When viewed from the perspective of the policy analyst, observed inequities in the access to health services and the rising costs of physician and hospital care are among the most important issues confronting the American health delivery system. Recognizing that publicly financed health insurance programs result in a more equitable distribution of medical services, this paper focuses on the components of a national health insurance scheme that not only offers a comprehensive range of benefits but also employs prospective payment and a set of financial incentives to control the costs of care provided by physicians, hospitals, and other health facilities. The national health insurance program proposed in this paper is designed to eliminate or reduce unwarranted expenditures on plant and equipment; the responsibility for approving and funding capital acquisitions is also regarded as an integral component of the program.