An examination of relationships among indicators of socioeconomic status, health status, and selected health care utilization of fund allocation

by Boles, Brian Nelson

Given the current movement to regionalizationand population needs based funding in health services, it has become necessary to measure resource need to adjust health budgets beyond an age-sex per capita allocation. Most existing models for measuring health need have used per capita rates of mortality and morbidity as either dependent measures, or as independent measures for association with utilization. While this epidemiologically oriented approach is both logical and popular, such measures do not translate well into resourceneed measures. In modem industrial societies, utilization has shifted from cure aspects to care aspects of health; and sodoeconomic status (SES) has become recognized as an equally important indicator of health status, and determinant of utilization- An exploratory small area analysis was conducted to determine relationships among s~~08~0nomic status, standardized mortality ratio, and selected health care utilization rates in the Alberta population. Acute care hospital cases, purposely selected to reduce professional uncertainty in the data, were used to develop a proxy measure of health resource need. Areas, with a high percentage of poorly educated population, low income, and high aboriginal component, were found to both use and need a greater degree of health resources relative to other areas. Areas with high unemploymentwere found to use less resources but appeared to need more. Predictedvalues from small area regression analysis were converted into an SES Relative Value Scale to adjust budget allocations among regional health authorities inAlberta. The resultwould be a re-alldon of about 4.6 percent of the total regional health budget beyond an initial allocation by age-sex adjusted per capita. Some health regions, with high aboriginal and poorly educated populations, would gain substantially. On the other hand, these same regions tend to not benefit from age-sex adjustment due to the lower lifespan of their aboriginal populations. Some regions tend to receive less in relation to their historic utilization patterns. Thus a transitional mechanism, also provided in the study, may be required in moving to a needs based funding model. This study provides only the SES adjustment portion of a population needs based funding model. Age-sex adjusted populations, weighted by recent utilization rates at the provincial level, would need to be calculated each budget year. Additionally, policy would need to be in place for cross-region utilization, and for providing sewice in remote areas.