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Health services require adequate and continuous financing to provide preventive, promotive, curative, rehabilitative and palliative care. Financing of health services refers to the methods through which money is raised, pooled and used to meet the costs of health care. Proper financing is essential for establishing health facilities, purchasing medicines and equipment, paying health personnel, maintaining infrastructure, conducting health programmes and ensuring access to care. The sources of financing differ according to the economic system, government policies, health-care structure and level of development of a country. Government financing is one of the most important sources of health-service financing. The government collects revenue through direct and indirect taxes, duties, fees and other sources and allocates a portion of its budget to health services. Central, state and local governments may contribute funds for hospitals, primary health centres, community health centres, disease-control programmes, immunization, maternal and child health services, sanitation and health education. Government financing helps provide health services to economically disadvantaged and vulnerable populations. Public expenditure is particularly important for preventive and promotive services because such services benefit the entire community. Taxation is therefore a major mechanism through which governments finance health services. Income tax, corporate tax, goods and services taxes, customs duties and other forms of taxation generate public revenue. A portion of these revenues may be directed towards health programmes. Tax-funded health systems can reduce the financial burden on individuals because health services are financed collectively. The extent of health financing through taxation depends on government priorities, national income and the effectiveness of tax collection. Social health insurance is another important source. Under this system, employees, employers and sometimes the government contribute to an insurance fund. The collected contributions are pooled and used to pay for health services when beneficiaries require treatment. Social health insurance promotes risk sharing because the ___ _______ _____ ___ ____ __________ _______.
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