Beyond resource allocation formulae: analysing the role of local health authorities and providers in achieving equity in service delivery

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The aim of the fellowship is to acquire the kills to develop and apply an extended framework for the analysis of resource allocation that accounts for how local organizations determine the equitable and efficient use of resources.The allocation of national health care budgets to local organisations is key to enabling the equitable provision of health care services. "Need weighted capitation formulae" are used in England and elsewhere to allocate resources to local organizations within the National Health Sector (NHS). In the English NHS a £100 billion budget is allocated to local organizations including Clinical Commissioning Groups (CCGs) and providers, based on a formula that reflects variations in need determined by age, morbidity, deprivation, and local input prices. Local organizations are responsible for spending their budgets. They are held accountable for performance and spending control, but not for how they distribute it. For example, an organisation serving a very deprived area may get more resources, but not spend them there, as there is no requirement to do so. Thus, the extent to which the aim set by policy makers through the formulae is met varies across local organizations.The research will study how in a NHS, local health organizations contribute to an equitable and efficient use of financial resources by delivering care to their populations according to need. In particular, I will analyse the effect of different local organizations' characteristics, including how providers are paid, regulated, owned and organised, on the extent to which the distribution of resources matches the need of populations within their catchment area. I will also simulate the distributional effect of alternative budget allocation along with changes in local organization characteristics. I will use a theoretical framework derived from political science and welfare economics, which I will apply using a range of quantitative methods drawn from econometrics, biostatistics, epidemiology and public health. I will use a unique dataset including linked patient records on the use and cost general, acute and mental health care over five years.The study will focus on England where local organizations are acquiring more autonomy and where linkable individual level administrative data are available. It will improve the understanding of how resources are distributed across patients within CCGs, as a result of the interacting behaviour of local managers, hospitals, GP practices and patients. Results will provide insights for increasing equity and efficiency of healthcare expenditure, in England and elsewhere, through resource allocation and other arrangements, such as incentive design, improving local organizations' performance. The framework developed and the methods learned and used can be adapted to other settings in future research, and will form the base for the development of a longer term research agenda focusing on additional health policies, in other care settings, including primary care in England, or health systems in low-income countries.