The Resource Allocation Working Party in its report Sharing Resources for Health in England proposes a formula for the identification of both regional and district financial targets (Department of Health and Social Security, 1976). In this paper it is argued that the national formula is not a valid instrument for the latter purpose. Furthermore, research into medical needs and outcomes will not be adequate to bring about real changes in resource distribution at local levels unless it is recognised that the health authorities can meet needs in different ways and that a change in resource management from institutional to service budgeting is required.
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