Approaches to public funding of Australia's health care

Three approaches to funding health services: historical funding, population based funding and output based funding, are characterised. Having dismissed the first and most common of these, some of the merits and pitfalls of the two remaining approaches to funding health services are briefly examined and it is argued that although they may appear to be based upon separate and competing principles, the one seeking to maximise equity and the other efficiency, a reconciliation is possible by applying both, but at different levels.