Year VIII, No. 10/2009 71 THE FUTURE AND PERSPECTIVES OF FINANCING THE HEALTHCARE SYSTEM Prof. Gheorghe MATEI, PhD Bianca MIHART, PhD student University of Craiova 1. General characteristics of the healthcare systems Health care can generally be financed in four different ways:  social insurance, which is based on tax-like contributions and managed or regulated by the state,  a health system, which is completely financed from tax revenues and other government resources,  private direct payments (out of pocket),  private health insurance. These groups are not mutually exclusive; in fact, all health systems depict a mixture of various elements. Similarly, the distinction between private and social insurance is not as clear-cut as indicated in the previous typology; i.e., most health insurance systems are somewhere in-between the extreme ends of either category. Private health insurance may be a tool to eventually achieve universal public insurance. Similarly, PHI-based health systems often contain cost sharing (e.g., user fees, co-payments, or deductibles) in order to restrain household demand and consumption of health care. Finally, out of pocket spending may become the starting point of an insurance-based system if resources are redirected for prepayments. Several studies derive a willingness and ability to pay for health insurance based on the large OOP (out- of-pocket) spending on health in low- and middle-income countries. As argued in several studies, even the poor may be willing to pay for health insurance. Out-of-pocket spending constitutes a large and very important source of health care financing in developing countries. Payments are not made beforehand but when care is needed. This can have catastrophic outcomes, especially for low-income families:  individuals may not be able to pay for needed care and thus risk a grave deterioration of their health condition,  individuals may be reluctant to pay for needed care and thus fail to get therapy when it is still effective,  individuals may pay for needed care by using a large portion of their resources and thus risk impoverishment. Despite these perils that are extremely critical for the health situation but also the overall economic performance in low- and middle-income countries, OOP is particularly important in the developing world. Some low income countries meet more than 2/3 of their total health care spending through OOP. Unlike Social Insurance, PHI is usually (but not always) voluntary, which may leave the risk-pool relatively small. This has certain consequences that may be problematic from a policy maker’s point of view. In risk-rated schemes, premiums are primarily based on individual health risks and not on a person’s income. In community- or group-rated schemes, on the other hand, the relatively small pool will make cross-