This article gives a short summary of the organisation and financing of health services of the 12 Member States of the European Union. It then describes the latest developments in cost containment in each of the countries. The third section describes the new initiatives for reform in Spain, Italy, the Netherlands, Portugal and the United Kingdom. Finally, it gives a summary of the cost containment measures in the 12 countries, listing them under a set of headings. They are classified as budget control, alternatives to hospital care, cost sharing, influencing authorizing behaviour and limits on supply. The article shows the considerable convergence of policies which is developing. Overall budget control in some form is to be found in 8 of the countries. Where providers are paid by a number of different insurers, budgets are nevertheless applied to hospitals in three countries and in another only to public hospitals. Both Germany and France have used budgets to control other items of expenditure. Profits or the prices of drug companies are controlled in 8 countries and in one indirectly. Three have adopted reference price systems for drugs and another has taken powers to do so. Two have adopted or are moving towards provider markets.