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Five Minute Digest: Personal health budgets

Personal health budgets are set to become a permanent fixture in the health service from next April. Enshrined in the Mandate to NHS England – the DH´s equivalent of Biblical tablets of stone – the Government’s eventual aim is to create a right to ask for a personal health budget for everyone who would benefit from one.

Care minister Norman Lamb announced the national rollout of personal health budgets on 30 November last year. The announcement followed a three-year pilot programme which ended in October 2012.

What are they?

A personal health budget is an amount of money to support a person’s identified health and wellbeing needs, planned and agreed between the person and their local NHS team. The Government’s vision for personal health budgets is to enable people with long-term conditions and disabilities to have greater choice, flexibility and control over the healthcare and support they receive.

People who are already receiving NHS Continuing Care will have a right to ask for a personal health budget from April next year. CCGs will also be able to offer personal health budgets to others that they feel may benefit from the additional flexibility and control, with the aim of making them available to anyone with a long-term condition who could benefit by 2015.

According to the DH, the care plan is at the heart of a personal health budget. It sets out the individual’s health and social care needs and includes the desired outcomes, the amount of money in the budget and how this will be spent. The care plan is developed in discussion with the patient and the professional or the individual taking the lead, before being checked and signed off by the CCG.

How do the budgets work?

Once a care plan has been agreed, the money can be managed in a number of different ways:

Notional budget – no money changes hands. Patients find out how much money is available and talk to their local NHS team about the different ways to spend that money on meeting their needs. They will then arrange the agreed care and support.

Real budget held by a third party – a different organisation or trust holds the money for the patient and helps them decide what they need. After the patient has agreed this with their local NHS team, the organisation then buys the care and support they have chosen.

Direct payment for healthcare – patients get the cash to buy the care and support they and their local NHS team decide they need. Patients have to show what they have spent it on but they, or their representative, buy and manage services themselves. Direct payments for healthcare are not yet available in all parts of England. The plan is for this option to be made available this autumn.

If a patient is receiving a personal health budget and a personal budget for social care, then it may be possible to join the two budgets together. In some areas, the assessment, planning and monitoring processes may also be joined up.

Pilot schemes

An independent evaluation of 20 pilot sites was conducted by a partnership between research teams at three institutions, led by the personal social services research unit at the University of Kent. The evaluation found that personal health budgets improved people’s quality of life. The findings showed that:

– patients had a significant improvement in their care-related quality of life and psychological wellbeing. Their health ‘status’ stayed the same;

– benefits were more marked where patients had higher levels of need;

– personal health budgets also worked better where people were given more choice and control, both over what they bought and how they received the budget. In contrast, where the pilot site imposed a lot of restrictions, personal health budgets tended to worsen people’s outcomes;

– patients reported positive impacts of their personal health budget, both for themselves and for other family members. They also talked about the change in their relationship with healthcare professionals;

– family carers were more likely to report a better quality of life and perceived health than carers of patients in the control group.

The evaluation also found personal health budgets to be cost-effective, particularly for people who get NHS Continuing Healthcare and those who use mental health services. It showed that:

– where patients had a higher budget, savings were made for the NHS as well as patients’ quality of life improving. This was partly due to patients choosing to meet their health needs in different ways that cost less – such as training their care staff to carry out health tasks like changing dressings;

– some of these new ways meant that patients bought care and support which the NHS doesn’t offer – something CCG may need to be prepared for;

– in-patient costs fell for patients with a personal health budget, suggesting that people receiving patients health budgets had fewer stays in hospital.


The main problem is that there is still uncertainty about how it will work. Mainly, the evaluations do not say who will administer the budgets and who will bear that cost of that. The DH is consulting on paying families to administer the budgets. Otherwise, the burden must fall on CCGs – or potentially even on GP practices.

A report from the Nuffield Trust earlier this month warned there will need to be new infrastructure around budget setting and care planning, but crucially pointed out that this will need to be found within existing budgets.

The Nuffield Trust also pointed out that CCGs may be forced to decommission unpopular services to make personal health budgets work when they are rolled out to all patients with long-term conditions in 2015.

Perhaps the main criticism is the lurking belief that rather than being a cost-effective use of taxpayer´s money, they might just be used to charter NHS funds to buy theatre tickets, frozen meals and complementary therapies, as one evaluation of the pilot schemes found. CCGs will need to help counter this perception.