A grant rationing model for a health care system

Most public health programs are created through a political process and the health administrator's resource allocation decision is influenced not only by the relative performance of the subunits but also by political considerations. This paper presents a goal programming model for rationing available grants to competing health care subunits on the basis of performance subject to resource and political constraints. Performance is defined in terms of output adjusted for non-compliance on the identified quality of care and administrative efficiency criteria. The quality and efficiency criteria are those specified by the Federal agency as amended by local funding authorities and subunit administrators through a Delphi process. The model has the advantage of flexibility and can be easily adapted to suit prevailing financial and political conditions. In particular, it can be used as a viable analytical tool in health care and other public service agencies where political considerations are important in resource allocation decisions.