Resource Allocation Formula Research Articles

Assessing equity and efficiency of health financing towards universal health coverage between regions in Tanzania

Equity and efficiency in health financing are intermediate universal health coverage (UHC) objectives. While there is growing attention to monitoring these goals at the national level, subnational assessment is also needed to uncover potential divergences across subnational units. We assessed whether health funds were allocated or contributed equitably and spent efficiently across 26 regions in Tanzania in 2017/18 for four sources of funding. Government and donor health basket fund (HBF) expenditure data were obtained from government authorities. Household contributions to health insurance and out-of-pocket payments were obtained from the national household budget survey. We used the Kakwani index (KI) to measure regional funding equity, whereby regional GDP per capita measured regional economic status. Efficiency analysis included four financing inputs and two UHC outputs (maternal health service coverage and financial protection indices). Data envelopment analysis estimated efficiency scores. There was substantial variation in per capita regional funding, especially in insurance contributions (TZS 473–13,520), and service coverage performance (49–86.3%). There was less variation in per capita HBF spending (TZS 1294–2394) and financial protection (93.5–99.4%). Government spending (KI: -0.047, p = 0.348) was proportional to regional economic status; but HBF spending (KI: -0.195, p < 0.001) was significantly progressive (equitably distributed), being targeted to regions with high economic need (poor). The burden of contributing to social health insurance (NHIF) was proportional (KI: 0.058, p = 0.613), while the burden of paying for community-based insurance (CHF, KI: -0.152, p=0.012) and out-of-pocket payments (KI: -0.187, p=0.005) was higher among the poor (regressive). The average efficiency score across regions was 90%, indicating that 90% of financial resources were used optimally, while 10% were wasted or underutilised. Tanzania should continue mobilising domestic resources for health towards UHC, and reduce reliance on inequitable out-of-pocket payments and community-based health insurance. Policymakers must enhance resource allocation formulas, public financial management, and sub-national resource tracking to improve equity and efficiency in resource use.

How Effective is Marginal Healthcare Expenditure? New Evidence from England for 2003/04 to 2012/13.

The endogenous nature of healthcare expenditure means that instruments are often used when estimating the relationship between expenditure and mortality. Previous English studies of this relationship have largely relied on statistical tests to justify their instruments. A recent paper proposed that exogenous components of the resource allocation formula, used to distribute the national healthcare budget to local health authorities, be used as instruments. To estimate the relationship between healthcare expenditure and mortality by disease area for England from 2003/4 to 2012/13 using exogenous elements from the resource allocation formula as instruments for expenditure. To use these disease-specific estimates to calculate the marginal cost per quality-adjusted life year (QALY) for English NHS expenditure. To compare these estimates with those that relied on statistical tests to justify their instruments. The two-stage least squares estimator is used to determine the annual relationship between mortality and healthcare expenditure by disease area across 151 local authorities. These disease-specific outcome elasticities are combined with information about survival and morbidity disease burden in different disease areas to calculate the marginal cost per QALY for English National Health Service (NHS) expenditure. The results suggest an annual marginal cost per QALY of between £5000 and £10,000. This is similar to that reported previously by studies that used statistical tests to justify their instruments. These cost per QALY estimates are much lower than the threshold currently used by the UK's National Institute for Health and Care Excellence (NICE) (£20,000 to £30,000) to assess whether a new pharmaceutical product should be funded by the NHS. Our estimates suggest that guidance issued by NICE is likely to do more harm than good, reducing health outcomes overall for the NHS. There may be legitimate reasons why such harms are deemed appropriate, but it is only through the type of empirical analysis in this paper that the reasons for these 'harms' are likely to be articulated and explicitly justified.

