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The needs based resource allocation formula entails central Government allocating resources based on a mathematical formula that integrates need for health care.
However, the decision to allocate a certain amount of resources to a particular health jurisdiction or facility may be based on a broader range of factors, sometimes not reflected in the existing resource allocation formula.
The district resource allocation formula applies only to the recurrent budget.
The district resource allocation formula in Malawi was recently reviewed to include stunting as a proxy measure of socioeconomic status.
In order to incorporate the asset index in a resource allocation formula, there is need to normalize the indices.
Although population changes are part of the resource allocation formula it is possible that it is not sensitive enough to take account of this growth.
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Some of the merits of needs-based resource allocation formulae include that resources are allocated to areas of high priority, where they can secure the highest marginal health benefit.
Explicit resource allocation formulae hence ensure that the share of total resources allocated to an area is based on indicators of relative need for health care [ 2].
For these reasons, these "prior use of NHS funded care" variables have been excluded from similar resource allocation formulas internationally.
The four commonly used methods are: i) political patronage ii) historical allocations iii) bids by local governments and iv) needs-based resource allocation formulae [ 1].
Evidence from other lower and middle-income countries such as Chile, Colombia, Zambia and Zimbabwe also support that more equitable distribution across provinces could be achieved if appropriate resource allocation formulae were used [ 13].
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