The World Health Report financing, in addition to ensuring cross-subsidies from low to high risk(which will happen in any pool, unless contributions are risk-related), should also ensure that such subsidies (see Figure 5.1) Health systems throughout the world attempt to spread risk and subsidize the poor through various combinations of organizational and technical arrangements(22). Both risk and income-related cross-subsidies could occur among the members of the same pool, for example in single pool systems such as the Costa Rican social security organization and the ational health service in the UK, or via government subsidies to a single or multiple pool In practice, in the majority of health systems, risk and income cross-subsidization oc curs via a combination of two approaches: pooling and government subsidy. Cros subsidization can also occur among members of different pools (in a multiple pool system via explicit risk and income equalization mechanisms, such as those being used in the social security systems of Argentina(23), Colombia(24)and the Netherlands(25). In these countries, the existence of multiple pools allows members of pools to have different risk and income profiles Without some compensatory mechanisms, such arrangements would offer incentives for pooling organizations to select low risks, and to exclude the poor and the sick Even under single pool organizations, decentralization, unless accompanied by equali zation mechanisms for resource allocation, may result in significant risk and income differ- ences among decentralized regions. Brazil has introduced compensatory mechanisms in the allocation of revenues from the central government to the states to reduce such differ- ences(26) Table 5.2 shows four country examples of different arrangements for spreading risk and subsidizing the poor. Some organizational arrangements are less efficient than others in ensuring that these two objectives are achieved, particularly if the arrangements facilitate fragmentation, creating numerous small pools. Collecting, pooling, purchasing and provi- Figure 5.1 Pooling to redistribute risk, and cross-subsidy for greater equity (arrows indicate flow of funds) Contribution Net transfer Utilization bsid100 The World Health Report 2000 financing, in addition to ensuring cross-subsidies from low to high risk (which will happen in any pool, unless contributions are risk-related), should also ensure that such subsidies are not regressive (see Figure 5.1). Health systems throughout the world attempt to spread risk and subsidize the poor through various combinations of organizational and technical arrangements (22). Both risk￾and income-related cross-subsidies could occur among the members of the same pool, for example in single pool systems such as the Costa Rican social security organization and the national health service in the UK, or via government subsidies to a single or multiple pool arrangement. In practice, in the majority of health systems, risk and income cross-subsidization oc￾curs via a combination of two approaches: pooling and government subsidy. Cross￾subsidization can also occur among members of different pools (in a multiple pool system) via explicit risk and income equalization mechanisms, such as those being used in the social security systems of Argentina (23), Colombia (24) and the Netherlands (25). In these countries, the existence of multiple pools allows members of pools to have different risk and income profiles. Without some compensatory mechanisms, such arrangements would offer incentives for pooling organizations to select low risks, and to exclude the poor and the sick. Even under single pool organizations, decentralization, unless accompanied by equali￾zation mechanisms for resource allocation, may result in significant risk and income differ￾ences among decentralized regions. Brazil has introduced compensatory mechanisms in the allocation of revenues from the central government to the states to reduce such differ￾ences (26). Table 5.2 shows four country examples of different arrangements for spreading risk and subsidizing the poor. Some organizational arrangements are less efficient than others in ensuring that these two objectives are achieved, particularly if the arrangements facilitate fragmentation, creating numerous small pools. Collecting, pooling, purchasing and provi￾Figure 5.1 Pooling to redistribute risk, and cross-subsidy for greater equity (arrows indicate flow of funds) Pooling (across equal incomes) Risk Low High Subsidy (across equal risks) Income Low High Contribution Net transfer Utilization