¹A health system is the sum total of all the organizations, institutions and resources whose primary purpose is to improve health. A health system needs staff, funds, information, supplies, transport, communications and overall guidance and direction. And it needs to provide services that are responsive and financially fair, while treating people decently.

A good health system improves people’s lives tangibly every day. A mother who gets a letter reminding her that her young son is due for immunization against a life-threatening illness is benefiting from a health system. The same holds true for a family finally able to access clean water at a well-tended pump in its village because of a government sponsored sanitation project; or a person with HIV/AIDS who gets antiretroviral medicine, nutritional counselling and regular check-ups at an affordable clinic.

The ultimate responsibility for the overall performance of a country's health system lies with government, but good stewardship by regions, municipalities and individual health institutions is also vital.

Strengthening health systems and making them more equitable have been recognized as key strategies for fighting poverty and fostering development.

Problems with health systems are not confined to poor countries. Some rich countries have large populations without access to care because of inequitable arrangements for social protection. Others are struggling with escalating costs because of inefficient use of resources.

¹Health insurance is only one way people can get coverage for medical care. Governments that want to make sure all their people have access to health services provide social health protection—a system of affordable insurance or a government-funded program that allows them to access essential health services without risking impoverishment or severe financial hardship.

Different countries have different approaches to social health protection, but all have one thing in common: a system called a risk pool. A risk pool allows a large group of people to share the risk that they may become ill and need expensive care. That means funds dedicated for health care are collected through pre-payment, and managed in such a way as to ensure that the risk of having to pay for health care is borne by all the members of a pool and not by each contributor individually.

At any given time, healthy people—who need only limited health care—are subsidizing sick people, who must draw more heavily on the available health resources.

A risk pool can be managed two ways:

1. Tax-funded health financing: a government makes use of general tax revenue to finance health care. All people are entitled to services; coverage is therefore universal.
   
   
2. Social health insurance: contributions for health care are collected from workers, self-employed people, enterprises and the government. These monies are pooled into a social health insurance fund or funds. Universal coverage can be achieved with this type of financing scheme only if contributions are made on behalf of each member of the population and contributions are individualized based on people's ability to pay. For this reason most social health insurance schemes combine different sources of funds, and the government contributes on behalf of people who cannot afford to pay themselves.

In some countries, part of the population is covered directly through general taxes, while others are required to make contributions to a social health insurance fund or another type of health insurance, which may be private.