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The impact of NHS resource allocation policy on health inequalities in England 2001-11: longitudinal ecological study

BMJ 2014; 348 (Published 27 May 2014) Cite this as: BMJ 2014;348:g3231
1. Ben Barr, senior clinical lecturer in applied public health1,
2. Clare Bambra, professor of public health policy2,
3. Margaret Whitehead, professor, and W H Duncan professor of public health1
1. 1Department of Public Health and Policy, Institute of Psychology, Health and Society, University of Liverpool, Liverpool L69 3GB, UK
2. 2Department of Geography, Wolfson Research Institute for Health and Wellbeing, Durham University, Stockton on Tees, UK
1. Correspondence to: B Barr benbarr{at}liverpool.ac.uk
• Accepted 2 May 2014

Abstract

Objective To investigate whether the policy of increasing National Health Service funding to a greater extent in deprived areas in England compared with more affluent areas led to a reduction in geographical inequalities in mortality amenable to healthcare.

Design Longitudinal ecological study.

Setting 324 lower tier local authorities in England, classified by their baseline level of deprivation.

Intervention Differential trends in NHS funds allocated to local areas resulting from the NHS resource allocation policy in England between 2001 and 2011.

Main outcome measure Trends in mortality from causes considered amenable to healthcare in local authority areas in England. Using multivariate regression, we estimated the reduction in mortality that was associated with the allocation of additional NHS resources in these areas.

Results Between 2001 and 2011 the increase in NHS resources to deprived areas accounted for a reduction in the gap between deprived and affluent areas in male mortality amenable to healthcare of 35 deaths per 100 000 population (95% confidence interval 27 to 42) and female mortality of 16 deaths per 100 000 (10 to 21). This explained 85% of the total reduction of absolute inequality in mortality amenable to healthcare during this time. Each additional £10m of resources allocated to deprived areas was associated with a reduction in 4 deaths in males per 100 000 (3.1 to 4.9) and 1.8 deaths in females per 100 000 (1.1 to 2.4). The association between absolute increases in NHS resources and improvements in mortality amenable to healthcare in more affluent areas was not significant.

Conclusion Between 2001 and 2011, the NHS health inequalities policy of increasing the proportion of resources allocated to deprived areas compared with more affluent areas was associated with a reduction in absolute health inequalities from causes amenable to healthcare. Dropping this policy may widen inequalities.

Introduction

Expenditure on the National Health Service in England as a whole has increased each year since its establishment, although this trend accelerated between 1999 and 2011.1 These additional resources led to increased activity in hospitals and primary care, decreased waiting times, improved survival, and improvements in the control of chronic conditions.2 The extent of the increase in expenditure differed across the country, with some areas experiencing greater increases than others.

Many countries experience noticeable inequalities in health between regions, often as a result of differing levels of socioeconomic deprivation.3 One policy approach to deal with these spatial inequalities is to allocate health service resources in ways that take into account these differences in health need.4 In England, central funding for the NHS raised through taxation is allocated to local commissioning organisations that provide or purchase primary, community, and secondary health services on behalf of their resident populations. The level of resources each commissioning organisation receives is determined by a national formula. Since the 1970s several different formulas have been used in an attempt to allocate resources more equitably to the commissioning organisations, based on the level of need in their populations.5 These local commissioning organisations then decide on how these resources are used based on their assessment of the needs of their populations.

In 1999 the UK government introduced a new objective for the allocation of resources in the NHS in England: “to contribute to the reduction in avoidable health inequalities.”6 To better achieve this objective a health inequalities component was introduced into the allocation formula in 2002, which targeted more resources at deprived areas.7 As a consequence, increases in allocations since that time have tended to favour more deprived areas. The local NHS commissioning organisations in these areas were free to use these additional resources to purchase primary or secondary healthcare or public health services, to better meet the needs of their populations and improve the quality of care they received.

