The health service provision involves contracts between three separate parties:
1. the beneficiaries, or patients;
2. the fundholders or purchasers acting on behalf of the beneficiaries, and;
3. the providers of services.

Benefits or services are supplied in kind to patients, and may be free-of-charge to them. The providers are independent and contractual payments to them are paid either by capitation, fee-for-service, or by another means that health service-funding bodies charge for services.

Adapted from World Health Organization. Terminology. A glossary of technical terms on the economics and finance of health services. Internet. Accessed December 18, 2015.