What is it about?
In the UK each location receives funding based on a resource distribution formula. However, the key flaw seems to be that the assumptions in the formula are contradicted by real world trends.
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Why is it important?
As always, you must understand the fundamental mechanisms behind costs. While the current formula is good it still misses a key variable relating to unexplained variation. More recent research suggests that this is related to the absolute number of deaths (as a proxy for end-of-life costs).
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This page is a summary of: A flaw in person-based funding?, British Journal of Healthcare Management, January 2013, Mark Allen Group,
DOI: 10.12968/bjhc.2013.19.1.32.
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