This health inequalities approach to resource allocation was part of a wider strategy to reduce inequalities in health in England. In particular this strategy targeted the fifth of local authorities with the worst health and deprivation indicators (the spearhead group). Although the resource allocation policy was not specific to these areas, the spearhead areas did receive a greater increase in NHS resources than non-spearhead areas, because of their level of deprivation. These spearhead areas also received other additional support, including interventions to reduce social exclusion and intensive assistance through the national health inequalities support team.8

The policy of using the resource allocation mechanism to reduce health inequalities is based on the assumption that additional healthcare expenditure translates into improved population health outcomes. This clearly depends on the quality and effectiveness of care delivered and whether it tackles health needs. Although several reviews found little evidence of an association between healthcare expenditure and variations in mortality between countries,9 10 11 some studies that have investigated changes over time within countries where health service access is primarily based on need (rather than ability to pay), have found that increased investment of healthcare resources is associated with improved outcomes.12 13 14 However these studies have largely investigated the average effects of healthcare expenditure at the country or provincial level and have not assessed impacts on health inequalities. A recent study analysing differences in the trend in healthcare expenditure in each of the countries of the United Kingdom (England, Wales, Northern Ireland, and Scotland), found that since 1999 increased expenditure in England compared with the rest of the country was associated with an increase in the rate of decline of mortality amenable to healthcare.15 Our study extends this analysis by analysing the health inequalities impact of a specific policy to allocate additional resources to more deprived areas within England.

Recently, a great deal of debate has been about whether allocation of NHS resources in England should give greater weight to age compared with deprivation as an indicator of health need.16 17 18 19 Age has always been a major component of the resource allocation formula; however, concerns have been raised that the trend in resource allocation, since the introduction of the 1999 health inequalities policy, has not sufficiently taken into account increased demand for healthcare in wealthier areas, which, although they tend to have healthier populations, also tend to have older populations because residents live longer.

In 2012, the Advisory Committee on Resource Allocation proposed a new person based formula that removed the health inequalities component. In December 2012, NHS England decided against the implementation of this formula because of concern that, as it would increase the proportion of resources allocated to areas with better health outcomes, it was inconsistent with the organisation’s responsibilities to reduce inequalities in outcomes from NHS care.20 After a fundamental review of allocations policy in 2013, NHS England implemented a new formula, which combines the 2012 person based formula with a measure of “unmet need.” Even with this adjustment, however, the new formula gives less weight to deprived areas than does the current pattern of funding. As a result, planned NHS funding for local areas is set to decrease to a greater extent in more deprived areas compared with more affluent areas.21

Although one commentator has asserted that this health inequalities objective for the allocation of NHS resources, introduced in England in 1999, has had no effect,22 to our knowledge, no empirical investigation supports that assertion. A fundamentally important question to inform this debate is whether this 1999 policy did successfully reduce inequalities in health outcomes. We investigated whether this policy of increasing NHS funding to a greater extent in more deprived areas with the worst health outcomes, led to a reduction in geographical health inequalities in England.

Methods

Setting

We used aggregated data between 2001 and 2011 on 324 lower tier local authorities in England based on 2009 boundaries. We excluded the City of London and the Isles of Scilly because of their small populations.

Data sources

The main outcome variable in our analysis was male and female mortality from causes amenable to healthcare in people aged less than 75 years in each local authority, for 2001 to 2011, which we obtained from the NHS Information Centre indicator portal.23 Amenable mortality is defined as mortality from causes for which there is evidence of preventability given timely, appropriate access to high quality care.9 It includes deaths classified by a set of underlying causes within specific age groups (see supplementary appendix 1 on bmj.com). The concept has been widely used as a tool to track the quality and performance of health systems over time.9 For additional analysis we also obtained data on years of life lost from causes amenable to healthcare, which was only available from 2003; mortality from causes amenable to healthcare excluding ischaemic heart disease; and mortality from causes other than those considered amenable to healthcare (that is, not amenable).

Our main exposure variable was the allocation of NHS funds to the local commissioning organisations (health authorities or primary care trusts) responsible for each local authority population for 2001 to 2011, obtained from the Department of Health.24 25 To provide a consistent time series of allocations and outcomes, we mapped allocations for local commissioning organisations to local authority populations. Where these organisations spanned more than one local authority, we apportioned the total allocation to each local authority based on their population size, using look-up tables provided by the UK Data Archive.26 We adjusted the allocation for each local authority in each year to 2012 prices using the gross domestic product deflator.27 We used these data along with Office for National Statistics (ONS) population estimates to calculate the NHS allocation per head of population for each local authority.

