk pooling (social and private insurance).
  • Changes in the way services are organized, including changed roles for the public and private sectors (shifting from public financing and provision to public purchasing of privately provided services) and decentralization (shifting control over resources and personnel from central to local governments).
  • Changes in the ways providers are paid (from government budgets for public provision to various modes of contracting with private providers–capitation, reimbursement schemes for specific types of treatments, performance-based contracting).
  • Quality improvements (reorganization and redeployment of health personnel, changing the way in which medicines and other health-system inputs are purchased and distributed).
  • Stewardship and accountability: introducing norms and reporting mechanisms for private providers, creating channels through which consumers and civil-society institutions can exercise oversight over health care.

Reforms are potentially beneficial but also contain risks. The effects of reform measures on reproductive health services, in particular, warrant close attention. Measures such as cost recovery may help to mobilize more resources for health care, but may also reduce access to needed reproductive health services by poor and vulnerable groups. Insurance schemes may lower the risks of being impoverished by most kinds of health emergency, but may not cover a life-threatening obstetric emergency. Integration into broader health programs of family planning and other priority services that previously had been funded as categorical programs may result in erosion of their priority status. Reproductive health advocates are active participants in the design and oversight of the reform process.

See also: Disease, Burden of; Health Transition; Mortality Decline.


Hurst, Jeremy. 1992. The Reform of Health Care: a Comparative Analysis of Seven OECD Countries. Paris: Organization for Economic Cooperation and Development.

Murray, Christopher, and Alan Lopez, eds. 1996. The Global Burden of Disease: a Comprehensive Assessment of Mortality and Disability from Diseases, Injuries, and Risk Factors in 1990 and Projected to 2020. Cambridge, MA: Harvard University Press for World Health Organization and World Bank.

The World Development Report 1993: Investing in Health. New York: Oxford University Press for World Bank.

The World Health Report 2000, Health Systems: Improving Performance. Geneva: World Health Organization.

Thomas W. Merrick

About this article

Health Systems

Updated About content Print Article


Health Systems