A review of appropriate indicators for need-based financial resource allocation in health systems

BackgroundOptimal, need-based, and equitable allocation of financial resources is one of the most important concerns of health systems worldwide. Fulfilling this goal requires considering various criteria when allocating resources. The present study was conducted to identify the need indicators used to allocate health resources in different countries worldwide.MethodsA systematic review conducted on all published articles and reports on the need-based allocation of health financial resources in the English language from 1990 to 2020 in databases, including PubMed, Cochrane, and Scopus as well as those in Persian language databases, including magiran, SID, and Google and Google scholar search engines. After performing different stages of screening, appropriate studies were identified and their information were extracted independently by two people, which were then controlled by a third person. The extracted data were finally analyzed by content analysis method using MAXQDA 10 software.ResultThis search yielded 823 studies, of which 29 were included for the final review. The findings indicated that many need-based resource allocation formulas attempt to deal with health care needs using some weighting methods for individuals. In this regard, the most commonly used indicators were found as follows: age, gender, socio-economic status or deprivation, ethnicity, standardized mortality ratio (SMR), the modified health indicators (disease consequences, self-assessed health, and disability), geographical area / place of residence (geographical) (rural versus urban), cross-boundary flows, cost of services, and donations.ConclusionThe indicators used in allocating the health systems’ financial resources in each country should be designed in order to be simple and transparent and in accordance with the moral norms of that society. Moreover, these should be a good representative of the health needs of people in different geographical areas of that country. In addition, their related data should be available to an acceptable extent.

Resource allocation, weaponised poverty, and deviant economies in Nigeria

ABSTRACT This article examined the implications of resource allocation for weaponised poverty and deviant economies in Nigeria. It used a quantitative method to collect data from 600 respondents randomly selected from three of the existing six geopolitical zones in Nigeria. Through purposive sampling, it selected 12 in-depth interview respondents to obtain complementary qualitative data that were content analysed. The logistic regression analysis indicated a significant relationship between resource allocation and weaponised poverty in Nigeria (β = 2.095 P value < .001). The article concludes that the presence of resources in each state of Nigeria undermines the politics of ethnic entitlement. To prevent more citizens from sliding into poverty, it suggests a paradigm shift from the political resource allocation formula (PRAF) to an equitable resource allocation formula (ERAF) alternative or an admixture of ERAF and concessional resources allocation formula (CRAF).

Levels, trends and determinants of technical efficiency of general hospitals in Uganda: data envelopment analysis and Tobit regression analysis

BackgroundGeneral hospitals provide a wide range of primary and secondary healthcare services. They accounted for 38% of government funding to health facilities, 8.8% of outpatient department visits and 28% of admissions in Uganda in the financial year 2016/17. We assessed the levels, trends and determinants of technical efficiency of general hospitals in Uganda from 2012/13 to 2016/17.MethodsWe undertook input-oriented data envelopment analysis to estimate technical efficiency of 78 general hospitals using data abstracted from the Annual Health Sector Performance Reports for 2012/13, 2014/15 and 2016/17. Trends in technical efficiency was analysed using Excel while determinants of technical efficiency were analysed using Tobit Regression Model in STATA 15.1.ResultsThe average constant returns to scale, variable returns to scale and scale efficiency of general hospitals for 2016/17 were 49% (95% CI, 44–54%), 69% (95% CI, 65–74%) and 70% (95% CI, 65–75%) respectively. There was no statistically significant difference in the efficiency scores of public and private hospitals. Technical efficiency generally increased from 2012/13 to 2014/15, and dropped by 2016/17. Some hospitals were persistently efficient while others were inefficient over this period. Hospital size, geographical location, training status and average length of stay were statistically significant determinants of efficiency at 5% level of significance.ConclusionThe 69% average variable returns to scale technical efficiency indicates that the hospitals could generate the same volume of outputs using 31% (3439) less staff and 31% (3539) less beds. Benchmarking performance of the efficient hospitals would help to guide performance improvement in the inefficient ones. There is need to incorporate hospital size, geographical location, training status and average length of stay in the resource allocation formula and adopt annual hospital efficiency assessments.

Allocating resources to support universal health coverage: policy processes and implementation in Malawi

Optimising the use of limited health resources in low-income and middle-income countries towards the maximisation of health outcomes requires efficient distribution of resources across health services and geographical areas. While...

The National Health Service (NHS) in 'crisis': the role played by a shift from horizontal to vertical principles of equity.

