Taxation and health care financing - Essay Example

Health care financing is one of the most fundamental issues faced by every society which has some health care services to provide to its members. Health Care Financing is a term which often refers to the means and sources required to provide health care services. However, it is also critical to understand that sourcing of financing the healthcare do not only include just the money but it also include the voluntary sources such as rendering of voluntary services as well as gifts received in kind.

The issue of financing health care is critical in the sense that the quantum of financing defines the overall quality of basic health care provision.While discussing healthcare financing, it is also important to understand the sources of financing i.e. from where to raise the money, how those sources are used and who controls them therefore, what is critical is the fact that health care financing is not just limited to the monetary aspect of financing but it also requires careful management of various other non-monetary aspects of health care financing too.

While discussing the sources of financing for health care, taxation is one of the major sources which can help raise the necessary funds to leverage healthcare provision on much larger scale. Taxation is also important because of it is probably the largest source of revenue for any government to fund its expenses including expenditure on health care. This paper will discuss some of the advantages of using taxation to finance health care. Taxation and Health Care Financing One of the most important sources of raising general revenue for healthcare financing is general taxes imposed by State.

Important sources of taxes include income taxes, excise duties as well as various business taxes however, what is important is how the government allocates funds raised by charging such taxes. Though, such taxes are general in nature and the allocation of such resources depends upon the general priorities of the respective government however, If government's priorities include providing sustainable health care provision than government may divert substantial sources of funds to health care services.

(Goodman & Waddington, 2008). UK's population is increasingly becoming old as well as obese therefore the overall expenditure on healthcare services is forecasted to increase in coming years. It is therefore, being proposed that specific taxes shall be levied for raising the standards of healthcare services in the country. According to one survey by BBC, in 2002, 69% of the respondents suggested to levy taxes for NHS. Similarly, obesity is increasing the overall costs to be incurred on providing quality healthcare services.

Leicester & Windmeijer (2004) are of the opinion that a Fat tax should be imposed on foods which contain high fat or salt in order to control the prevalence of obesity in the country. (Leicester & Windmeijer, 2004). This is because of the fact that increase in obesity rates are increasing the overall budgets for healthcare services as service providers have to divert substantial resources to cure obese people with common diseases such as Cardiac problems, Hypertension, high sugar glucose levels etc.

therefore, by levying taxes, substantial revenue sources can be generated in order to improve the general health standards of the masses. Advantages of Taxation There are different advantages of taxation for financing health care as increase in quantum of government revenue would mean greater resources to be diverted to upgrade the current state of healthcare in the country. Increasing the tax base for financing the healthcare services would therefore provide an incentive to the consumers for receiving better and much improved health care services.

It is also important to understand that since taxation serve as a general source of revenue for the countries however, in most of the case; it is not earmarked for particular sectors of public healthcare services. By levying taxes specifically for healthcare se