Abstract

In an attempt to limit their health care expenditures Canadian provinces have strengthened the necessity to allocate health care resources according to their population needs. The difficulties and limitations of the needs-based approach are explored. First, indicators of population needs for health care were introduced into a formula of resource allocation for hospital-based services in England in the late 1970. Secondly, there are broad similarities between both the philosophy and resource allocation strategies of Canada and Britain. Thirdly, the main definition of a needs indicator is to measure the level of equity- or inequity-in the distribution of health care resources between regions. Fourthly, a needs indicator, as least as developed by the Canadian provinces, concerns general and specialized services that should be found in each of their regions. Fifthly, a needs indicator constitutes a tool for the calculation of a capitation rate. Finally, future research should focus on parameters which are not an integral part of the allocation method, but which have a strong impact, in the attainment of regional equity such as administrative decisions that are taken when budgets are to be allocated or reduced between regions.