Chapter 2 describes different definitions and conceptualizations of health systems. It presents a proprietary framework that adopts a systems view of health systems. In the authors’ framework they conceptualize health systems as a collection of functions that interact to produce outputs that in turn are used to produce outcomes. Health systems functions consist of organization and governance, financing, and resource management. These functions are used to produce health system outputs, namely public health services and personal healthcare services. Policymakers use policies to ensure the health system outputs are effective, efficient, equitable, and responsive to achieve the right level and distribution of health system outcomes, namely population health, financial protection, and user satisfaction. The health system is situated in a dynamic and changing context with which it interacts and is influenced by it. The context is shaped by demographic, epidemiological, political, legal and regulatory, economic, sociocultural, ecological, and technological changes and shifts that create opportunities and threats to which the health system must respond. Policymakers need to consider how to design health systems to ensure that they are not only responsive and resilient to the opportunities and threats created by contextual changes and shifts but also that they ensure the right balance of effectiveness, efficiency, equity, and responsiveness for the system outputs to achieve desired level and distribution of outcomes.