Improved methodological approaches for need-based resource allocation

Growth in health expenditures and the desire to cover new services (e.g., drugs) continue to outpace our ability to fund health care. Thus, we cannot avoid the issue of how to allocate limited health care resources. It is generally accepted that equitable allocation of health resources and funding should be based on equal funding for equal need. Researchers and policy-makers have extensively worked towards this goal of equitable resource allocation in a number of areas. For example, most provinces in Canada and many industrialized countries, such as the United Kingdom and Australia, estimate expenditure need to allocate health funding between regions. In addition, similar methods and approaches are used to address other resource allocation problems in health planning and management. Despite extensive research on resource allocation methods, there remains a lack of consensus on appropriate indicators and methods. This proposed project aims to fill this gap by addressing fundamental methodological questions of resource allocation in estimating expenditure need for health care in Canadian provinces. This proposed project clearly addresses one of the most pressing health care issues in Canada, and it will have far-reaching impact in various resource allocation issues domestically and internationally. In particular, this project will contribute to resolving debates on equitable federal transfers through equalization and the Canada Health Transfer.