Given relatively few resources andlagging health outcomes in Yemen, the quest for equitable,cost-effective health care delivery continues as long-term,sustainable development remains a priority. This paperassesses overall value for money of the health system mainlyas indicated by an analysis of public expenditure trendsfrom 1997 until 2008 and by the degree to which health carebenefits are conferred equitably to the population. Totalhealth expenditure in 2007 accounted for 5.2 percent ofGross Domestic Product (GDP), or only PPP$ 41 per capita,with nearly 70 percent sourced by direct household payments(67 percent). Despite recent improvements in health status,Yemen continues to lag behind countries of similar or lowerincome and health expenditure levels. Levels of healthoutcomes in Vietnam, Indonesia and the Kyrgyz Republic are 2to 6 times better than levels found in Yemen regarding theproportion of infants with low birth weight, the prevalenceof malnutrition amongst children, the rate of birthsdelivered by skilled attendants, and the rate of coverage ofantenatal services. Although health facilities arerelatively evenly distributed across the population, theoperational status and quality of these facilities is highlyvariable. The availability of pharmaceuticals at healthfacilities ranges from 31 percent of facilities havingmedications on site in the governorate of Al-Maharah to 94percent in Amran. To more effectively alleviate inequitiesand inefficiencies in health service delivery in Yemen,national policies are recommended to more strategicallyprioritize resource allocation and develop innovativeservice delivery models to more efficiently connect rural communities.