How are population-based funding formulae for healthcare composed? A comparative analysis of seven models

• Published in: BMC health services research Vol. 13; no. 1; p. 470
• Main Authors: Penno, Erin, Gauld, Robin, Audas, Rick
• Format: Journal Article
• Language: English
• Published: England BioMed Central Ltd 08.11.2013; BioMed Central
• Subjects: Adolescent; Adult; Age; Age Factors; Aged; Aged, 80 and over; Australia; Canada; Child; Child, Preschool; Comparative analysis; Delivery of Health Care - economics; Delivery of Health Care - organization & administration; England; Ethnicity; Europe; Expenditures; Female; Funding; Geography; Government finance; Health care; Health Care Costs - statistics & numerical data; Health Policy; Health Services Needs and Demand - economics; Health Services Needs and Demand - organization & administration; Health Services Needs and Demand - statistics & numerical data; Healthcare Financing; Humans; Income inequality; Infant; Infant, Newborn; Information management; Male; Medical care; Medical economics; Medical law; Medical policy; Middle Aged; Models, Economic; Native peoples; Netherlands; New South Wales; New Zealand; Ontario; Population; Resource Allocation - economics; Resource Allocation - organization & administration; Scotland; Sex Factors; Socioeconomic factors; Sweden; Taxation; Young Adult; New Zealand; Netherlands; New South Wales; Sweden; England; Scotland; Ontario; Canada; Australia; Europe; Australia, New South Wales
• ISSN: 1472-6963; 1472-6963
• DOI: 10.1186/1472-6963-13-470

Population-based funding formulae act as an important means of promoting equitable health funding structures. To evaluate how policy makers in different jurisdictions construct health funding formulae and build an understanding of contextual influences underpinning formula construction we carried out a comparative analysis of key components of funding formulae across seven high-income and predominantly publically financed health systems: New Zealand, England, Scotland, the Netherlands, the state of New South Wales in Australia, the Canadian province of Ontario, and the city of Stockholm, Sweden. Core components from each formula were summarised and key similarities and differences evaluated from a compositional perspective. We categorised approaches to constructing funding formulae under three main themes: identifying factors which predict differential need amongst populations; adjusting for cost factors outside of needs factors; and engaging in normative correction of allocations for 'unmet' need. We found significant congruence in the factors used to guide need and cost adjustments. However, there is considerable variation in interpretation and implementation of these factors. Despite broadly similar frameworks, there are distinct differences in the composition of the formulae across the seven health systems. Ultimately, the development of funding formulae is a dynamic process, subject to availability of data reflecting health needs, the influence of wider socio-political objectives and health system determinants.