Explanations of the state of 'crisis' in the English National Health Service (NHS) generally focus on the overall level of health care funding rather than the way in which funding is distributed. Describing systematic patterns in the way different areas are experiencing crisis, this paper suggests that NHS organisations in older, rural and particularly coastal areas are more likely to be 'failing' and that this is due to the historic underfunding of such areas. This partly reflects methodological and technical shortcomings in NHS resource allocation formulae. It is also the outcome of a philosophical shift from horizontal (equal access for equal needs) to vertical (unequal access to equalise health outcomes) principles of equity. Insofar as health inequalities are determined by factors well beyond health care, we argue that this is an ineffective approach to addressing health inequalities. Moreover, it sacrifices equity in access to health care by failing to adequately fund the health care needs of older populations. The prioritisation of vertical over horizontal equity also conflicts with public perspectives on the NHS. Against this background, we ask whether the time has come to reassert the moral and philosophical case for the principle of equal access for equal health care need.

Factors associated with consultation rates in general practice in England, 2013-2014: a cross-sectional study.

BackgroundWorkload in general practice has risen during the last decade, but the factors associated with this increase are unclear.AimTo examine factors associated with consultation rates in general practice.Design and settingA cross-sectional study examining a sample of 304 937 patients registered at 316 English practices between 2013 and 2014, drawn from the Clinical Practice Research Datalink.MethodAge, sex, ethnicity, smoking status, and deprivation measures were linked with practice-level data on staffing, rurality, training practice status, and Quality and Outcomes Framework performance. Multilevel analyses of patient consultation rates were conducted.ResultsConsultations were grouped into three types: all (GP or nurse), GP, and nurse. Non-smokers consulted less than current smokers (all: rate ratio [RR] = 0.88, 95% CI = 0.87 to 0.89; GP: RR = 0.88, 95% CI = 0.87 to 0.89; nurse: RR = 0.91, 95% CI = 0.90 to 0.92). Consultation rates were higher for those in the most deprived quintile compared with the least deprived quintile (all: RR = 1.18, 95% CI = 1.16 to 1.19; GP: RR = 1.17, 95% CI = 1.15 to 1.19; nurse: RR = 1.13, 95% CI = 1.11 to 1.15). For all three consultation types, consultation rates increased with age and female sex, and varied by ethnicity. Rates in practices with >8 and ≤19 full-time equivalent (FTE) GPs were higher compared with those with ≤2 FTE GPs (all: RR = 1.26, 95% CI = 1.06 to 1.49; GP: RR = 1.36, 95% CI = 1.19 to 1.56).ConclusionThe analyses show consistent trends in factors related to consultation rates in general practice across three types of consultation. These data can be used to inform the development of more sophisticated staffing models, and resource allocation formulae.

Nigeria's Niger Delta Conflict, Cameroon's Bakassi Peninsula and Insecurity in The Gulf of Guinea: Assessing the Role of Multinational Oil Corporations in Africa's Incessant Conflicts

This article exposes the possibilities of a spillover of Nigeria’s Niger Delta obdurate conflict into Cameroon’s Bakassi Peninsula, given the zones’ proximity and the behaviour of actors in Africa’s conflicts. Currently, the Nigerian Government, multi-national oil corporations and Niger Delta indigenes fight over resources in the Niger Delta. While the indigenes accuse Nigeria's successive regimes for insensitively conniving with multi-national oil corporations to nefariously swindle oil resources from their indigenous environment, without addressing their socioeconomic plights; the Nigerian Government accuses the indigenes of gratuitous rebellion. This argument appears plausible for neighbouring Bakassi indigenes to raise similar grievances against Cameroon and its oil extracting partners. Using John Burton’s Human Needs Theory, we argue that, only an equitably institutionalized resource allocation formula, can forestall a resource-based conflict in Cameroon; where such a formula manifests massive human and infrastructural development emanating from indigenously friendly public and foreign policies.

