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Cross-Regional Equity in Health Care Funding

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Abstract

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.

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Bibliographic Info

Paper provided by National Institute for Regional and Spatial Analysis (NIRSA), NUI Maynooth, Ireland. in its series NIRSA Working Paper Series with number 3.

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Length: 24 pages
Date of creation: Jan 2002
Date of revision:
Handle: RePEc:nir:nirwps:wps03

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  1. George Davey Smith & Stephen Frankel & Shah Ebrahim, 2000. "Rationing for health equity: is it necessary?," Health Economics, John Wiley & Sons, Ltd., vol. 9(7), pages 575-579.
  2. Propper, Carol, 2000. "The demand for private health care in the UK," Journal of Health Economics, Elsevier, vol. 19(6), pages 855-876, November.
  3. van Doorslaer, Eddy & Wagstaff, Adam, 1992. "Equity in the delivery of health care: some international comparisons," Journal of Health Economics, Elsevier, vol. 11(4), pages 389-411, December.
  4. Roy Carr-Hill & Geoffrey Hardman & Stephen Martin & Stuart Peacock & Trevor Sheldon & Peter Smith, 1994. "A formula for distributing NHS revenues based on small area use of hospital beds," Working Papers 022cheop, Centre for Health Economics, University of York.
  5. van Doorslaer, Eddy & Wagstaff, Adam & van der Burg, Hattem & Christiansen, Terkel & De Graeve, Diana & Duchesne, Inge & Gerdtham, Ulf-G & Gerfin, Michael & Geurts, Jose & Gross, Lorna, 2000. "Equity in the delivery of health care in Europe and the US," Journal of Health Economics, Elsevier, vol. 19(5), pages 553-583, September.
  6. Peter C. Smith & Nigel Rice & Roy Carr-Hill, 2001. "Capitation funding in the public sector," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 164(2), pages 217-257.
  7. Carol Propper, 2001. "Expenditure on healthcare in the UK: a review of the issues," Fiscal Studies, Institute for Fiscal Studies, vol. 22(2), pages 151-183, June.
  8. Nolan, Brian, 1993. "Charging for Public Health Services in Ireland: Why and How?," Research Series, Economic and Social Research Institute (ESRI), number PRS19.
  9. Richard Blundell & Frank Windmeijer, 2000. "Identifying demand for health resources using waiting times information," IFS Working Papers W00/03, Institute for Fiscal Studies.
  10. Wagstaff, Adam & van Doorslaer, Eddy, 1992. "Equity in the finance of health care: Some international comparisons," Journal of Health Economics, Elsevier, vol. 11(4), pages 361-387, December.
  11. Wagstaff, Adam & van Doorslaer, Eddy & Paci, Pierella, 1991. "On the measurement of horizontal inequity in the delivery of health care," Journal of Health Economics, Elsevier, vol. 10(2), pages 169-205, July.
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Cited by:
  1. Ignacio Abásolo & Jaime Pinilla & Miguel Negrín, 2008. "Equity in the utilization of public health care services by regions in Spain: a multinivel analysis," Hacienda Pública Española, IEF, vol. 187(4), pages 87-106, December.
  2. Hugh Gravelle & Matthew Sutton & Stephen Morris & Frank Windmeijer & Alastair Leyland & Chris Dibben & Mike Muirhead, 2003. "Modelling supply and demand influences on the use of health care: implications for deriving a needs-based capitation formula," Health Economics, John Wiley & Sons, Ltd., vol. 12(12), pages 985-1004.

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