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Regional differences in health care delivery: implications for a national resource allocation formula

Author

Listed:
  • Matthew Sutton

    (National Primary Care R&D Centre, Centre for Health Economics, University of York, UK)

  • Peter Lock

    (Ayrshire and Arran Health Board, Ayre, UK)

Abstract

In several countries formulae for allocating resources to regions are derived using national average relationships between population characteristics and health service use. However, there may be significant regional heterogeneity in health care delivery which, has two main implications for a national resource allocation formula. First, it offers alternative ways of measuring the relative needs of different population groups. Since the primary focus of research and policy is on the difficulty of targeting resources at high-need populations, it is proposed that progressivity in the delivery of health care could be seen as a frontier problem analogous to efficiency. The effects of using the slope parameters from the most progressive region are simulated. Second, regional heterogeneity may thwart the objective of the formula of securing equitable use of resources by different population groups. An adjustment mechanism is developed to illustrate the trade-off between the levels of geographical and vertical equity achieved. A locus of equity possibilities for acute care in Scotland is derived. Traditional formulae represent a corner solution indicating extreme relative aversion to geographical inequity. Because regional variation in need dominates regional variation in progressivity in Scotland, high-need rather than progressive regions gain from the pursuit of vertical equity. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • Matthew Sutton & Peter Lock, 2000. "Regional differences in health care delivery: implications for a national resource allocation formula," Health Economics, John Wiley & Sons, Ltd., vol. 9(6), pages 547-559.
  • Handle: RePEc:wly:hlthec:v:9:y:2000:i:6:p:547-559
    DOI: 10.1002/1099-1050(200009)9:6<547::AID-HEC543>3.0.CO;2-E
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    References listed on IDEAS

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    1. Fare,Rolf & Grosskopf,Shawna & Lovell,C. A. Knox, 2008. "Production Frontiers," Cambridge Books, Cambridge University Press, number 9780521072069.
    2. 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.
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    Cited by:

    1. Anselmi, Laura & Lagarde, Mylène & Hanson, Kara, 2015. "Going beyond horizontal equity: An analysis of health expenditure allocation across geographic areas in Mozambique," Social Science & Medicine, Elsevier, vol. 130(C), pages 216-224.
    2. Derek Bond and Prof. Denis Conniffe, 2002. "Cross-Regional Equity in Health Care Funding," NIRSA Working Paper Series 3, National Institute for Regional and Spatial Analysis (NIRSA), NUI Maynooth, Ireland..
    3. Bond, Derek & Conniffe, Denis, 2003. "Allocating Funding across Health Boards - Is Equity Easy?," Papers HRBWP05, Economic and Social Research Institute (ESRI).
    4. Katharina Hauck & Rebecca Shaw & Peter C. Smith, 2002. "Reducing avoidable inequalities in health: a new criterion for setting health care capitation payments," Health Economics, John Wiley & Sons, Ltd., vol. 11(8), pages 667-677.
    5. Masayoshi Hayashi, 2011. "The effects of medical factors on transfer deficits in Public Assistance in Japan: a quantile regression analysis," International Journal of Health Economics and Management, Springer, vol. 11(4), pages 287-307, December.
    6. Benning, Tim M. & Dellaert, Benedict G.C., 2013. "Paying more for faster care? Individuals' attitude toward price-based priority access in health care," Social Science & Medicine, Elsevier, vol. 84(C), pages 119-128.
    7. Matthew Sutton, 2002. "Vertical and horizontal aspects of socio-economic inequity in general practitioner contacts in Scotland," Health Economics, John Wiley & Sons, Ltd., vol. 11(6), pages 537-549.
    8. repec:hal:journl:halshs-00879787 is not listed on IDEAS
    9. Van de Poel, Ellen & Van Doorslaer, Eddy & O’Donnell, Owen, 2012. "Measurement of inequity in health care with heterogeneous response of use to need," Journal of Health Economics, Elsevier, vol. 31(4), pages 676-689.

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