Fiscal Federalism in Health


Health Economics

  • Fiscal federalism concerns the arrangements between the top level of financial management (e.g. central government) and lower tiers (e.g. states, provinces, local authorities). Most publicly funded health care systems combine central powers to determine resource allocation with more locally decentralized powers in various ways. Thus, in the US there are federal health care programmes (for the elderly) and state programmes (for the poor but also with federal support); in Canada health care is a provincial responsibility but governed by federally enforced principles and federal fiscal incentives; in the UK, local health care commissioners are funded by a centrally determined budgetary formula but purchase care for local residents according to locally established priorities (within a framework of national priorities).