Abstract
Governments around the world devote sizable resources to health care. In part, this reflects important shortcomings in the private market for health care services. However, it also reflects the universal importance of good health, the difficulty many people have in affording care, and the growing demand for health care services as populations age. This chapter reviews some of the basic characteristics of health care and the market for health care services. It then discusses the kinds of health care activities that governments undertake and the challenges health care poses for fiscal policy.
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