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Commissioning board looks for funding formula that will reduce health inequalities

BMJ 2012; 345 doi: http://dx.doi.org/10.1136/bmj.e8615 (Published 19 December 2012)
Cite this as: BMJ 2012;345:e8615

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Re: Commissioning board looks for funding formula that will reduce health inequalities

2 January 2013

Rapid response: original thinking from the NHS Commissioning Board?

The NHS Commissioning Board has rejected the use of a new funding formula for England for 2013-14, apparently owing to concerns that it may be inconsistent with its aim of reducing health inequalities. The new formula was based on a thorough analysis of a vast volume of data,1 but it was not charged with considering key policy priorities, such as the need to reduce health inequalities. This illustrates the importance of integrating policy priorities into the resource allocation process - without them, the process can simply perpetuate the status quo. A good formula as currently utilised is necessary but not sufficient for the desired policy outcomes - this needs policy, incentives and performance back-up.

The analysis found that individual level diagnosis variables - disease prevalence - add considerably (about 26%) to the resource use predictions at general practice level. Our research has shown that the prevalence of disease registered by general practices is often much lower than the expected prevalence, especially in deprived urban areas.2 Effective primary healthcare is not reaching these patients. So why not fund commissioners for the expected level of disease, and support evidence-based case-finding?

Although the proposed funding formula included weightings for higher utilisation of unscheduled care by deprived populations, it failed to allow for the under-utilisation of elective and preventive care by the same populations.3-5 Reducing known inequalities in utilisation of elective care would either require more resources, or reductions in use in less deprived populations. It also failed to consider the future prevalence of chronic diseases - in terms of disease prevention, we know that there are deprivation gradients in most risk factors for common chronic diseases.

The current NHS funding formula, despite its weighting for higher use of unscheduled care by deprived populations, has done little to reduce health inequalities preventable by healthcare.6 Yet current best-practice interventions to reduce classic coronary risk factors, if successfully implemented in both high and low socioeconomic groups, could eliminate much of the socioeconomic differences in coronary heart disease mortality.7

Fresh thinking is required to turn around this historic resource misallocation. The NHS Commissioning Board should estimate the costs of NHS service gaps which allow healthcare-related inequalities to persist, and consider funding and requiring commissioners to close inequalities in use of both unscheduled, and elective and preventive care. We think this will entail linking resource requirements to the prevalence of specific diseases and how funding should be allocated across scheduled and unscheduled care. In this age of austerity,8 a debate will also be needed to identify the possible sources of such funding.

References
1. Dixon J, Smith P, Gravelle H, Martin S, Bardsley M, Rice N, et al. A person based formula for allocating commissioning funds to general practices in England: development of a statistical model. BMJ 2011;343.
2. Nacul L, Soljak M, Samarasundera E, Hopkinson NS, Lacerda E, Indulkar T, et al. COPD in England: a comparison of expected, model-based prevalence and observed prevalence from general practice data. Journal of Public Health 2011;33(1):108-16.
3. Soljak M, Browne J, Lewsey J, Black N. Is there an association between deprivation and pre-operative disease severity? A cross-sectional study of patient-reported health status. International Journal for Quality in Health Care 2009;21(5):311-15.
4. Neuburger J, Hutchings A, Black N, van der Meulen JH. Socioeconomic differences in patient-reported outcomes after a hip or knee replacement in the English National Health Service. Journal of Public Health 2012.
5. Bang JY, Yadegarfar G, Soljak M, Majeed A. Primary care factors associated with cervical screening coverage in England. Journal of Public Health 2012.
6. House of Commons Health Committee. Third Report: Health Inequalities In: Commons Ho, editor. London, 2009.
7. Kivimmaki M, Shipley MJ, Ferrie JE, Singh-Manoux A, Batty GD, Chandola T, et al. Best-practice interventions to reduce socioeconomic inequalities of coronary heart disease mortality in UK: a prospective occupational cohort study. The Lancet 2008;372(9650):1648-54.
8. Majeed A, Rawaf S, De Maeseneer J. Primary care in England: coping with financial austerity. British Journal of General Practice 2012;62(605):625-26.

Competing interests: None declared

Michael A Soljak, Clinical Research Fellow

Azeem Majeed, Professor of Primary Care

Imperial College London, Department of Primary care & Public Health, Reynolds Building, Charing Cross Campus, St Dunstans Road, London W68RP

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Commissioning board should spend money where it works best

20 December 2012

The trouble with the debate about how to allocate NHS funding to CCGs is that most of the debate is comically naive. The issue that people don't seem able to grasp clearly is that money should be allocated to those areas where the money should have the greatest effect not those with the biggest problems.

The naive assumption is that areas with the worst health need the most spend. But this won't work if the extra spend doesn't address the problem, which it hasn't historically (which is why the new funding proposal is radically different). A patient level analogy might help. If we choose to devote medical effort to just the sickest people, we would end up wasting much health activity on terminally ill patients whose deaths would not be delayed by our efforts. But we would better devote attention to those with, for example, major trauma injuries as they can be saved by intervention.

The same distinction applies, though more subtly, to population health. Many problems driving health inequality are not caused by low NHS spending and are not solved by high NHS spending, for example, problems caused by the poor quality of social housing. Government could make a bigger contribution to the goal of reducing health inequality by spending more on social housing than by spending more on the NHS. And the NHS might well do a better job of improving the health of the overall population by not allocating more money to deprived areas where the extra money doesn't actually result in improved public health.

It isn't how much you spend that determines whether the NHS meets its goals: it is how much it gets for that spend. And continuing to spend on things that don't work might make politicians feel better, but makes the NHS worse.

Competing interests: I have worked for PA Consulting for more than a decade. Clients of this global management consulting firm, headquartered in the UK, have included the Department of Health, NHS providers and NHS commissioners. The opinions expressed here are entirely personal and not those of PA Consulting

stephen black, management consultant

pa consulting, 123 buckingham palace road

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