Establishment of priorities in resource allocation

Sec. tii. & Med.. Vol. IX. pp. 191 to 193 Pcrganon Press Ltd 1979. Rinted in Chat

Britain

ESTABLISHMENT

OF PRIORITIES ALLOCATION HARDLD

IN RESOURCE

COPEMAN

School of Industrial and Business Studies University of Warwick, England

Akstrae-The

United Kingdom spends 5% of its income on a national health servlcz The 2% growth

in this expenditure allows some expansion and improvement, but means that some services need to be limited. The paper explains how geographical all~tions ate ma&, and how the baknce of care in health and personal social services is decided by central and local government and by Health Authorities, and the etratcgic and operational planning of the health service. ft raises questiost~ for diission. about ex~diture on “antres of excelkna” and on socially deprived areas; about the practical di%iculticsof getting national priorities in the balance of care applied within semi-autonomous Heaith Authorities, about the need to involve busy clinicians in planning; about the implicit rationing of individual services that is incvitabk if resources are not unlimited It asks wbetba the right information is colkcted for the real needs of running the service; examines how the patknt can affect the results of the bureaucratic health machine; asks whether an eSkknt service can bs run with this degree of consultation, and whether a drastic reduction in central control would help. lt concludes with questions about the possibk efkcts of an expansion of private medicine in a country where the major flow of health resources is planned in accordance with social and medical poliies.

This paper suggests problems in resource allocation for health, using the UK expe&mce as an example, which require more general discussion. It is primarily concerned with the allocation and use of public money to run a national health service. THE UK SYfrlXM

1. Orgunisation and Scale. In the United Kingdom there is a programme of public expenditure for “Health and Personal Social Services” (HP!?&). Its marmitude is __~_~~~~~~~~ __ of the fallowinn _-__- .._- m order ----- rll. S.--lE millions

Family Practitioner Service Other health services {mainly hospitals)

7ooO

To*11 Nationaf Health Service (NHS} Personal Social Services

1500

Total Health & Personal

Sociil Services 10,500

2. The BOOOM of NHS expenditure represents about 5% of Gross Domestic Product at market prices. Expenditure is planned to increase (in real terms) at 2% per annum, which is near the probable growth of GDP. 3. The f 10.500 M of HPSS expenditure forms one eighth of total public expenditure (which includes social security benefits, not discussed in this paper) E21. 4. Of the HPSS expenditure, 81% relates to England. 5% to Wales 11% to Scotiand and some 3% to Northern Ireland [33. 5. The HPSS programme is administered as foilows: (a) For hwfth, the He&r Authorities (with members appointed by Ministers and by local authorities) act under the authority and responsibility of the Health Ministers (one for each country of the UK under the leadership of the Secretary of State S.S.H. 13 3c- D

for Social Serviecs, but all responsible to the Cabinet and to Pa&met@. There are variations in method between the four countries, but they can be ignored for our purposes; allocations are not proportionate to population but are influenced by hiitory and politics. In England alone there are 15 health Regions and 90 Areas each with its own authority; the Area may be subdivided into Districts without their own Authority. Each Authority is responsible. under general guidance or direction from Ministers and their Departmcn~. for the development and operation of all health servioes in its area. (b) For perso& social services, the local authorities, whose boundaries are mostly co-terminous with health Areas Theii policies are under the general influence of Health Departments and Ministers, but they are responsible to their own electorate; and in practice there may be considerable variations in standards, for political as well as social reasons. /; AlnrLJr v, 8.8U,un(l“U?, “IL.,“.;,” v. 1.‘S‘,,“W3 (a) As part of national financial economic and social planning, the Cabinet makes allocations (at constant prices) for the following four years between the HPSS and other programmes, and (for a large part of these programmes) sets cash limits for the coming year, which means that allocations are not further increased with changes in infiation. Alioeations of expenditure by loeat authorities arc indicative not compulsory; the block grants to individual local authorities are computed on a forma&~ and are cash-limited. (b) Health Depmments albcatc funds for the eoming year to Regional Health Authoritie-s (RHAs), using long-term targets [4] to achieve a more equitable geographical distribution of health resources. (c) RHAs allocate to Arca Health Authorities (AHAs), using similar principles modified by their own knowledge of the needs of their own areas.

