Equity in health care in Namibia: developing a needs-based resource allocation formula using principal components analysis

BACKGROUND The pace of redressing inequities in the distribution of scarce health care resources in Namibia has been slow. This is due primarily to adherence to the historical incrementalist type of budgeting that has been used to allocate resources. Those regions with high levels of deprivation and relatively greater need for health care resources have been getting less than their fair share. To rectify this situation, which was inherited from the apartheid system, there is a need to develop a needs-based resource allocation mechanism. METHODS Principal components analysis was employed to compute asset indices from asset based and health-related variables, using data from the Namibia demographic and health survey of 2000. The asset indices then formed the basis of proposals for regional weights for establishing a needs-based resource allocation formula. RESULTS Comparing the current allocations of public sector health car resources with estimates using a needs based formula showed that regions with higher levels of need currently receive fewer resources than do regions with lower need. CONCLUSION To address the prevailing inequities in resource allocation, the Ministry of Health and Social Services should abandon the historical incrementalist method of budgeting/resource allocation and adopt a more appropriate allocation mechanism that incorporates measures of need for health care.