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This article reviews the main modes of regulating health systems in Europe and industrialised countries. Regulation aims to reconcile four contradictory objectives: securing the best possible quality at reasonable expense, whilst ensuring fair distribution and encouraging innovation. Equity is frequently taken to be beyond consideration; only countries with a decreasing allocation of resources consider it a full-blown problem. But regulation is mainly concerned with reconciling quality and overall cost. Two approaches may be distinguished: the first treats health providers as factors of production managed by the regulator, whereas the second, on the contrary, treats providers as suppliers operating in a market and encourages them to behave in an optimal manner, providing effective care without spending too much. The market may either be stimulated by a central planner or genuinely established by letting buyers – i.e. patients – select the producers offering the best quality at the best price (patients not always being the best placed to do so, however). Regulation via the market requires the introduction of intermediary players between final consumers and producers. Finally, the article lists (contradictory) arguments justifying the different types of intervention by the regulator in terms of innovation.