The function of the resource allocation sub-model within the IIASA Health Care System model is to simulate how the HCS allocates limited supplies of resources between competing demands. The principal outputs of the sub-model are the numbers of patients treated, in different categories, and the modes and quotas of treatment they receive. The Mark 2 version of the sub-model described in this paper simulates the allocation of many resources within one mode of treatment. It uses the same main assumption as used in the Mark 1 version previously reported; namely that in allocating its resources the HCS attempts to optimise a utility function whose parameters can be inferred from data on past allocations. Depending upon the type of data that is availabledifferent procedures for parameter estimation are required. This paper analyses estimation procedures which use historical allocation data directly. Both these procedures and the solution algorithm have been realized in a small computer program which can be readily installed on most scientific computer installations. The use of the sub-model is illustrated by three hypothetical applications using hospital data
