Measuring Need in the National Health Service Resource Allocation Formula: Standardized Mortality Ratios or Social Deprivation?

Abstract

All methods of dividing public expenditure between competing claims become contentious, particularly when they rely on social indicators of need. The Resource Allocation Working Party (RAW) formula devised in 1976 for distributing National Health Service financial resources fairly between different parts of England relies on the size, age/sex structure and mortality rates (in the form of standardized mortality ratios – SMRS) of populations as combined surrogates for their need for health care. This paper aims to demonstrate three things: first, that RAW'S approach in selecting SMRS was sure‐footed; second, that no better proxy of health care need which could be used in RAW has been produced since RAW; and third, that the continuing criticism of SMRS has been sustained by political pressures within the NHS. The result has been the application of ever more indirect and complex surrogates for‘need in the resource allocation process which are known to be contaminated by the prevailing unequal supply of health service facilities.

Resource Allocation for Equity in the British National Health Service, 1948–89: An Advocacy Coalition Analysis of the RAWP

“…Another key factor was the attention to consensus-building in the committee’s make-up and working. It combined representation of DHSS and NHS staff, including authorities in both the South and the more deprived regions (Mays and Bevan 1987). It also ensured a gradualist transition by issuing an interim report in August 1975, which set the next year’s formula pending final proposals.…”

“…Nicholas Mays and Gwyn Bevan, who worked on the RAWP as researchers in Holland’s department in the 1980s, take a similar approach. Their historical survey of earlier policy-makers’ attempts to address the issue highlights both the degree of continuity informing the initiative, and the flurry of literature in the early 1970s that triggered action (Mays and Bevan, 1987). Finally, John Welshman’s study of the RAWP from the perspective of the Sheffield region broadens the reading of the intellectual precursors.…”

“…One York health economist condemned the UPA measure as ‘methodologically confused … out-of-date … and uninterpretable’, suspecting the whole endeavor was designed to favor London at the expense of areas in the North and North-West, which by the SMR rankings alone were worst off (Carr-Hill 1988: 10-11). The St Thomas’s unit, where the SMR approach had originated, went further, identifying the UPA adjustment lobby as RAWP losers, purveying an ‘essentially political’ strategy driven by ‘powerful interest groups’ (Mays 1987: 46, 58). Despite these critiques, the Review endorsed the changes, believing that in practice the effects would be ‘relatively small’ (NHS Management Board 1988: Table 1.1).…”

Housing Policy, Deprivation and Space: the case of stress areas

“…This situation is not unique to the Housing Corporation. Mays (1987) produced, which for a given amount of finance is greater in the northern regions than in the south. The focus on 'helping those in greatest need' on an equitable basis, which was one of the grounds for using multiple deprivation indices, has been blurred.…”

“…Townsend, Phillimore and Beattie (1986, p. 97) noted a disparity between housing indicators and income-related indicators such as car ownership, which is not included in the index, with the former favouring London and the latter favouring the north of the country. Similarly, the noninclusion of mortality rates and population loss also favours the south, and the ethnic minorities indicator has been called a London-biased measure by Mays (1987).…”