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Business Description: Alvin Pates as a voluntarily identifies some efforts from the countries to provide basic health facilities and to prevent diseases in their countries. He says that, governments use fiscal policy to encourage healthy behavior. The instruments of government for this purpose are taxes and subsidies, and direct provision of certain health services for free or at subsidized rates. Examples of fiscal policies for health are taxes on tobacco and alcohol, subsidies on certain foods, and tax incentives for health care purchases.

In the views of Alvin Pates, fiscal interventions can have various rationales, such as macroeconomic benefits, equity, or efficiency—and promoting health may or may not be the primary goal. A fiscal policy may be designed to affect some other sphere of behavior or a good other than health—for instance, education—and the effects on health or the use of health care may be indirect.

Alvin Pates says that, a fiscal policy should be effective, efficient, and cost-effective and should promote or maintain equity goals. An effective tax or subsidy reaches the intended target and alters health-related behavior in the desired manner. An efficient policy minimizes resource distortions and involves minimal administrative costs. A cost-effective policy has the lowest cost relative to the desired health goal.

According to Alvin Pates, in developing countries, where informal sectors tend to be large, providing subsidized health care is an important tool for health promotion. Some countries have chosen direct provision of health goods, whereas others combine the public provision of services with subsidized health insurance for families below a certain income cutoff. Both models require identifying the families that are unable to afford health care and the types of services that are considered public goods.