State funding for health-care services and public health : is it based on the principles of economic theory?.

Abstract

This paper is based on the classification of healthcare services and public health actions in light of some fundamental principles of public economics. Specifically, public health actions can be regarded as a public good while healthcare services seem to be a private good. This difference should have a direct impact on their optimum provision by the state, and therefore this classification has to affect the rationale of a resource allocation which is based on economic theory. However, the data do not confirm a situation in which a public good (public health) is largely financed by the state. On the contrary, healthcare services, which have the properties and the characteristics of a private good, are funded by the state with a high percentage of health expenditure. Thus, this paper describes the paradox observed in the health sector, which highlights a mismatch between economic theory and the policies for optimum resource allocation in this sector.