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Do personal health budgets offer value for money?

The Department of Health is set to take a hammer to the way NHS care is funded in less than a year. From next April, the DH plans to offer a ‘personal health budget’ to all patients with a long-term health condition to spend on their care. GPs look set to oversee the scheme, but a recent analysis has cast doubt on whether it is fit for purpose.

The recent independent report looked at Government pilots of personal health budgets and found they spent on average £4,000 more per patient than usual care and, in some cases, had a ‘negative impact’ on patient outcomes.

The pilots attracted criticism after patients were allowed to purchase theatre tickets, frozen meals and complementary therapies using NHS cash. But this is the first evidence linking them with worse outcomes, compared with those receiving usual NHS care.

GP role

The national roll-out of personal health budgets began in earnest in April. The budgets, which are individual allocations of NHS funding that patients can use to buy services (see box below), are available to patients in England receiving NHS Continuing Healthcare. 

From April next year, millions of patients with long-term conditions are expected to be invited to join the scheme.

NHS England insists the level of GP involvement in the scheme depends on CCGs’ local policies and processes.

However, experience from pilots shows GPs may be the first port of call for patients wanting to sign up. GPs may also be asked to act as the ‘lead clinician’ to oversee the budget agreed by the patient and commissioner, in particular arbitrating over any safety issues with a requested treatment or activity.

Dr Brian Fisher, a retired GP from south-east London and patient and public involvement lead at the NHS Alliance, says although GPs shouldn’t get ‘sucked into the detail’, they will inevitably need to have a ‘grasp’ of how personal health budgets work and help patients to use them wisely.

‘Personal health budgets in their current form should not be pursued’

Dr Brian Fisher

Dr Brian Fisher

He says: ‘We need to be able to signpost people to the right place, get them to think about the positives and negatives; I think we do need an overall grasp of how this is going to affect people.  And I’m sure in the next year or two, every GP will come across somebody for whom this is a relevant intervention.’

Fresh criticism

But a recent paper in the Journal of Health Service Policy and Research has thrown the scheme’s benefits into doubt. The paper argues that patients who received the budgets had more money spent on them than others receiving usual care, irrespective of the complexity of their needs.

The authors, led by Professor Nick Watson, professor of health and wellbeing at the University of Glasgow, also found that when patients were offered an upfront lump sum, it had a ‘negative impact’ on outcomes. Co-author Colin Slasberg, an independent consultant in social care, says their study chimes with the experience of widespread use of personal budgets in social care – where only a small number of better educated, motivated patients benefit.

Mr Slasberg says: ‘A small number of people with the confidence and skills to manage this will garner what cash is around. They will create good success stories that ministers will say shows how good they are, and GPs will be blamed for the fact they are not taking off for everybody.’


Another concern is that GPs could be put in compromising situations, particularly if they are required to be involved in decisions over purchasing non-evidence-based treatments or leisure items.

The RCGP has previously warned that GPs could find themselves facing potential conflicts of interest, for example where the budget ‘broker’ and the patient agree on activities or a health plan that the GP does not support.

Dr Michael Dixon, interim president of NHS Clinical Commissioners and a GP in Cullompton, Devon, agrees personal health budgets could create dilemmas for GPs. He says: ‘It gets interesting when the patient wants something for which there is no evidence at all.

‘There will need to be rules that stop GPs being put in a compromised position. Otherwise, there is a danger the health service will be paying for things that perhaps aren’t responding to need, but are “nice to have”.’

But he adds: ‘I have to say my preference is to side with the patient and allow them to use their money and, within reason, to decide on the evidence that they want.’

Privatisation dangers

Critics also argue that such care ‘packages’ are the perfect opportunity for insurance companies to start offering ‘top-up’ payments to patients who can afford them.

Dr Fisher claims the whole scheme is ‘a very dangerous step’ and insists that personal health budgets in their current form ‘should not be pursued’. He says: ‘I think the evidence shows that for some people, they can be life-changing – with some very positive experiences.

‘But there are many downsides – it is very complicated, so very few people are likely to be able to use them productively and you need a whole infrastructure to help individuals make choices. So it’s likely to stay a minority sport.

‘And there are some big political implications of personal health budgets in the sense that this is a way of packaging care and those of us who worry about privatisation of the NHS see these budgets as a very significant step towards an insurance-based system.’

Forging ahead

Despite the criticisms, the Government is determined to push ahead. NHS England says 80% of CCGs are ready to offer personal health budgets and it plans to run more training sessions with NHS staff over the summer.  

Care minister Norman Lamb insists the budgets will ‘encourage a shift in the way money is spent – from simply allowing someone to subsist to enabling them in living the life they want to lead’, while at the same time saving the NHS money and driving up standards of care.

But whether the reality on the ground will match this rhetoric is unclear, with some commissioners unconvinced this is the best approach to delivering more personalised healthcare.

Dr Sam Everington, chair of NHS Tower Hamlets CCG, in east London, and a GP in the borough, says the Government’s desire to expand personal health budgets to people with long-term conditions may be over-ambitious – and points out CCGs are in any case too strapped for cash these days to push the agenda.

He says: ‘The feedback I’ve been getting is there has not been a lot of uptake.

‘I think the Government needs to look carefully at the take-up and the impact it is having. If you go back to basic principles and ask why we are doing this, a lot of it is about engaging patients in the process so I think they need to reflect on where it has worked and what the other opportunities are – recognising that we are all massively stretched financially.’

Funding is a major concern, amid claims the DH has underplayed the extra cash ploughed in to support the scheme.

Each of the 20 pilot sites originally received an extra £100,000 each year to support the implementation, and invested extra money of their own on top of this, with an average of £146,000 spent over two years on setting up the infrastructure needed to run the budgets.

But Pulse has learned that CCGs have been offered a cash injection of just £20,000 each to help get personal health budgets up and running, which NHS England says has been taken up by 191 CCGs. Dr Dixon says this is a ‘tiny amount’ that will not give CCGs much scope to promote them.

He says: ‘It’s not beginning to pay the management costs for an average CCG. I think it’s on the back burner for some CCGs, because it’s gone incredibly quiet.’

Q&A: Personal health budgets

What are they?

They are an allocation of money to support a person’s health and wellbeing needs, planned and agreed between the patient and a ‘broker’ working on behalf of the CCG.

Who can have one?

Currently, 56,000 patients receiving NHS Continuing Healthcare are entitled to ask their CCG for a personal health budget and from October, these patients will have the right to have one if they want it. CCGs can also offer personal health budgets to other patients whom they feel may benefit. NHS England has promised to allow everyone with a long-term condition who could benefit the option of a personal health budget from next April.

How do they work?

A ‘broker’ draws up a care plan with the patient, which is approved and costed by the CCG. GPs may be asked to act as a ‘lead clinician’ on the care plan, which could involve making the final decision where a particular aspect of the care is potentially unsuitable or risky.

How do patients get the money?

The money can be managed in one of three ways:

• Notional budget – no money changes hands. Patients find out how much money is available and discuss with the CCG how they want to spend it to meet their needs.

• Real budget held by a third party – a different organisation or trust holds the money for the patient and buys the care and support they choose on their behalf.

• Direct payment – patients receive the cash to buy the care and support they and the CCG have agreed on. Patients have to show what they have spent the money on but they, or a representative, can manage the budget.