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Pneumococcal vaccination of older persons is thought to be cost-effective in preventing pneumococcal pneumonia, but evidence of clinical protection is uncertain. Because there is better evidence of vaccination effectiveness against invasive pneumococcal disease, we determined the cost-effectiveness of pneumococcal vaccination of persons aged > or =65 years in preventing hospital admission for both invasive pneumococcal disease and pneumococcal pneumonia in 5 western European countries. In the base case analyses, the cost-effectiveness ratios for preventing invasive disease varied from approximately 11,000 to approximately 33,000 European currency units (ecu) per quality-adjusted life year (QALY). Assuming a common incidence (50 cases per 100,000) and mortality rate (20%-40%) for invasive disease, the cost-effectiveness ratios were <12,000 ecu per QALY in all 5 countries. For preventing pneumococcal pneumonia, vaccinating all elderly persons would be highly cost-effective to cost saving. Public health authorities should consider policies for encouraging pneumococcal vaccination for all persons aged > or =65 years.

This article summarises, extends and updates previous empirical work on the distributional implications of alternative health care financing arrangements in a selection of European countries and the US. On the one hand, total health care payments are almost proportional to ability to pay in most countries. This is predominantly driven by a high reliance on public financing. On the other hand, private payments – out‐of‐pocket payments as well as private insurance premiums – are highly regressive. More extended reliance on private financing may therefore endanger the equitable nature of financing systems. In addition, private payments put a heavy burden on unfortunate households.

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