192

HAROLDCOPEMAN

(d) Similarly. AHAs allocate to Districts--the unit which (ideally) centres on one general hospital, but also runs other hospitals and services. (e) Districts allocate money to functional budgetholders (who may be concerned with nursing, radiography. pathology, estate maintenance etc, but will not be clinicians. although they abet the Ievei of expenditure by others). 7. Establishing priorities. Health Departments, containing medical and social specialists as well as administrato~ work out policies which they conskkr will be of most benefit to people throughout the country, and which will full% the aims of the Govemment in this field They axtsult widely with pro&sional bodies and with the ~mi~ut~o~us Health Service itself. The cost Ot these policies is embodied in a Prep Budget, and priorities are cstabtished so that the total cost is in line with the possible allocation of public funds to the HPSS programme. 8. Eacfi year the Treasury assembles proposed programmes along agreed guidelines, together with statements of the .poliiies the expenditure is intended to make possible. The Cahinet takes decisions about total expenditure and then about the division between programmes; Health Departments and others then have to arrange their policies and priorities within these sums. 9. In England the Health Authorities have to work out a strategic l&year plan every few years, and an operational. 3-year plan every year. These pians, are formulated within total costs which are consistent

as the great Teaching Hospitals grow up in capital cities, requiring a high level of finance. should they remain in a privileged position. giving a very high standard of service to relatively few patients. when areas of mad&al and social deprivation remain? And is this a local or a national matter? 14. Linked with this question. how does one decide how much money can go into glamorous but expensive resutrdr and development of advanced medical technolog$ Can oite know whether the new methods will be dearer, or cheaper, than at present? IS. Balunccl of care. At ihe other end of the medical spectrum, there is a sharp growth in the number of elderly people, and indeed of others whose lives have been prolonged by medical science. The relatively simple care they require is costly in total. because of their numbers. and a switch within total health resources is needed How does one convince clinicians (and the public)! who are largely concerned with acute care rather than with long-stay care, that this switch should be made within the total Health programme? How can the Health Departments. under pressure for more resources for urgent or exciting developments, get the Health Authorities to switch resources within their agreed allocations, without ex&sive central intetirence? 16. Clinicians and Planning. How does one make a bridge between the administrative/political authorities (who have to aim at social equity and at economy) and clinicians (who have the duty and the wish to rJive each individual patient the best care that is technically possible)? How can one get these matters rationally discussed in an organisation where clinicians are extremely busy and prefer practical work to paper-work? 17. If public resources are not unlimited. some form of rationiny is inevitable. How is this achieved at the level dealing with individual cases? Must the clinician modify his traditional attitude: and can he do this without indefensible and unethical discrimination? If however the decisions are social and political. how does the administrator avoid interfering with clinical responsibility? And is he ready to answer in public (in the U.K.. through a Minister) for the decisions he is taking? Do we have the right sort of medical administrators to handle these problems. and do they have the respect of their clinical colleagues? 18. Is the right social and medical irtformurion collected in order to plan a strategy; to estimate costs in sufficient detail to work out the best options for achieving the strategy; to monitor achievement; and to control costs? Is the information regarded as useful by those who provide it, and is sufficient care taken with its accuracy? 19. The patienr. So far we have been considering whether various parts of an administrative and professional machine are working properly. But this is not the final test: at some point there must be a check back to the public-and especially to the patient dnd his family, and to those who have not yet been able to g@t treatment. to see how far the bureaucratic machine is giving tolerable results. In the U.K. this

