Many countries use geographical funding formulae to distribute public funds for health care to local planning areas in proportion to need. In England, these aim to distribute resources in proportion to all healthcare needs regardless as to whether these are currently met or unmet. The National Health Service also has an additional objective to allocate resources to reduce health inequalities (i.e. differences in health between socioeconomic groups). Adjusting for unmet needs could help achieve this second objective, if a greater proportion of needs are unmet in disadvantaged socioeconomic groups with poorer health compared to more advantaged socioeconomic groups. Alternatively, if there are greater unmet needs for relatively expensive conditions that tend to affect older age groups (e.g. cancer), this could lead to a greater proportion of needs being unmet in more advantaged socioeconomic groups, who will tend to be older due to greater life expectancy. Adjusting for unmet needs would then lead to allocation of a greater share of resources to these more affluent populations with better health, potentially increasing health inequalities. It is, however, unclear how met and unmet healthcare needs should be measured in these formulae and how better accounting for unmet needs influences health inequalities.
