This study, done at the request of theHungarian government, presents evidence on cost-sharing inthe health sector, and its application in Hungary. Itpresents results on the impact of cost-sharing on revenuesin health facilities and insurance, financialsustainability, informal payments, overall service use, andequity in access. Five keyfindings emerge: cost-sharingcould lead to a reduction in unnecessary care provided toinsured patients who do not have to pay the full price ofcare; cost-sharing could help reduce informal payments andkeep patient payments in the system; cost-sharing withexemption policies are a prerequisite to provide equity inaccess to care; cost-sharing could support cost containmentstrategies; experience from OECD countries provides examplesof successful cost-sharing policies. Based on thesefindings. the study recommends that Hungary continues tomonitor and evaluate the impact of cost-sharing on access,to identify possible negative effects on equity in serviceuse. In Hungary, financial incentives through the providerpayment system could eventually support the effect of thegovernment supply-side strategy. Such financial incentivescould be set to providers through capitation payment toreward better quality of care, and Diagnosis Related Group(DRG) payments with expenditure ceilings with strictutilization review and quality assurance control to set anincentive for efficient provision of care.