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.
