What we have done?
One of the key responsibilities of NHS England is the distribution, or allocation, of over £100 billion of resources annually across the commissioning system to provide funding for health services in England. The aim of the allocations process is to support equal opportunity of access to health services by those with equal needs, and to contribute to a reduction in avoidable health inequalities.
The Allocation Team, within NHS England Analysis & Insight for Finance team started the work for the refreshment in mid-2017 and was supported by CLAHRC through the secondment of a health economist for the development of the analytical model. The work was completed in time to inform the allocation to CCGs for 2019/20 to 2020/23, published on 10th of January 2019. This ensures that the overall formula continues to meet its underlying aim, of supporting equal opportunity of access for equal need.
Why was it important?
CCGs are responsible for commissioning care for common mental health problems, including psychological therapies, community, acute and crisis mental health care, currently provided by 63 Trusts. The CCG Mental Health budget accounts for around £7.5 billion of spending each year, 11% of core CCG allocations or 6.5% of overall NHS funds. There is a commitment to a growing share of the NHS budget, worth in real terms at least £2.3bn per year by 2023/24 (2019, Long Term Plan).
Weighted capitation formulae have been used in England since the 1970s to support NHS decisions on the distribution of resources across health care organisations. The objective is to direct more resources to areas with higher need for health care, for example to organisations that serve larger populations, older populations, and populations with worse health and more socioeconomic deprivation. NHS England currently uses a set of formulae for the core services (general and acute, maternity, mental health, prescribing and supply needs) and for primary care progressively developed and refreshed over time.
The last refresh of the mental health formula was carried out in 2012. The overall CCG formula, including the refresh of the mental health formula, are overseen by the independent Advisory Committee on Resource Allocation (ACRA), which recommends changes to the overall formula to the Chief Executive of NHS England. The mental health formula refresh was a priority on the 2017/18 ACRA work programme, agreed with the Chief Executive.
How did we do it?
The work involved the development of a unique person-level database including information collected and linked across multiple routine datasets on mental health care use and cost, as well as other characteristics, for every patient registered with a GP practice in England. GP practice and area level characteristics were merged in.
We developed a model to estimate individual mental health care costs as a function of need for care and availability or access to care (supply). We used the model to predict health care costs with the supply fixed at the population average to derive individual need weights. We aggregated individual weights to generate area-level weights that reflect differences in need, regardless of differences in access to care. The unique dataset allowed also a number of methodological innovations that contributed to the advancement of resource allocation methods.
Details on NHS England Allocations 2019/20 to 2023/24, on the relevant technical guidance and background documents are available at: https://www.england.nhs.uk/allocations/
Anselmi L, Everton A, Shaw R & Suzuki W, 2019, Estimating local need for mental healthcare to inform fair resource allocation in the NHS in England: cross-sectional analysis of national administrative data linked at person level, Cambridge Core, The British Journal of Psychiatry
For more information please contact Laura Anselmi.