©  The Author(s) Journal Compilation ©  Blackwell Publishing Ltd,  Garsington Road, Oxford OX DQ , UK and  Main Street, Malden, MA , USA S P & A  0144–5596 V. 41, N. 4, A 2007, . 386–394 Blackwell Publishing Ltd Oxford, UK SPOL Social Policy & Administration 0144-5596 © Blackwell Publishing Ltd. 2007 XXX Original Articles SHORT TITLE RUNNING HEAD: SOCIAL POLICY & ADMINISTRATION Vol. 41, No. 4, AUGUST 2007 SOCIAL POLICY & ADMINISTRATION Vol. 41, No. 4, AUGUST 2007 Healthcare in India: Changing the Financing Strategy Ravi Duggal Abstract The way in which healthcare is financed is critical for equity in access to healthcare. At present the proportion of public resources committed to healthcare in India is one of the lowest in the world, with less than one-fifth of health expenditure being publicly financed. India has large-scale poverty and yet the main source of financing healthcare is out-of-pocket expenditure. This is a cause of the huge inequities we see in access to healthcare. The article argues for strengthening public investment and expenditure in the health sector and suggests possible options for doing this. It also calls for a reform of the existing healthcare system by restructuring it to create a universal access mechanism which also factors in the private health sector. The article concludes that it is important to over-emphasize the fact that health is a public or social good and so cannot be left to the vagaries of the market. Keywords India; Health equity; Health financing; Universal access Introduction Access to healthcare is critically dependent on how healthcare provision is financed. 1 Countries that have universal or near universal access to health- care have health-financing mechanisms in which either a single autonomous public agency or a few coordinated agencies pool resources to finance healthcare. All OECD countries, excluding the USA, have such a financing mechanism. In these countries,  per cent of financing comes from public resources like taxes, social insurance or national insurance, which ensure healthcare reaches over  per cent of the population. The health financing system in USA has resulted in poor access to healthcare compared to other OECD countries such as Canada. Outside the OECD group a number of developing countries in Latin America, Asia and Africa, such as Costa Rica, Cuba, Argentina, Brazil, South Africa, Kenya, South Korea, Iraq, Iran, Thai- land and Sri Lanka, have also evolved some form of single-payer mechanism Address for correspondence: Ravi Duggal, -B Chaitanya Apartments, Clarke Town, Kadabi Chowk, Nagpur , India. Email: rduggal@gmail.com