A century ago, health services absorbed few resources and provided little benefit. Since then, advances in medical knowledge and techniques have escalated both the benefits and the costs. The affordability of health services is being questioned in even the richest countries, and the economic aspects of health policy have become ever more intrusive. Australia is no exception, with its health system now absorbing 19% of all government tax revenue. Familiarity with economic issues - such as how to assess health outcomes, how to assign resources efficiently and what financial arrangements will promote equity as well as efficiency - is essential to understanding health policy. This is especially so at a time when the economics of health care are being internationally re-examined, with new forms of competition, challenges to public ownership and case-mix funding of hospitals under scrutiny, and a re-evaluation of the benefits of pharmaceuticals and new technologies underway. Economics and Australian Health Policy offers this understanding to readers with and without formal economic training. It starts with an introduction to both the economic way of thinking about health systems, and the context in which those economic questions are raised - the structure of the Australian health system, its culture and its patterns of financial flows. It then describes and appraises from an economic perspective the major components of the system and the policy issues which arise. This collection has been specially commissioned to address both Australia's most pressing policy issues and the needs of public health and health economic policy-makers, academics, commentators and students. The list of contributors reads like a who's who in Australian health economics, who have been encouraged, clearly successfully, to write accessibly yet with authority and conviction.