Can personal budgets work in the NHS?

Personal budgets have worked in social care and can help patients take control of their condition, says GP Dr Richard Morgan. However, King's Fund's Richard Humphries argues they could create a two-tier health service.

Let's start with a look at how well personal budgets have worked in social care. And the answer is quite clear – very well.

Councils have allocated personal budgets to more than 31,000 people in England, to arrange their own care and support. It's now clear people are spending slightly less themselves than their local authority had spent on providing services for them.

Yes, the costs of helping people understand and run their own budgets have to be factored in. But the Department of Health has stated that overall, personal budgets are proving cost-neutral.

So will extending this sort of scheme to healthcare really be that different?

The BMA certainly thinks so and earlier this year criticised the plans, saying that there was a risk patients would spend NHS money on inappropriate or non-evidence-based treatments, such as homeopathy.

And the Pulse letters pages and online forum have echoed these concerns – most easily summarised as the worry that patients just aren't intelligent enough to make decisions about their healthcare.

I'd agree that they aren't – on their own. They can't do it without our help and I think that's maybe what some of us are worried about.

It's going to take time – time, I admit, not many of us can easily afford – to sit down with patients and help them make decisions that work for them. But I think we're underestimating our influence if we believe a COPD patient of ours is going to wilfully blow a large wodge of their personal health budget on homeopathy on the basis of a magazine article.

Personal health budgets are being piloted across a wide range of long-term conditions such as COPD, dementia and diabetes. These are hard-core clinical areas and patients are going to want to make the best choice possible to avoid needless pain, distress and harm.

Until the pilots are evaluated in 2012, we should reserve judgment on what has the potential to be a very exciting way of enabling some patients to take control of how their condition is treated, if not the condition itself. We don't yet know – but surely the potential is there.

As one of the GPs involved in the pilots pointed out in Pulse, the worry that patients will run out of the surgery and buy plasma-screen TVs just isn't happening.

If we pre-judge the issue, we run a very real risk of underestimating our patients and underestimating ourselves.

Dr Richard Morgan is a GP in Bristol and is currently studying for an MPhil in comparative social policy.

There are useful lessons from the social care experience of personal budgets, but applying them to the NHS is a totally different proposition because of the sheer scale of the resources involved.

There are some circumstances in which personal budgets could enhance people's experience of the NHS. Generally though, there's very little evidence about the kinds of patients personal budgets might work best in. There is much more that the pilots also need to cover.

Firstly, they need to address the patient experience and whether holding a budget achieves a better outcome for people.

Secondly, how much does it cost to administer personal budgets? In the current financial climate, whether the administrative cost is reasonable is a critical factor and depends on the scale of the budget-holding project.

The third is the effect on other commissioning decisions and whether there is a risk of personal budgets producing a two-tier service, where people who have one are getting a better deal than those who don't.

We need to be mindful of whether personal budgets help people without adversely affecting the service that everybody else gets.

An example might be that if you gave people a personal budget for continence supplies, and enough individuals received that personal budget, that could undermine the PCT's continence service if people chose to take their custom elsewhere.

There also needs to be more control of the amount of money involved and contingencies and safeguards if people overspend their budget.

Personal budgets could potentially pose a financial risk to the NHS, so we need a very clear and distinctive focus on the circumstances in which they should be introduced.

Richard Humphries is senior fellow in social care at the King's Fund.