In 1998, the National Health Insurance program of Taiwan implemented a global budget payment system for dental outpatient services, followed by traditional Chinese medicine, primary care, and hospitals. Under this scheme, the annual healthcare budget is distributed among six regional service areas for enhancing self-management within each area. However, the formulas used in the allocation of the annual budgets differ across sectors. This situation has drawn criticism from healthcare providers, and stakeholders have yet to reach a consensus regarding the types of revisions that should be implemented. For the formulation of healthcare budgets, many medical professionals and researchers are demanding the inclusion of factors such as the variations in healthcare needs, personal risk factors, costs involved in the healthcare service provision, and distribution of healthcare providers in the region. In this study, we review the methods employed in other countries for the distribution of budgets as well as the factors included in their formulas, trends in the development of the budget allocation systems, and their experiences following implementation. Our literature review revealed that the United Kingdom, Australia, and New Zealand allocate healthcare funds according to population-based (also referred to as “needs-based”) distribution formulas. These formulas include factors pertaining to age and gender, morbidity, and socioeconomic status. Some of these formulas also account for differences in the supply-side costs and “unmet needs” in the healthcare provision. The methods in question are ostensibly highly effective in accounting for regional healthcare variations and also aim to reduce inequity in healthcare resource distribution. We suggest that morbidity and socioeconomic status should be included in the resource allocation formula in the future. According to the literature review findings, the government should develop localized measures of socioeconomic status that can be applied across Taiwan. The government should also investigate the status quo in relation to “unmet needs” in Taiwan.