Cross-Regional Equality in Health Care Funding

In Ireland, as in many other countries, much health care provision is State funded and State provided. Equity, in the sense of equality of 'treatment' for individuals with the same health needs irrespective of their geographical locations, or incomes, has been, and is, very much stressed as an appropriate policy objective. However, health care delivery in Ireland (and in some other countries including the UK) operates through regionally based Health Boards responsible for provision in their own regions. This implies mechanisms for funding allocations to Boards that allow for the corresponding regional needs, but the choice of mechanism is not at all a simple or non-contentious topic. It is important though, and so a very appropriate topic for research by the National Institute for Regional and Spatial Analysis. This Working Paper is at least a first step in a relevant investigation. Following much research, formulae have been developed in the UK for the allocation of health care funding across regions with the objective of attaining regional equity in health care. The formulae employ criteria such as regional populations, age and gender distributions, and regional morbidity and socio-economic measures. The UK work is a natural starting point for corresponding Irish formulae. So one theme of this paper is a critical review of the UK's formula based system, looking at the theory and methodology underlying the derivation of formulae and assessing how the system has actually worked in Northern Ireland. However, we think it is also important to critically examine the apparent primacy granted to the objective of equity attainment. As regards the first theme, we conclude some assumptions are implausible and some issues unresolved and we discuss the implications should a formula based regional allocation strategy be desired for Ireland. As regards the second theme, we find that healthcare equity - in spite of its primacy in many minds - is an elusive entity, very hard to measure, let alone achieve. Making it a primary objective in health care provision carries a price as regards attainment of other objectives and this, along with its elusiveness, deserves consideration by health economists and policy makers.