Development of a resource allocation formula for substance misuse treatment services

Funding for substance misuse services comprises one-third of Public Health spend in England. The current allocation formula contains adjustments for actual activity, performance and need, proxied by the Standardized Mortality Ratio for under-75s (SMR < 75). Additional measures, such as deprivation, may better identify differential service need. We developed an age-standardized and an age-stratified model (over-18s, under-18s), with the outcome of expected/actual cost at postal sector/Local Authority level. A third, person-based model incorporated predictors of costs at the individual level. Each model incorporated both needs and supply variables, with the relative effects of their inclusion assessed. Mean estimated annual cost (2013/14) per English Local Authority area was £5 032 802 (sd: 3 951 158). Costs for drug misuse treatment represented the majority (83%) of costs. Models achieved adjusted R-squared values of 0.522 (age-standardized), 0.533 (age-stratified over-18s), 0.232 (age-stratified under-18s) and 0.470 (person-based). Improvements can be made to the existing resource allocation formulae to better reflect population need. The person-based model permits inclusion of a range of needs variables, in addition to strong predictors of cost based on the receipt of treatment in the previous year. Adoption of this revised person-based formula for substance misuse would shift resources towards more deprived areas.

Going beyond horizontal equity: An analysis of health expenditure allocation across geographic areas in Mozambique

In contexts where health services are mostly publicly provided and access is still limited, health financing systems require some mechanism for distributing financial resources across geographic areas according to population need. Equity in public health expenditure has been evaluated either by comparing allocations across spending units to equitable shares established using resource allocation formulae, or by using benefit incidence analysis to look at the distribution of expenditure across individual service users. In the latter case, the distribution across individuals has typically not been linked to the mechanisms that determine the allocation across geographic areas, and to the utilization of specific services by individuals.In this paper, we apply benefit incidence analysis in an innovative way to assess horizontal and vertical equity in the geographic allocation of recurrent expenditure for outpatient health care across districts in Mozambique. We compare the actual distribution of expenditure with horizontal and vertical equity benchmarks, set according to measures of economic status and need for health care. We quantify the observed inequities and the relative contributions of service use and resource allocation. We analyse government and donor expenditure separately and combined, for the years 2008–2011 to compare changes over time and funding source. We use data from a number of national routine sources.Results show improvements in both horizontal and vertical equity, along with the gradual alignment of government and donor resources over time, which resulted in almost horizontally and vertically equitable resource allocation in 2011. However, inequities in the distribution of expenditure across beneficiaries persisted and were driven by inequities in service use. The discrepancy between economic and need indicators highlighted initial differences in government and donor expenditure targets, raising questions about the purpose of public health expenditure and confirming the importance of clearly defining equity objectives to inform and evaluate resource allocation policies.

Exploring the Politics of Differential Resource Allocation: Implications for Policy Design and Leadership Practice

This qualitative case study explores the political and leadership challenges imbedded within the implementation of a district-wide resource reallocation policy. Based on a two-year study of a medium-sized district’s efforts to address changing demographics of families in the district and a widening achievement gap, we draw upon concepts from education finance and the politics of policymaking to better understand the strategies used to introduce and implement a differential resource-allocation formula. Leadership strategies are explored, with a focus on anticipated areas of both internal and external “pushback,” and a discussion of the cycle of political support for equity-focused policy initiatives.

Equity in the allocation of public sector financial resources in low- and middle-income countries: a systematic literature review.

This review aims to identify, assess and analyse the evidence on equity in the distribution of public health sector expenditure in low- and middle-income countries. Four bibliographic databases and five websites were searched to identify quantitative studies examining equity in the distribution of public health funding in individual countries or groups of countries. Two different types of studies were identified: benefit incidence analysis (BIA) and resource allocation comparison (RAC) studies. Quality appraisal and data synthesis were tailored to each study type to reflect differences in the methods used and in the information provided. We identified 39 studies focusing on African, Asian and Latin American countries. Of these, 31 were BIA studies that described the distribution, typically across socio-economic status, of individual monetary benefit derived from service utilization. The remaining eight were RAC studies that compared the actual expenditure across geographic areas to an ideal need-based distribution. Overall, the quality of the evidence from both types of study was relatively weak. Looking across studies, the evidence confirms that resource allocation formulae can enhance equity in resource allocation across geographic areas and that the poor benefits proportionally more from primary health care than from hospital expenditure. The lack of information on the distribution of benefit from utilization in RAC studies and on the countries' approaches to resource allocation in BIA studies prevents further policy analysis. Additional research that relates the type of resource allocation mechanism to service provision and to the benefit distribution is required for a better understanding of equity-enhancing resource allocation policies.

