Chapter 7 Difficult Decisions in Times of Constraint: Criteria-Based Resource Allocation

Purpose The purpose of this chapter is to describe a method for priority setting that can be used to identify options for disinvestment, and is also meant to serve as a tool for re-allocation of resources to achieve better outcomes with a given pot of resources. Approach This chapter draws on findings from the application of a priority setting and resource allocation framework known as Program Budgeting and Marginal Analysis (PBMA). Case studies are used to illustrate key points around implementation including factors for success and guidelines for improving priority setting in practice. Findings PBMA has been applied in over 150 settings over the last 30 years. Purposes varied from focusing strictly on disinvestment to examining opportunities for re-allocation. Many organizations report continued use of the framework and decision makers typically express a desire to not revert to historical allocation or political negotiation in deciding on the funding for programs. Practical implications Practical implications of this body of work on priority setting abound in that there are significant opportunities to improve resource allocation practice including better engagement of staff, clinicians and public members, greater use of evidence in decision making and improving process transparency. Social implications As healthcare resources are limited, particularly in predominantly publicly funded health systems, prudent use of resources is critical. Actually applying the appropriate tools to ensure that funding aligns with organizational and system objectives is paramount. Originality/value Although there is a large body of literature on priority setting particularly in countries like the United Kingdom and Canada, this chapter serves to highlight key messages specifically in the context of fiscal constraint and in relation to the concept of disinvestment or service reduction.