Measuring geographic inequities in the Portuguese health care system: an estimation of hospital care needs Monica Duarte Oliveira a,b,+ , Gwyn Bevan b,c,1 a LSE Health and Social Care, London School of Economics and Political Science, UK b Operational Research Department, London School of Economics and Political Science, UK c Commission for Health Improvement, Finsbury Tower, 103 /105 Bunhill Row, London EC1Y 8TG, UK Received 15 June 2002; accepted 10 March 2003 Abstract Portugal created a NHS to achieve greater equity of access to health care. Successive governments continued to assert the importance of equity in the face of evidence of inequities in supply of hospital resources, but lacked methods to provide sound information on the degree of inequities in Portugal and hence how to achieve greater equity. Capitation formulae have been increasingly used in other countries with a NHS to measure geographical inequities and allocate resources to reduce them. The main objective of this paper was to develop a capitation formula to measure need for hospital care for the Portuguese system by transferring this technology from methods used in other countries, and, in particular, in England. We find, however, problems with the common use of standardised mortality ratios (SMRs) as a measure of need and found age-specific mortality ratios to offer more soundly-based estimates. We also raise questions on the use of empirical estimates of utilisation of health care by age and sex as they appear to reflect inadequacies of health care in Portugal. We also believe it is important to improve knowledge of health insurance and care outside the NHS. Our results show that there are considerable inequities on the distribution of hospital resources in Portugal. # 2003 Elsevier Ireland Ltd. All rights reserved. Keywords: Capitation formulae; Geographical equity; Resource allocation; Hospital care; Portugal 1. Introduction As in other countries, the creation of the NHS in Portugal in 1979 constituted a crucial step towards the pursuit of equity by the introduction of universal coverage for health care, ‘nearly free’ at the point of delivery, financed by general taxation [1]. Although pronouncements by successive Ministers of Health have continued to assert the importance of some concept of equity [2,3], they lack clarity 2 . Further- * Corresponding author. Tel.:  /44-207-955-6286; fax:  /44- 207-955-6803. E-mail address: m.d.oliveira@lse.ac.uk (M.D. Oliveira). 1 Currently on secondment to the Commission for Health Improvement, UK. The views of this paper are those of the authors and do not reflect policies of the Commission for Health Improvement. 2 The focus on equity of health, on health care access or to an equal access to private and public health care have often been referred in Portuguese political statements, and imply different concepts of equity which might be incompatible (see [6,62]). Health Policy 66 (2003) 277  /293 www.elsevier.com/locate/healthpol 0168-8510/03/$ - see front matter # 2003 Elsevier Ireland Ltd. All rights reserved. doi:10.1016/S0168-8510(03)00118-0