Can regional resource shares be based only on prevalence data? An empirical investigation of the proportionality assumption

Abstract

The needs component of the current formulae for allocating resources for hospital services and prescribing in England is based on a utilisation approach. This assumes that expenditure on NHS activity in different geographical areas reflects relative needs and supply conditions, and that these can be disentangled by regression models to yield an estimate of relative need. These assumptions have been challenged on the grounds that the needs of some groups may be systematically 'unmet'. Critics have suggested an alternative based on variations in the prevalence of health conditions, called the 'epidemiological approach'. The epidemiological approach uses direct measures of morbidity to allocate..