The spectrum of paediatric congenital heart disease at the Kenyatta National Hospital: Implications for surgical care

Background Congenital Heart Disease (CHD) is a significant cause of morbidity and mortality amongst infants and children globally. Complex heart lesions are more costly to manage than simple lesions. Geographical differences in the spectrum of CHD have been reported; knowledge of the spectrum of CHD provides a foundation for the rational allocation of health care resources. We undertook a study to determine if the CHD spectrum in Kenya differs from that encountered elsewhere in the globe. Methods A five year retrospective study was carried out at the Kenyatta National Hospital, Nairobi between January 1st 2000 and December 31st 2004. The frequency of selected CHD lesions was examined and compared with that reported from other parts of the world. Results Two hundred and fourteen patients were studied. The mean age at confirmation of diagnosis by echocardiography was 18.6 months. The frequency of ventricular septal defects, atrial septal defects, patent ductus arteriosus, tetralogy of Fallot and transposition of the great arteries, were 18.7%, 4.7%, 10.7%, 8.4%, 6.5% and 4.2% respectively. Conclusion The spectrum of CHD encountered in Kenya may contain more complex lesions than the spectrum found in developed regions of the world. Health resource allocation formulae applied to developed nations may not optimize the care of patients with CHD in developing nations. This may have important implications for health care resource allocation towards CHD in Kenya.

Revolution in the provision of dental services in the UK

The National Health Service (NHS) in England provides a comprehensive dental service funded largely from taxation but supplemented by co-payments. This paper provides a historical overview of NHS dental services and some personal reflections on the main challenges over the next five years. A narrative review of the literature and some subjective observations and comments. In 2006 there was a radical change to NHS dental services in England; central budgets were capped and general dental practitioners. Dentists who were previously paid on a fee-for-item basis moved to a new contract that required them to hit activity targets to maintain their historical income. This contract was unpopular with dentists and has been criticized for not improving access or quality. A new dental contract has been promised based on capitation. Against this background significant issues have to be addressed including: a rapidly growing gap in between demand and resources and a need to make substantial cost savings across the whole of the NHS; a significant decline in dental need; inequalities in utilisation of dental services; and provision of treatments of doubtful effectiveness. The NHS dental healthcare system faces significant challenges and consideration needs to be given to the consequences of a focus on need rather than demand. Logically this would require a needs-based resource allocation formula and a needs-based approach to service and workforce planning. A move to a needs-led service is a political decision with associated political risks.

Getting to grips with England's formula for local authority support

A Department for Communities and Local Government formula is currently granting over 20 billions of pounds sterling to the 456 local authorities (LAs) of England. This article analyses the remarkable sensitivity of the formula to coordinated changes in the small allocations to Wokingham and Richmond upon Thames (that do not change the total grant)—some big LAs experience large absolute changes in funding while small ones may undergo large percentage changes. This violation of rational principle by a world leader in the development of resource allocation formulae makes a strong case for thoughtful interdisciplinary review of any formula.

Impact of socioeconomic factors on in-patient length of stay and their consequences in per case hospital payment systems

The number of countries adopting per case hospital payment systems has been continuously increasing in recent years. Nonetheless, debates persist regarding their consequences for equity of access to services. This concern relates to the failure of diagnostic classifications properly to take into account patients' care requirements, raising the threat of case selection ('cream skimming'). We examine the heterogeneity of costs within diagnostic categories related to socioeconomic (SE) factors using length of stay (LOS) as a proxy measure of care needs and costs. We evaluate its consequences in terms of fairness in resource allocation between hospitals. We employ data on all discharges in 2002-03 from a sample of 60 Belgian hospitals (617,275 observations), measuring the association between LOS and SE factors using generalized linear models. We design a resource allocation formula based on the Belgian financing scheme, where non-medical activity is paid based on a normative number of in-patient days, and measure financial penalties and rewards according to whether payment is adjusted for the SE characteristics of patients or not. Both patients' SE status and hospitals' area SE profile have a significant impact on LOS, which persists after controlling for detailed diagnostic and hospital characteristics. Hospitals treating low income patients are financially penalized as a result. SE factors are a predictor of in-patient LOS and should be taken into account in per case resource allocation among hospitals.

