'Alarming uncertainty' over costs in personal budget pilots

By Lilian Anekwe

NHS managers running the personal health budgets pilots are struggling to engage GPs and estimate suitable budgets for the flagship scheme, according to a Department of Health evaluation.

In December 2009, the Department of Health invited PCTs and local partners to take part in the pilots of personal health budgets. Overall 70 sites were chosen around the country, including 20 in-depth sites where the evaluation team conducted interviews with project leads between April and June this year.

The preliminary findings of the 20 in-depth pilot sites, led by researchers at the University of Kent and commissioned by the Department of Health, found engaging GPs was a 'huge hurdle' and that the accurate estimation of costs 'was a source of uncertainty'.

Project leads said: 'The degree of uncertainty of the costs for a particular disease pathway was alarming in a number of sites, and project leads questioned how scientific their process was in practice.'

In some areas the funding for each personal health budgets was found by top-slicing existing budgets for health conditions, ‘even though it was thought that funds could easily be found by moves around the system'.

Managers also found that, because personal health budgets cannot be used to purchase primary care services, there was a potential risk of ‘double running costs' as funding for personal health budgets could not be separated from existing expenditure.

It also found ‘there were a number of challenges in implementing personal health budgets', including:

• managing direct payments in terms of limiting risk to the budget holder
• knowing where the boundaries were, in terms of what could be included in the budget
• promoting choice and control in the absence of a clear and developed market

Engaging GPs was identified as a ‘huge hurdle that some sites had yet to overcome' in managing the cultural shift and convincing some still sceptical project leads of the benefits of holding a personal health budget.

The evaluation comes as the same week as the coalition Government pledged its support for direct payments – one of three kinds of personal health budgets, with care minister Paul Burstow announcing a further £4m investment to support the pilot sites.

But a how-to guide published by the Department of Health this week to help inform pilot sites on how to run direct payments ducked the issue of budget setting.

‘During the pilot phase the Government does not intend to issue guidance to PCTs around different methods of budget setting. This is an area of emerging practice, and it is too early to set out a comprehensive or national approach in guidance.'

Types of personal health budgets

There are three broad approaches to delivering personal health budgets:
1. A notional budget, held by the commissioner where individuals are aware of the treatment options with a budget constraint and the financial implications of their choices;
2. A managed budget on behalf of the patients by a third party (e.g. organisation or Trusts); and
3. Direct payments, where the patients receives a cash payment to buy services.
Source: Department of Health, 2009

'Alarming uncertainty' over costs for personal budget pilots, DH evaluation finds