Developing an approach to accounting for need in resource allocation between urban and rural district hospitals in South Africa

The South African public health system has struggled to deal with persistent structural inequities in the resourcing and provision of care in the post-apartheid era. A significant challenge in this regard is that the allocation of resources from the provincial level to districts and facilities does not adequately account for need.This chapter explores an approach to accounting for need in the assessment of equity in resourcing the country\u0027s public health system. Using Principal Components Analysis, we develop and test an approach to the creation of a rural index that explicitly accounts for differences in rural and urban contexts with regard to healthcare need, and the demographic, geographic and socio-economic factors that play a role in determining relative resource needs.Having tested this approach on an assessment of the allocation of resources to district hospitals in KwaZulu-Natal Province, we found that while there is merit in developing a rural index for assessment purposes, in practice it should be used in conjunction with a broader analytical framework that allows for assessment of a facility\u0027s performance against key input, utilisation and resourcing outcome indicators.In this way, the index should become a component of a performance management framework that seeks to not only address issues of equity (between rural and urban settings), but also efficiency and effectiveness as an outcome of resource allocation processes.Accepting inevitable \u0027inefficiencies\u0027 due to diseconomies of scale and inherently lower levels of utilisation at rural facilities, trends in the analysis were generally advancing towards equity between urban and rural facilities as a social good.