OBJECTIVE: To develop a method of allocating publicly funded health care resources among communities according to their relative levels of need for health care independent of their current patterns of use. DESIGN: For each health care program population mean levels of resource allocation were calculated and were adjusted for age and sex to produce a national age- and sex-adjusted share of program resources. Indices of relative need for health care (for most programs the standardized mortality ratio) were derived from existing data on aspects of illness and death and were then used to weight the age- and sex-adjusted shares for between-community differences in health risks and health care needs. SETTING: The populations of the 49 counties in Ontario were used as the communities among which resources were allocated. Health care expenditures in 1988-89 by the Ontario Ministry of Health were used as the "budget." MAIN RESULTS: Age- and sex-adjusted resource allocations weighted for between-community differences in health care needs differed from allocations based on population size, in certain cases by up to 100%. CONCLUSION: Existing data can be used to propose allocations of health care resources that relate to relative levels of need for care across communities.
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