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How not to fund hospital and community health services in England

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  • Mervyn Stone
  • Jane Galbraith

Abstract

Summary. The paper focuses on the hospital and community health service component of the current formula for the target allocation of annual ‘weighted capitation’ funding of England's 304 primary care trusts—a formula that responds to political pressure to tackle continuing health inequalities. The history of allocation formulae for the National Health Service is briefly reviewed, before exposing the composition and provenance of the hospital and community health service component. Under the heading ‘Logical and statistical deficiencies’ we consider various frameworks, model misspecification, allowance for age, ins and outs of supply, unmet need and wrong signs, and replicability and robustness—questions that are relevant to trust in the current formula based on the regression of age‐standardized current utilization on a multiplicity of socioeconomic variables. We conclude that it might be better to put future resources into developing direct, rather than proxy, measurement of health needs.

Suggested Citation

  • Mervyn Stone & Jane Galbraith, 2006. "How not to fund hospital and community health services in England," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(1), pages 143-164, January.
    • Handle: RePEc:bla:jorssa:v:169:y:2006:i:1:p:143-164
    DOI: 10.1111/j.1467-985X.2005.00392.x
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    References listed on IDEAS

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    1. 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.
    2. Mervyn Stone, 2005. "Accumulating Evidence of Malfunctioning Contractual Government Machinery," Public Money & Management, Taylor & Francis Journals, vol. 25(2), pages 82-86, April.
    3. Carr-Hill, Roy A., 1989. "Allocating resources to health care: rawp is dead - long live RAWP," Health Policy, Elsevier, vol. 13(2), pages 135-144, November.
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    Cited by:

    1. Asthana, Sheena & Gibson, Alex, 2011. "Setting health care capitations through diagnosis-based risk adjustment: A suitable model for the English NHS?," Health Policy, Elsevier, vol. 101(2), pages 133-139, July.
    2. Asada, Yukiko & Kephart, George & Hurley, Jeremiah & Yoshida, Yoko & Smith, Andrea & Bornstein, Stephen, 2012. "The role of proximity to death in need-based approaches to health care," Health Policy, Elsevier, vol. 106(3), pages 291-302.
    3. Mervyn Stone, 2012. "Getting to grips with England's formula for local authority support," Public Money & Management, Taylor & Francis Journals, vol. 32(2), pages 145-152, March.
    4. Vallejo-Torres, Laura & Morris, Stephen & Carr-Hill, Roy & Dixon, Paul & Law, Malcom & Rice, Nigel & Sutton, Matthew, 2009. "Can regional resource shares be based only on prevalence data? An empirical investigation of the proportionality assumption," Social Science & Medicine, Elsevier, vol. 69(11), pages 1634-1642, December.
    5. Mervyn Stone, 2015. "New development: The remarkable insignificance of NHS England's CCG funding formula," Public Money & Management, Taylor & Francis Journals, vol. 35(4), pages 311-314, July.

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