ALLOCATING RESOURCES TO HEALTH AUTHORITIES - DEVELOPMENT OF METHOD FOR SMALL-AREA ANALYSIS OF USE OF INPATIENT SERVICES

Every year about pound 22 billion is allocated to health authorities f or hospital and community services in England. The distribution of mos t of these funds is based on a formula developed to reflect the popula tion's needs, but the existing formula has been criticised on several grounds. This paper describes the development of a method to determine the health needs for small geographical areas. Data from the hospital episodes statistics and 1991 census together with information on vita l statistics and supply of health care facilities were used in the mod el. Two stage least squares regression was used to identify true indic ators of need, and these were entered into a multilevel model to take account of variations in practice in different health authorities. The resulting formula should be more statistically robust and more sensit ive to needs than previous approaches.