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Correspondence to: Mr Smith
Every year about 22 billion pounds is allocated to health authorities for
hospital and community services in England. The distribution of most of these
funds is based on a formula developed to reflect the population's needs, but the
existing formula has been criticised on several grounds. This paper describes
the development of a method to determine the health needs for small geographical
areas. Data from the hospital episodes statistics and 1991 census together with
information on vital statistics and supply of health care facilities were used
in the model. Two stage least squares regression was used to identify true
indicators of need, and these were entered into a multilevel model to take
account of variations in practice in different health authorities. The resulting
formula should be more statistically robust and more sensitive to needs than
previous approaches.
(Accepted 22 March 1994)