The pursuit of equity in NHS resource allocation: should morbidity replace utilisation as the basis for setting health care capitations?

Although the English NHS has been described as a world leader in pioneering methods of distributing expenditure in relation to population needs, concerns about the legitimacy of using the current utilisation-based model to allocate health service resources are mounting. In this paper, we present a critical review of NHS resource allocation in England and demonstrate the feasibility and impact of using direct health estimates as a basis for setting health care capitations. Comparing target allocations for the inpatient treatment of coronary heart disease in a sample of 34 primary care trusts in contrasting locations in England, we find that a morbidity-based model would result in a significant shift in hospital resources away from deprived areas, towards areas with older demographic profiles and towards rural areas. Discussing the findings in relation to a wider policy context that is generally concerned to direct more health care resources towards the poor, the paper concludes by calling for greater clarity between the goals of health care equity and health equity. Whilst the former demands that the legitimate needs of demographically older populations for more health care resources are acknowledged, the goal of health equity requires real political commitment to resource broader social policy initiatives.