MEASURING NEED IN THE NATIONAL HEALTH SERVICE RESOURCE ALLOCATION FORMULA: STANDARDIZED MORTALITY RATIOS OR SOCIAL DEPRIVATION?

Abstract

All methods of dividing public expenditure between competing claims become contentious, particularly when they rely on social indicators of need. The Resource Allocation Working Party (RAW) formula devised in 1976 for distributing National Health Service financial resources fairly between different parts of England relies on the size, age/sex structure and mortality rates (in the form of standardized mortality ratios – SMRS) of populations as combined surrogates for their need for health care. This paper aims to demonstrate three things: first, that RAW'S approach in selecting SMRS was sure‐footed; second, that no better proxy of health care need which could be used in RAW has been produced since RAW; and third, that the continuing criticism of SMRS has been sustained by political pressures within the NHS. The result has been the application of ever more indirect and complex surrogates for‘need in the resource allocation process which are known to be contaminated by the prevailing unequal supply of health service facilities.