A New Formula for Distributing Hospital Funds in England

The British National Health Service delivers the great majority of the country's health care. One of the key policy problems confronting the organization is how its funds should be allocated to different parts of the country. We developed indices of health care needs based on empirical hospital utilization data. The national government now uses the indices as the basis for allocating a large part of NHS funds to health authorities. Moreover, the success of the project has encouraged the government to seek to introduce needs indices for the entire NHS budget, and the study team is now extending the area of application to the broader public sector. The study has therefore demonstrated that scientific management methods can have a profound impact at a high level of national policy.