Quantifying Vulnerability to Climate Change: Implications for Adaptation Assistance

This paper attempts a comprehensive accounting of climate change vulnerability for 233 states, ranging in size from China to Tokelau. Using the most recent evidence, it develops risk indicators for three critical problems: increasing weather-related disasters, sea-level rise, and loss of agricultural productivity. The paper embeds these indicators in a methodology for cost-effective allocation of adaptation assistance. The methodology can be applied easily and consistently to all 233 states and all three problems, or to any subset that may be of interest to particular donors. Institutional perspectives and priorities differ; the paper develops resource allocation formulas for three cases: (1) potential climate impacts alone, as measured by the three indicators; (2) case 1 adjusted for differential country vulnerability, which is affected by economic development and governance; and (3) case 2 adjusted for donor concerns related to project economics: intercountry differences in project unit costs and probabilities of project success. The paper is accompanied by an Excel database with complete data for all 233 countries. It provides two illustrative applications of the database and methodology: assistance for adaptation to sea level rise by the 20 island states that are both small and poor and general assistance to all low-income countries for adaptation to extreme weather changes, sea-level rise, and agricultural productivity loss.

Australian governments' spending on preventing and responding to drug abuse should target the main sources of drug-related harm and the most cost-effective interventions

A notable feature of Australian drug policy is the limited public and professional attention given to the financial costs of drug abuse and to the levels and patterns of government expenditures incurred in preventing and responding to this. Since 1991, Collins and Lapsley have published scholarly reports documenting the social costs of drug abuse in Australia and their reports also contain estimates of governments' drug budgets: revenue and expenditures. They show that, in 2004-2005, Australian governments expended at least $5288 million on drug abuse, with 50% of the expenditure directed to preventing and dealing with alcohol-related problems, 45% to illicit drugs and just 5% to tobacco. Some 60% of the expenditure was directed at drug crime and 37% at health interventions. This pattern of resource allocation does not adequately reflect an evidence-informed policy orientation in that it largely fails to focus on the drug types that are the sources of the most harm (tobacco and alcohol rather than illicit drugs), and the sectors for which we have the strongest evidence of the cost-effectiveness of the available interventions (treatment and harm reduction rather than legislation and law enforcement). The 2010-2014 phase of Australia's National Drug Strategy should include incremental changes to the resource allocation mix, and not simply maintain the historical resource allocation formulae.

Simple versus composite indicators of socioeconomic status in resource allocation formulae: the case of the district resource allocation formula in Malawi

BackgroundThe district resource allocation formula in Malawi was recently reviewed to include stunting as a proxy measure of socioeconomic status. In many countries where the concept of need has been incorporated in resource allocation, composite indicators of socioeconomic status have been used. In the Malawi case, it is important to ascertain whether there are differences between using single variable or composite indicators of socioeconomic status in allocations made to districts, holding all other factors in the resource allocation formula constant.MethodsPrincipal components analysis was used to calculate asset indices for all districts from variables that capture living standards using data from the Malawi Multiple Indicator Cluster Survey 2006. These were normalized and used to weight district populations. District proportions of national population weighted by both the simple and composite indicators were then calculated for all districts and compared. District allocations were also calculated using the two approaches and compared.ResultsThe two types of indicators are highly correlated, with a spearman rank correlation coefficient of 0.97 at the 1% level of significance. For 21 out of the 26 districts included in the study, proportions of national population weighted by the simple indicator are higher by an average of 0.6 percentage points. For the remaining 5 districts, district proportions of national population weighted by the composite indicator are higher by an average of 2 percentage points. Though the average percentage point differences are low and the actual allocations using both approaches highly correlated (ρ of 0.96), differences in actual allocations exceed 10% for 8 districts and have an average of 4.2% for the remaining 17. For 21 districts allocations based on the single variable indicator are higher.ConclusionsVariations in district allocations made using either the simple or composite indicators of socioeconomic status are not statistically different to recommend one over the other. However, the single variable indicator is favourable for its ease of computation.