RHA Funding should be based on needs-adjusted capitation model


An official paper published by Health Minister, Stephen Donnelly recommends the use of a needs-adjusted capitation model to allocate funding to the RHAs. The model adjusts RHA population shares by an Age-Sex Index, a Deprivation Index, and a Rurality Index.

It states that only HSE Acutes and Community expenditure be subject to the PBRA over the short to medium term.

A new population-based resource allocation (PBRA) model is a core component of Regional Health Area (RHA) implementation and should be introduced next year.

PBRA is a funding model for health planning that seeks to distribute available healthcare resources according to population need in order to promote efficiency and equity in both health outcomes and distribution of resources..

The Department of Health said the paper,  *A Spending Review, Towards Population Based Funding for Health: Model Proposal’ contributed to the evidence required to support decision making on the most appropriate population-based funding model to implement.

It said the purpose of this Spending Review was to further contribute to the evidence building required for the consideration of the most appropriate PBRA model to be implemented in 2024. This Spending Review was one of a range of inputs which would inform the final PBRA model. Informed by the findings of an earlier Spending Review, this paper proposes a preliminary PBRA model for implementation and provides indicative results.  

This paper recommends the use of a needs-adjusted capitation model to allocate funding to the new RHAs to be established as part of the Sláintecare reform. The model proposed adjusts RHA populations by an Age-Sex Index, a Deprivation Index, and a Rurality Index. The results of the PBRA model applied in this paper point to indicative ‘guide’ PBRA expenditure shares being broadly similar to the current budget allocation by RHA.  This is particularly true with regard to the large expenditure programmes of Acutes, Older Persons, Mental Health, and Primary Care. 

In line with international best practice, it recommended that a permanent Advisory Group for the design and monitoring of the PBRA be established. It  recommended this group be chaired by the Department of Health and consist of members of the HSE, RHAs, DoH and Central Government, as well as academic experts in the area of health resource allocation models. This group should be supported by an appropriate secretariat. All the work of this advisory group should be made publicly available in the form of detailed reports on the formula/methodology and data used. The establishment of such groups would allow for refinement of the model as part of the ongoing Implementation Plan.

Minister for Health, Stephen Donnelly TD, welcomed the publication saying,  PBRA is the mechanism through which funding will be allocated to the new Regional Health Areas. Properly designed, it can support better corporate governance and clinical responsibility, while empowering local decision making and innovation. The paper is an important step in understanding how population-based funding can play a role in improving the equity and efficiency of healthcare. I welcome this IGEES paper as part of the expanding evidence base to support decision making in health.”

PBRA has been approved by Government in the Sláintecare Action Plan 2021 – 2023 and as part of the Business Case on Regional Health Areas. Its introduction is also a recommendation of the OECD’s Economic Survey of Ireland. A forthcoming Implementation Plan will be subject to approval by Government.