This site is intended for health professionals only

Personal budgets could be ‘unsustainable’ due to fraud and spiralling costs, study warns

Personal health budgets risk becoming ‘unsustainable' if England fails to heed the lessons from other countries which have adopted the policy, new research published in the BMJ has shown.

The Department of Health is currently piloting personal budgets in 64 PCTs, as part of its drive to give patients more say over the services they access, and recently pledged to roll out the scheme to 50,000 people by 2014.

But new research warns that managers in the Netherlands have been forced to restrict a similar scheme due to rising costs and susceptibility to fraud.

Patients in the Netherlands have been able to hold a personal budget to purchase care since 1997. But between 2002 and 2010 the number of personal budget holders increased tenfold, while spending increased on average by 23% a year.

Researchers also said there had been ‘credible reports of fraud' and expressed concerns about ‘the growth of private agencies that broker arrangements between clients and providers'.

Professor Martin McKee, professor of European public health at the London School of Hygiene and Tropical Medicine, who led the research with colleagues from the Netherlands, warned: ‘Unless the lessons of the Dutch experience are learnt, the unintended and negative consequences will outnumber the positive, empowering role of personal budgets.'

The authors warned that while the policy in the UK has gained some support among patients, many unanswered questions remain over how budgets will be set, what will happen when the budgets have been spent, and whether there are risks posed to vulnerable individuals who might be ‘exploited by unscrupulous providers or brokering agencies'.

The study also cited a preliminary report from the Netherlands showing that patients may choose to spend their budget on treatments not supported by scientific evidence, such as Reiki, reflexology, and aromatherapy, and questioned the justification for this in times of austerity. 

The eligibility criteria for personal budgets in the Netherlands is set to change substantially in 2014 in response to the concerns, with only people who would otherwise have to move to a nursing or residential home able to keep their budget or apply for one to enable them to continue living at home.

Measures to combat fraud and restrict the use of brokers will also be introduced.

The authors said: ‘If the English proposals are to succeed they will have to establish clear rules and regulations, along with adequate support to enable people to administer their budgets independently, without specialised private agencies.'

‘The UK Government must also recognise that personal budgets can create new demand. Consequently, eligibility rules and entitlements should be evaluated carefully to avoid creating false expectations and potentially disappointing many people.'