We have previously shown that local authority mortality trends are associated with trends in unemployment and household income.28 To control for these trends in our analysis we obtained data on the unemployment benefit claimant rate and average gross disposable household income for each year in each local authority, from the ONS.29 30

Analysis

We initially investigated the trends in NHS allocation per head of population as well as trends in mortality from causes amenable to healthcare and mortality not amenable to healthcare, within the 20% most deprived and 20% most affluent local authorities We defined these two groups based on the income deprivation component of the indices of multiple deprivation in 2000.31

There has been some debate about whether relative or absolute measures should be used to measure progress in dealing with inequalities, with leading experts arguing that absolute measures are more relevant to inform policy making.32 Others, however, have argued that relative measures should also be used,33 and the Global Commission on the Social Determinants of Health and other guidance recommends that both measures are assessed.34 35 36 37 We therefore calculated the change in resource allocation, change in mortality, and trends in inequalities in both absolute and relative terms. We assessed the change in inequalities due to mortality amenable to healthcare by comparing the absolute and relative differences in mortality between deprived and affluent areas between 2001 and 2011. We further explored the unadjusted association between the average annual change in NHS allocation and mortality amenable to healthcare in each local authority.

Finally, we used linear regression models to estimate the association between change in NHS allocation and changes in mortality after adjusting for confounding factors. As there are potentially unobserved confounders that vary between local authorities, we used a fixed effects approach to remove these differences between local authorities.38 This conservative approach involves including dummy variables for each local authority to assess the association between change in NHS allocations and change in mortality within each local authority. We included an annual trend term to adjust for the national long term trend in mortality. Based on our previous research28 we hypothesised that the effect of additional investment in healthcare may differ depending on the social circumstances of the population. We therefore included an interaction term between deprivation level (fifths of indices of multiple deprivation) and the allocation per head of population, allowing the association between change in NHS allocation and change in mortality to vary by level of deprivation. We used robust clustered standard errors to reflect the fact that populations were not sampled independently and to ensure that standard errors were robust to serial correlation in the data. To control for differences in economic trends between areas we included the annual gross disposable household income and unemployment claimant rate for each local authority in the model. We estimated the models separately using male and female mortality as the outcome (see supplementary appendix 2 for model formulas).

Robustness tests

We subjected our analysis to several tests to assess the robustness of our findings. Using standard regression diagnostics we assessed whether the association between absolute change in NHS funds and absolute change in mortality amenable to healthcare was linear (see supplementary appendix 3). To assess whether our models were sensitive to this assumption of linearity we also estimated models with our variables measured on a log scale, to investigate the association between relative (%) change in NHS resources and the relative (%) change in amenable mortality. We further adjusted this model for separate time trends in each local authority to test whether relative deviations from the linear trend in allocation in each local authority were associated with fluctuations in mortality (see supplementary appendix 4.)

To test the specificity and consistency of our analysis we also estimated models separately using years of life lost from causes amenable to healthcare, mortality from causes amenable to healthcare excluding ischaemic heart disease, and mortality from causes other than those considered amenable to healthcare as our outcomes. We hypothesised that we would find similar sized effects for different measures of mortality amenable to healthcare and no association between NHS resource allocation and mortality from causes not amenable to healthcare. To compare effect sizes across different outcomes we used standardised coefficients. (see supplementary appendix 4). As there were other, non-NHS interventions in spearhead areas during this period that may have influenced mortality, we estimated additional models, controlling for separate trends in mortality amenable to healthcare in spearhead and non-spearhead areas (see supplementary appendix 4).

Notes

Cite this as: BMJ 2014;348:g3231

Footnotes

• Contributors: BB is the lead author and guarantor. He planned the study, conducted the analysis, and led the drafting and revising of the manuscript. MMW and CB contributed to data interpretation, drafting of the manuscript, and revisions. All authors agreed the submitted version of the manuscript.

• Funding: BB is supported by a National Institute for Health Research doctoral research fellowship (DRF-2009-02-12). The National Institute for Health Research had no role in the study design, data collection and analysis, decision to publish, or preparation of the manuscript. MMW is supported by the DEMETRIQ project, which is funded from the Commission of the European Communities seventh framework programme under grant agreement No 278511. The study does not necessarily reflect the commission’s views and in no way anticipates the commission’s future policy in this area.

• Competing interests: All authors have completed the ICMJE uniform disclosure form at www.icmje.org/coi_disclosure.pdf and declare: no support from any organisation for the submitted work; no financial relationships with any organisations that might have an interest in the submitted work in the previous three years; CB is a member of the Labour party, however, the authors have no other relationships or activities that could appear to have influenced the submitted work.

• Ethical approval: Not required.

• Data sharing: The statistical code and dataset available from the corresponding author (benbarr@liverpool.ac.uk).

• Transparency: The lead author affirms that the manuscript is an honest, accurate, and transparent account of the study being reported; that no important aspects of the study have been omitted; and that any discrepancies from the study as planned have been explained.

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