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A needs-based methodology for allocating health care resources in Ontario, Canada: Development and an application


  • Eyles, J.
  • Birch, S.
  • Chambers, S.
  • Hurley, J.
  • Hutchison, B.


In an attempt to limit its health care expenditures, Ontario is, as one option, exploring the possibilities of a capitated system for service delivery payments as opposed to the present mixture of global budgets and fee-for-service. After reviewing the literatures on capitation (primarily American) and on resource allocation (primarily British), the paper sets out to establish a capitation rate, based on 'need' and not prior use, for a range of health services in the northern Ontarian community of Fort Frances-Rainy River. The difficulties and limitations of the needs-based approach are explored. The results reported show the setting of the local population characteristics against provincial average health care utilization data to generate expected use rates, which are then adjusted for need and other factors, particularly relative costs and sparsity. Finally these adjusted rates are applied to current provincial expenditures to derive a target share. This target is then expressed in relation to the planning population to derive the capitation rate.

Suggested Citation

  • Eyles, J. & Birch, S. & Chambers, S. & Hurley, J. & Hutchison, B., 1991. "A needs-based methodology for allocating health care resources in Ontario, Canada: Development and an application," Social Science & Medicine, Elsevier, vol. 33(4), pages 489-500, January.
  • Handle: RePEc:eee:socmed:v:33:y:1991:i:4:p:489-500

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    Cited by:

    1. Gugushvili, Alexi, 2007. "The advantages and disadvantages of needs-based resource allocation in integrated health systems and market systems of health care provider reimbursement," MPRA Paper 3354, University Library of Munich, Germany.
    2. Stephen Birch & George Kephart & Gail Tomblin-Murphy & Linda O'Brien-Pallas & Rob Alder & Adrian MacKenzie, 2007. "Human Resources Planning and the Production of Health: A Needs-Based Analytical Framework," Canadian Public Policy, University of Toronto Press, vol. 33(s1), pages 1-16, January.
    3. Crighton, Eric J. & Elliott, Susan J. & Moineddin, Rahim & Kanaroglou, Pavlos & Upshur, Ross, 2007. "A spatial analysis of the determinants of pneumonia and influenza hospitalizations in Ontario (1992-2001)," Social Science & Medicine, Elsevier, vol. 64(8), pages 1636-1650, April.
    4. McDermott, Robyn & Beaver, Carol & Zhao, Yuejen, 1997. "Outcomes-based resource allocation for indigenous health services: a model for Northern Australia?," Health Policy, Elsevier, vol. 39(1), pages 69-78, January.


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