An appropriate health care financing scheme can improve the efficient, equitable, and effective use of health care resources; however, each popular health care financing scheme has some advantages and disadvantages. The designing of health care financing strategy to fit with the country specific features is not straightforward. In resource poor country, allocation of resources for health care services are always critical and frequently unstable due to nuances annual budget process, small fiscal space, uncertainties in contributions of external development partners. Considerable quantities of country specific researches require for the choice of an appropriate health care financing scheme. The paper illustrates possible better options for the government to pursue the goal of ensuring that the poor receive more benefits. The paper compares the benefit incidences and cost of services with different options purposed for primary health care services by utilizing recently collected data from different hospitals in Nepal. The paper offers an alternative policy such as a universal free care below the district level services; but in the district level which is top level of primary care, “extended targeted free health care” may be an efficient, fair, and relatively simple approach.
 Xu, K., Evans, D.B., Kadama, P., Nabyonga, J., Ogwal, P.O., Nabukhonzo, P. and Aguilar, A.M. (2006) Understanding the impact of eliminating user fees: Utilization and catastrophic health expenditures in Uganda. Social Science & Medicine, 62, 866-876. doi:10.1016/j.socscimed.2005.07.004
 Lagarde, M. and Palmer, N. (2008) The impact of user fees on health service utilization in low-and middle-income countries: How strong is the evidence? Bulletin of the World Health Organization, 86, 839-848. doi:10.2471/BLT.07.049197
 Laterveer, L., Munga, M. and Schwerzel, P. (2004) Equity implications of health sector user fees in Tanzania. Do we retain the user fee or do we set the user f(r)ee? Analysis of literature and stakeholder views. Research for Poverty Alleviation (REPOA), ETC Crystal Leusden.
 Adhikari, S.R. and Maskay N.M. (2004) Health sector policy in the first decade of Nepal’s multiparty democracy: Does clear enunciation of health priorities matter? Health Policy, 68, 103-112. doi:10.1016/j.healthpol.2003.09.008
 O’Donnell, O., van Doorslaer, E., Wagstaff, A., and Lindelow, M. (2008) Analyzing health equity using household survey data: A guide to techniques and their implementation. World Bank, Washington DC.
 O’Donnell O., van Doorslaer, E., Rannan-Eliya, R.P., Somanathan, A., Adhikari, S.R., Harbianto, D., Garg, C.C., et al. (2007) The incidence of public spending on healthcare: Comparative evidence from Asia. The World Bank Economic Review, 21, 93-123. doi:10.1093/wber/lhl009
 Mwabu, G., Ainsworth, M. and Nyamete, A. (1993) Quality of medical care and choice of medical treatment in Kenya: An empirical analysis. Journal of Human Resources, 28, 838-862. doi:10.2307/146295
 WHO (2009) South East Asian region and western pacific region health financing strategies for the Asia Pacific region 2010-2015. South East Asian Region and Western Pacific Region, World Health Organization.