IDEAS home Printed from
   My bibliography  Save this paper

Needs-Based Health Care Funding: Implications for Resource Distribution in Ontario


  • Kelly Bedard
  • John Dorland
  • Allan W. Gregory
  • Joanne Roberts


Capitation models have been suggested as an alternative to funding methods based on historical utilization patterns. Capitation funding distributes resources to regions or programs according to their population, adjusted for the age and gender composition and relative need. The most commonly used relative needs measure is the Standardized Mortality Ratio (SMR). This paper compares the distribution of resources in Ontario implied by a variety of capitation formula. Another aspect of this research is to design a mechanism that translates the SMR into a funding allocation index. We specify a non-linear model to capture the relationship between current expenditures and the SMR while controlling for historical utilization factors. In contrast to previous work which has assumed a linear relationship between expenditures and need, our estimates suggest that the relationship may actually be highly non{linear. This non-linearity increases transfers to regions of relative need relative to a linear capitation program. The authors thank the National Health Research and Development Program (NHRDP) for nancial support. Bedard also thanks the Canadian International Labour Network (CILN) at McMaster University, and Roberts thanks the Social Science and Humanities Research Council of Canada for nancial support. We thank John Burbidge, David Feeny, Paul Grootendorst, and four anonymous referees for helpful comments. We are grateful to D. O'Mahonie, P. Brenders, M. Zwyer, and S. Charbonneau at the Ontario Ministry of Health for providing us with data. Keywords: Capitation Funding, Standardized Mortality Ratios, Region, Age, and Gender.

Suggested Citation

  • Kelly Bedard & John Dorland & Allan W. Gregory & Joanne Roberts, 1999. "Needs-Based Health Care Funding: Implications for Resource Distribution in Ontario," Working Papers jorob-99-03, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:jorob-99-03

    Download full text from publisher

    File URL:
    File Function: MainText
    Download Restriction: no

    Other versions of this item:


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Kelly Bedard & John Dorland & Allan W. Gregory & Mark Rosenberg, 1999. "Standardized Mortality Ratios and Canadian Health-Care Funding," Canadian Public Policy, University of Toronto Press, vol. 25(1), pages 47-64, March.
    2. Marcelin Joanis & David Boisclair & Claude Montmarquette, 2004. "La santé au Québec : des options pour financer la croissance," CIRANO Project Reports 2004rp-04, CIRANO.
    3. Montero Granados, Roberto & Jimenez Aguilera, Juan de Dios & Martin Martin, Jose Jesus, 2007. "Estimation of an index of regional health needs in Spain using count regression models with filter," Health Policy, Elsevier, vol. 81(1), pages 4-16, April.

    More about this item


    Capitation Funding; Standardized Mortality Ratios; Region; Age; and Gender.;

    JEL classification:

    • I0 - Health, Education, and Welfare - - General
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tor:tecipa:jorob-99-03. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RePEc Maintainer). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.