with the long-term RAWP targets [43 for redistribution of health resources, They take account of national guidance and priorities. but apply local knowledge and pref&nces. Regional plans are dis cussed with the Health Department (DHS). In principle at least. subordinate budgets should derive from the operational plan, and qualitativb planning should thus be linked with financial control. This link is so far rather weak. 10. Lo& Authoritrs (who are responsible to their own electorates for a wide range of services, including housing and education) develop their own policies on Personal Social Services (except in Northern Ireland). They receive a block grant to cover most of their services and also raise local property taxes (*rates”). Health Departments give guidance on national policies. and there is liaison with Health Authorities and some joint financing of community projects. I 1. Currtwt issues wd prohlems The National Health Service is the largest industry in Britain. Its management is a constant series of national and local problems. made more acute by the limited finance available. by the after-effects of a major reorganisation in 1974. and by industrial disputes at various leveis. 1 have chosen a few points which may be of interest and concern to other countries also. 12. The ~~~ru~icaf distributimr of health care within a country partly reflects historical accident. local wishes and habits in earlier days and charitable intentions of in~~duals. Major movements of population have take& place since many of the hospitals mav take nt varrous !evg!s: were *md mmiiml nmetia nnA &al saccmrm. ___-, --___ nlaco r_-__ -_ .._._ httil? -- ___.Le..__-_.__. &.-*--.*-_.a.. -W.-e -....*p, tions have changed. How can one best move towards (a) Through the Community HeaIth Council of an efficient and equitable distribution‘? each Health District. consisting of people with a wide 13. In particular. when “centres of exceitence” such variety of interests.

193

Establishment of priorities in resource allocation

(b) Through members of a Health Authority, parnamina&d bv Local Author&v. -, a- -------------,(c) By pressure on Health Departments and Ministers, directly and through Parliament. (d) In a few cases of abuse, through the Health Service Commissioner (Ombudsman). (In addition there may be recourse to professional bodies or to the Courts of Law.) 20. The U.K. has gone a long way down the roadthough with incomplete success-in developing a more flexible and sensitive service. It has also deveioped extmsive srufl comufration. All this raises the general issue of whether a service can be eficiently planned and administered at the same time as being responsive to local needs to the feelings and wishes of patients. and to the views and interests of the staff. 21. It is sometimes suggested that the NHS should be further removed from central control. How. in any country, can this be done while retaining some monitoring and sanction to ensure that the public’s general purposes are carried out. and that individual grievances are met? Perhaps some countries could run as independent public health corporation which was subject to detailed oversight by the Courts of Law, in accordance with some detailed Code. This, in effect. transfers discretion from doctors. administrators and politicians to lawyers. Would this be an improvement? Another method is to allow greater local variations, under elected local authorities. Would the downward variations in the poorer areas be acceptable? This is contrary to the emphasis of U.K. policy. 22. If priwte medicine takes a bigger role. ticularlv ------- -, &as

(a) is priority given in practice to the development of services for which public authorities see most need?

(b) Is there a tendency for private treatment to be ud_ fr routine me&&e and --- suraerv. --- --- , . and far the public service to have to deal with expensive major incidents affecting private patients7 (c) Is medical and nursing staIT drawn away from the public service, and are pay rates affected? (d) Is there a feeling of social divisiveness, and does the public accept this? 23. I have suggested points for discussion where, on the whok, the U.K. has not found a completely satisfactory solution. There will be many more points worth discussion, from cxpcrkna in all countries.

REFERENCES 1. The Public Expenditure White Paper of January 1979 to (7-he Gotxmawn t’s Expenditure Plans, 1979-80 Cmod 7439) gives a fairly detailed breakdown for Great Britain (Table 2.1I) and a singk figure for HISS for Northern Ireland CTabk 2.15).Together. the total for the UK comes lo about f87OOM at prices ruling in November 1977. I have added a rough 20% to cover inflation up to the financial year from April 1979 to tiarch 1980. 2. Cmnd. 7439. Table 12. 3. Ihid.. Tabks 2.I I. 4.3. 4. I and 2.15: figures for England by subtraction. 4. These we suggested in the “RAWP Report” to the f982-83

Department of Health and Social !kcurity (OHS1 Sharing Rcsuwces for Hualth in England: Report of the Resource Allocarion Working Party. HMSO. London.

1976.