Feature Briefing

Personal health budgets: surplus of cash or deficit of ideas?

BMJ 2012; 345 doi: http://dx.doi.org/10.1136/bmj.e8329 (Published 10 December 2012) Cite this as: BMJ 2012;345:e8329
  1. Krishna Chinthapalli, clinical fellow
  1. 1BMJ, London WC1H 9JR, UK
  1. kchinthapalli{at}bmj.com

Krishna Chinthapalli answers the key questions about personal health budgets

What are they?

Personal budgets were first introduced for social care in 1997 and are used by over 125 000 people in England.1 Local councils give users a means tested sum of money to spend on care of their choice, as an alternative to existing social care packages. The Department of Health now wants to use personal budgets in healthcare, initially for people who need long term NHS community care.

In social care, the sum of money is given directly to users and can be used as they wish. Although direct payment may be offered to some users of NHS personal budgets, for others the primary care trusts or clinical commissioning groups will hold the budget and approve or reject users’ plans for the money.

Why is this in the news?

Lord Darzi’s 2008 review, High Quality Care For All, first mentioned personal health budgets “to give individual patients greater control over the services they receive.”2 Since 2009, they have been piloted in 64 primary care trusts for people with long term conditions and for preventive measures, maternity care, and end of life care.

A three year study of the pilot schemes was published on 30 November, and on the same day Norman Lamb, the care minister, announced that the Department of Health would spend £1.5m (€1.8m; $2.4m) on rolling out the scheme to another 56 000 people.3

What “services” can be received?

The bad news is that the budget cannot be used instead of general practice or emergency services, or to fund part of a treatment that a patient is paying for privately. Also, it cannot be used for alcohol, tobacco, gambling, debt repayment, or any illegal activities. Otherwise, the definition of service depends on the primary care trust panel and could include4:

  • Neurolinguistic sessions

  • Laptop computer

  • Acupuncture

  • Gym membership

  • Personal trainer

  • A cat

  • Reiki

  • Manicure

  • Theatre trip for two

  • Mobile phone

  • Football season ticket

  • Driving lessons

Have you confused the question with your Christmas wish list?

No, really, they were all approved by panels during the pilot studies. Actually, driving lessons were probably approved by a steering group. Flippancy aside, the three most common uses for the budget were for paid carers, physical exercise, and alternative therapists.

Who else has tried them?

When thinking of experimenting with something new, it is often useful to go to the Netherlands. The Dutch have had personal budgets since 1997 for long term care but they exclude medical and alternative therapies. Most budget holders there are satisfied with the scheme, and there is a waiting list of people wanting to use it. However, costs in people with personal budgets seemed to rise much faster than in people with conventional care.5

A literature review of studies in the United States, Canada, the Netherlands, Germany, and England by the Health Foundation found no evidence that personal budgets increased value for money or led to better health outcomes.6 Budget holders did seem to feel more empowered and confident though.

Do they help people get better?

Independent researchers carried out an evaluation after one year in 2235 recruits in 20 primary care trusts.3 They compared people holding personal health budgets with people getting conventional care. Mortality seemed to be a third higher in the budget holders. Reassuringly this was not because personal health budgets are lethal but because budget holders tended to be in poorer health at baseline. The budgets did not make any difference to proxies for clinical outcomes, such as glycated haemoglobin concentration in people with diabetes.

So do they help with anything?

Budget holders had a “significant improvement” in subjective wellbeing and happiness compared with those getting conventional care.3 Oddly enough, those whose budget was over £1000 a year were even more satisfied, but the results were significant only at the lesser used 90% confidence interval.

Won’t this cost more money?

With even less than 90% confidence, the Department of Health thinks that “if half of the people eligible for NHS Continuing Healthcare chose to take the offer of a budget, this could imply a potential saving of around £90 million.” 7

The evaluation report suggests this could be true only if the correct half of people take up the budget, if they do not use any existing services, if there are no set-up costs, and if we accept that 90% confidence interval.

An interim evaluation found that setting up personal health budgets cost each primary care trust an average of £93 280 in the first year.8 Nationally, set-up costs would total £14m—or 300 000 acupuncture sessions. Ongoing costs are predicted to be substantially less though.

What did the users think?

Interviews showed that users who had had budgets for nine months still did not understand some minor details4:

“I didn’t actually see anybody that worked for the, whoever gives the personal health budget out. I never saw anybody from any department anywhere. I don’t even know whether it’s a government fund or what. No idea,” said one user.

Another person didn’t realise the budget was personal: “I’m a bit scared really, ’cos somebody else who could be in a position where they need summat and I’m taking money away from it and it could put them at a loss.”

Others who had been using the budget “felt that they had run out of ideas and struggled to think of alternatives that they really wanted to spend the budget on (at the extreme, one woman had had 11 requests refused).”

Allocating a budget could even deplete bank accounts: “The budget was paying for driving lessons but the participant did not have a provisional licence and ended up paying for this themselves. In doing so, however, they had become overdrawn at the bank.”

Surely there were some positive comments?

The majority of users preferred personal health budgets, and the unconventional purchases had been beneficial. One wheelchair user had bought a laptop to “improve speech and language” and also found “unforeseen social interaction benefits” because he could now see friends and family using Skype. Another, with a football season ticket, found it did him “a world of good” compared with “taking pills prescribed by the GP.”

Some users even thought they were using NHS services less often, such as one man who used his budget to access a gym. He said as a result there were “Reductions in attending doctors . . . hospital visits and medication. All have gone down . . . The way I’ve looked at it . . . I’ve cut my . . . doctors’ attendances by something like 80%.”

So an Apple (Macbook) a day keeps the doctor away?



Cite this as: BMJ 2012;345:e8329


  • Competing interests: The author has completed the ICMJE unified disclosure form at www.icmje.org/coi_disclosure.pdf (available on request from the corresponding author) and declares no support from any organisation for the submitted work; no financial relationships with any organisation that might have an interest in the submitted work in the previous three years; and no other relationships or activities that could appear to have influenced the submitted work.

  • Provenance and peer review: Commissioned; not externally peer reviewed.