This policy note is designed to support the development of the health financing strategy in Tanzania. It is directed at decision makers in the areas of health and social policy as well as the Ministry of Finance, which will play a crucial role in integrating the financial implications of this note into the overall fiscal situation in Tanzania. It is also hoped that this note will stimulate debate among interested stakeholders on the best funding modalities for health and the most appropriate ways to integrate those modalities. On the basis of the data and options described in this policy note, the World Bank will work with authorities and other interested stakeholders to develop a financing program to support the needed reforms in these sectors. This policy note provides background information, cross-country examples, and policy options, which can all be incorporated into the development of a comprehensive health financing strategy. It also provides a framework for looking at the various elements of the health financing system, and it explores the financial, economic, and health system implications of a number of the options.